Legal Indemnity Insurance

One million reasons to consider Section 203

Most of us are keenly aware that where you are dealing with any form of planning application for a radical or highly contentious scheme, there is a higher chance that the application will be met with local opposition, and the decision for committee to approve a scheme can become a political hot potato. Beyond the planning delays that one has to contend with (which can occur due to delayed and deferred decisions as well the appeal process), developers are now faced with having to deal with spiralling costs of rights of light compensation payments, often running into millions of pounds, as well as settlements payable for Restrictive Covenants and Easements.

What happens if you are unable to reach an agreement for financial settlement with your neighbour to acquire their right of light? Looking back to 2018, Chelsea Football Club were faced with this scenario when planning to build a new 60,000 capacity football stadium. Their offer to their neighbour, a residential homeowner, of £1m compensation in exchange for a release of their right to light was rejected. Rather than admit defeat, Chelsea FC pursued an alternative solution by working in tandem with the local authority by using Section 203 of the Housing and Planning Act 2016.

Using S203 enables a local authority to override these ‘rights’ by either transferring the allocation of land from its existing purpose to another (typically planning purposes) or by acquiring land for planning purposes. This is otherwise known as ‘appropriation’.

Typically, these powers are used to lawfully override a third party right benefiting a neighbouring property which may be preventative to development…

With an increasing awareness of property rights in the public domain, comes an increasing financial burden on developers, but this is not just to the detriment of profit; it’s loss of potential future housing stock and the buildings that we need to support growth and evolution of the built environment in our cities in towns, that we so desperately need.

Perhaps S203 is the answer?

It would be wonderful to have a silver bullet in the form of an insurance policy for every circumstance as financial risk is still primarily carried by the developer.

Each project is different and carries varying amounts of risk and financial exposure. Working with clients on projects of varying complexity, we seek to provide an insurance solution to support your commercial legal advice, and manage financial exposure which is important to developers, property funds and lenders.

To find out more please contact Matt Rutter, Senior Underwriter matt.rutter@legal-contingency.co.uk or Amanda Armitage, Business Development Manager amanda.armitage@legal-contingency.co.uk

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