Securing services for development land

Commonly, when buying land for development purposes, developers (and their solicitors) will make sure that all necessary easements are reserved across their neighbours’ land to access and service the development site. Is that enough to guarantee that a new house or office building will have all of the services it needs to function and that its owners or tenants can get to and from it? In ‘William Old International Limited vs Arya (2009) ‘Judge Pelling QC said not. 

In that case the developers, William Old International, had bought land from their neighbours and constructed a new office building. The transfer of the development site contained an easement which enabled the developers to lay service media across their neighbours’ land for the purposes of connecting services to the new office building. The neighbouring land was sold. William Old’s relationship with their new neighbours was strained but they did agree on the route of new service media which William Old then constructed on the neighbouring land. 

When the time came to connect an electricity supply to the new office building the supplier, EDF, insisted that the neighbours should enter into an easement with EDF to permit them to connect the new office building to the mains electricity supply across the neighbours’ land. The neighbours simply refused to oblige. 

At the High Court, William Old argued that the neighbours were derogating from the original grant of the easement to lay service media by refusing to enter into an easement in favour of EDF. Judge Pelling disagreed; the doctrine of non derogation from the grant of an easement is essentially negative in nature and cannot impose a duty to take any positive action – in this case, grant an easement to EDF.

It is worth mentioning that electricity suppliers are entitled to invoke a statutory procedure contained in the Electricity Act 1989 under which an appropriate way leave can be obtained from the Secretary of State upon payment of suitable compensation to the affected landowner. So an unwilling neighbour need not be an insurmountable obstacle to the supply of services to a new development. Ironically, given how lengthy and expensive litigation can be, in the William Old case, EDF did not pursue its statutory power to secure a way leave because the developers, William Old, were concerned about how long the statutory process would take and did not want to underwrite any compensation which EDF may agree with its neighbours!

Whenever third party cooperation is needed to carry out a development so that the development can be accessed or serviced, it is critical to make sure that all those third parties are legally committed to take the positive steps which are needed. That means remembering to include a positive obligation on the sellers who will be keeping land adjoining a development site to enter into agreements with all relevant authorities and services suppliers and making sure that obligation is secured against future owners of the neighbouring land.

As well as learning how important it is to maintain good relationships with neighbours, William Old International Limited found out the hard way that it is vital to buy development land well and with all necessary third party cooperation secured; without that, unexpected cost or delay is pretty much guaranteed.