Bulletins | August 23, 2016

What the Foxton tycoon vs French ambassador case teaches us about ‘iceberg’ basements

Jay Das and Joanna Brooke on how the interplay between the law, landlords and local authority can unfold in a ‘very public way’ in HNWs battle for basements.

This article was first published in Spear’s Magazine on 22 August 2016.

The Royal Borough of Kensington and Chelsea (RBKC) finds itself time and again in the press, and in and out of courts with the continuing fall outs between those of its residents who are seeking to make the most of their property interest, against those seeking to preserve the status quo.  The proposals for ‘mega’ basements and ‘iceberg’ basements continue to occupy councillors, neighbours, town planners, lawyers and the judiciary.

Part of the reason why these developments have become so very popular (other than the financial benefits associated with such schemes) is that where works are proposed to a listed building, any significant change above ground level often faces opposition. Conservators argue that planning permissions should not be granted as the nature of the listed building would be adversely impacted.

Developments below ground mean that any objections to the planning application arising from any adverse visual impacts is more difficult to sustain, as very little can be seen of the changes once works are completed.

As land value has increased exponentially in some parts of London (RBKC being one of those that has have seen the biggest increases in land value), basement developments which may have been too expensive in the past have become more affordable and the schemes have become bigger and better.

However as more of such schemes come to fruition, neighbouring residents have become more concerned about the noise, vibration, disturbance and  possible damage to their own buildings and have begun to exercise their democratic rights of lobbying their local councils and councillors to secure more protectionist policies for them.

The billionaire founder of Foxtons, Jon Hunt, finds himself having benefited from the law as it stood before RBKC introduced more restrictive policies. The basic facts of his case are as follows:

  • In 2008, RBKC granted permission for a five-storey basement extension (which Hunt maintains was implemented, such that the council cannot stop him completing those works and certificates confirming the same were issued by RBKC);
  • In 2016 RBKC refused a more modest scheme for three subterranean levels (following much lobbying and a change in RBKC planning policy which now restricts basement extensions to one storey below ground);
  • The French ambassador, who resides next door is challenging the certificates issued confirming the implementation of the 2008 permission to prevent the original scheme from being developed out.

The French ambassador took the matter to the High Court to argue that Hunt had not properly implemented the 2008 permissions. His arguments were on the grounds that the planning permission had not actually been implemented within the three years allowed and that any works to the building undertaken within that period had been done for purposes other than implementing the planning permission. The challenge was unsuccessful in the High Court but the ambassador has been granted permission to appeal to the Court of Appeal which is due to be heard in 2017.

The Court of Appeal will certainly provide interesting insight into the laws and practicalities of implementing planning permissions. If the challenge succeeds, Hunt will have to consider a much reduced scheme in keeping with the council’s current policies.

The interplay between the law, regulations, local authority policy and local authority decision-making against the realities – both commercial and practical – of delivering schemes after grant of planning permission, plays out in a very public way. It is often the case that delays in the grant of permission or delays caused by challenges in courts can effectively defeat schemes as investors lose interest, or when financing eventually fails.

One may assume that such hold-ups provide the objectors time to lobby the owners of the land, Crown Estates, to persuade them to refuse the landlord’s consent for the works. The legalities of properly implementing planning permissions is a matter of critical importance, and the value of good legal advice at an early stage will now be self-evident to those fighting these contentious developments.