SHOULD AIRSPACE ABOVE THE BUILDINGS BE INCLUDED IN THE LEASE?

Landlords! Do you think that the airspace above the buildings should be included in a lease?

The answer may be obvious. However, modern building technologies are allowing more creative uses of the airspace above the roofs of buildings. In densely populated urban areas, the right to build on airspace and the right of access to airspace can therefore be very valuable. When advising a landlord who wants to retain the airspace of a building, the exclusion of the airspace from the demise should be spelled out in the lease in the definition of the demised premises.

In a very recent Court case a claimant sought an order from the High Court to register the airspace. The claimant was granted a lease of the airspace above the buildings in 2015. The defendant was the current lessee of a 120-year lease of the buildings which had been granted in 1970. When the claimant tried to register the airspace lease at HM Land Registry, the defendant insisted that the airspace lease should only be registered subject to its 1970 lease on the grounds that the 1970 lease demised the airspace.

The claimant relied on an isolated clause in the 1970 lease which defined the demised premises by reference to the individual internal parts of the buildings (eg ‘ground floor shop ‘and ‘residential flats’) and not by reference to the buildings as a whole, arguing that this therefore excluded the roof and airspace from the demise.

What do you think was the Court’s decision?

The Judge agreed with the defendant that the 1970 lease did include a demise of the airspace for a number of reasons, including the fact that  if the demised premises did include the entirety of the buildings (including the roof) then it followed that they would include so much of the airspace as was required for the ordinary use and enjoyment of the land and buildings.

Baring in mind that there was no market in building on top of existing structures in 1970 this case may be “opening a can of worms”. So,  watch this space... the potential profits involved in being able to develop on top of buildings with old leases will mean that this is not the last such case to come before the courts.

For more information on the case go to [2018] EWHC 64 (Ch)

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