Where a property’s boundaries do not directly abut a public road, issues can arise concerning access to the property. In such circumstances, a right of way (legally defined as an easement) over the road or land connecting the property to the road is necessary to ensure that the property is legally accessible.
Problems arise where, despite a Landlord granting express rights of access and egress to a Tenant in a Lease, no legal rights of access to the Landlord’s freehold property exist. This can result in the Tenant’s access to the property being barred.
This article highlights potential solutions which can be utilised by companies, or individuals, when taking a Lease of a property where no legal rights of access to the freehold property exist.
Creation of an Easement
The most effective solution to the absence of a legal right of access is to request that the Landlord obtain one. An easement can be created by:
- Express grant by a deed of easement. Typically this will involve the payment of a premium to the owner of the servient land (the land over which the easement is being granted).
- Implied grant where the owner of the servient land disposes of part of the land.
- Prescription (continual exercise of a right over a period of 20 years or more exercised openly, continually and without hindrance, licence, payment or permission of any kind). A statutory declaration by the person who has exercised the right of way for the 20 year period is sufficient evidence, provided no evidence is produced by the owner of the land to the contrary, that the easement has been acquired. The statutory declaration can be sent with an application to the Land Registry in order to register a notice on the title to the affected land. That notice will then protect the easement and allow it to be exercised in future.
- Under an exchange of land (for example on a compulsory purchase order).
Protective Clauses within a Lease
If a potential Tenant decides to proceed to acquire a Lease where the freehold property does not benefit of the right of way to enable sufficient access to the property, and the Landlord has refused to take the requisite steps to obtain an easement, it is sensible to ensure that protective provisions are negotiated into the Lease.
A well drafted break clause can provide the Tenant with the option to terminate the lease upon experiencing difficulties exercising the right of way to access the property. This grants the Tenant the flexibility to elect to terminate the Lease in circumstances where barred access to the property is adversely affecting their occupation of the property.
In addition to this break right, a rent suspension clause within a Lease can provide that the rent for the lease to be suspended during any period where access to the property is barred.
A lack of easements indemnity insurance policy can be obtained to protect a Tenant from any financial loss arising from lack of access to the property.
Obtaining indemnity insurance may involve an initial financial outlay of the premium cost by the Tenant if the Landlord refuses to cover the cost of obtaining a suitable indemnity insurance policy. However, indemnity insurance can be an expeditious method of resolving legal access concerns where time is of the essence in a transaction.
If you are granting or acquiring a Lease and need assistance, or if you have any questions about the contents of this article, please contact our Commercial Property Team on 01603 610911.
Note: The content of this article is for general information only and does not constitute legal advice. Specific legal advice should be taken in any particular circumstance.