Developers beware - when an easement is not enough

02/11/2009

By Roy Willis, Partner in Commercial Property & Development.

In a recent case a developer bought some land with the benefit of planning permission to build an office block. The developer was granted the right to lay service media over the seller's adjoining land. The seller then sold the adjoining land to a third party.

The developer dug a trench across the adjoining land for the new service media to the office block. The utility supply company, EDF, would only lay the electrical cables in the trench if the owner of the adjoining land entered into a deed of grant with EDF.

The owner of the adjoining land refused. The developer went to court arguing that the adjoining owner was obliged to enter into the deed of grant. The developer was unsuccessful.

No obligation to take positive action

The court held that there was no implied obligation on the adjoining owner to take a positive action to ensure the right was fulfilled. Therefore, it did not have to enter into the deed of grant.

Issues for the developer

Although the adjoining landowner knew his land was subject to the developer's right to lay cables this did not mean he could be compelled to enter into a contractual relationship with a third party on terms satisfactory to that third party. The result was that the developer had to buy a different piece of adjoining land to connect the electricity supply.

Practical advice

So what should the developer have done? In the transfer of land to him, the developer should have placed an obligation on the seller to enter into a deed of grant if required. The seller should also have contracted to ensure that any successor entered into an obligation with the developer on the same terms. This could have been protected by a restriction on the title to the adjoining land.