CONSTRUCTION Alert: No access – when a statutory right of user will circumvent a problematic neighbour

2 August 2017

Publications

Introduction

It is commonplace that a development will require some form of access through neighbouring properties during the course of construction. This might take the form of permanent access, such as easements for driveways or underpinning.  It may also take the form of temporary access, such as a licence granting construction access to the site, or the use of, or encroachment into, the airspace of adjoining properties for the operation of a tower crane.

This article, with a focus on the use of tower cranes, examines the current position at law from a developer’s perspective and explores options that developers might take in order to protect their position.

Use of tower cranes

One of the most common reasons that adjoining property access is required is to facilitate the use of a tower crane.  Tower cranes are often an essential element of inner-city development projects where there is limited site access and manoeuvrability.  Tower cranes are erected on site and consist of a long boom angling out from a cabin, which is used to lift and deliver materials from ground level to elevated work positions.  The crane also typically has a counterweight, extending out from the cabin to balance the boom.  Although the tower cranes themselves are usually erected on the development site, it is common for the boom and counterweight to cross over into the airspace of adjoining properties, including when not in use (called ‘weathervaning’, which is required for stability/safety reasons).

The use of tower cranes undoubtedly results in both time and cost savings for developers and contractors.  The legal ramifications of the crane’s boom or counterweight entering the airspace of an adjoining property needs to be considered from the outset and necessary arrangements made with interested parties.

As a starting proposition, landowners are entitled to exclusive use and enjoyment of their land.  Although landowners do not ‘own’ the area above their land, these rights extend to the use of the airspace above the ground so long as it is necessary for the proper enjoyment of their land.  A crane boom or counterweight passing through an adjoining property without the consent of the landowner may amount to a common law trespass.  In the absence of an agreed licence between the developer and the affected landowner, the affected landowner may apply to the Court for an injunction preventing the trespass.

Generally, temporary access arrangements can be organised in an amicable and rational manner, with the developer/contractor providing adjoining property owners with a series of promises regarding safety, insurance and damage rectification and, if appropriate, reasonable compensation for the right of access.  These arrangements typically include a make-good obligation on the part of the developer/contractor and payment of a nominal fee for the grant of access licence by the affected landowner.  Significantly, any compensation from the developer/contractor to an affected landowner is not required to correlate with the commercial benefit achieved by the developer/contractor by the grant of the licence.

In the event that an adjoining property owner refuses to provide the requested access, developers have the ability to make an application to Court to obtain the required access.

Statutory right of user

Section 180 of the Property Law Act 1974 (Qld) provided developers/contractors with an avenue to gain access to adjoining properties by way of a ‘statutory right of user’.  A statutory right of user involves the Court granting a right allowing access to, over, under or through land, including the placement of a utility on, under or through the land.

The Court may grant a developer/contractor the right  to access and use land adjoining its development site in the following circumstances:

  • the proposed use of the development site is reasonably necessary and in the public interest;
  • the owner of the adjoining land can be adequately compensated in money for any loss or disadvantage that they may sustain as a result of the grant of access; and
  • the owner of the adjoining land has unreasonably refused the contractor access to its land.

If the above criteria are satisfied, the Court has the power to grant either an easement (for more permanent arrangements) or a licence for a specified period, providing the developer with the right to access the land.

The leading authority in Queensland regarding cranes oversailing adjoining properties is Lang Parade Pty Ltd v Peluso [2005] QSC 112.  Lang Parade utilised tower cranes to facilitate the construction of two apartment blocks in Auchenflower.  When weathervaning, the crane booms encroached upon the properties adjoining the site, approximately 25 metres above ground.

The adjoining landowners demanded that Lang Parade either cease trespassing in their airspace or pay compensation for the trespass.  Lang Parade made a series of offers of compensation to the landowners, however, each offer was refused.  Lang Parade subsequently made an application pursuant to section 180 of the Property Law Act 1974 (Qld) for a statutory licence to allow the cranes to oversail into the airspace of the adjoining properties, on the grounds that such an encroachment was reasonably necessary for the effective operation of the cranes.

Reasonably necessary

In assessing whether it was ‘reasonably necessary’ for Lang Parade to encroach upon the airspace of adjoining properties, the Court noted that:

  • the proprietary rights of a land owner should not be readily interfered with;
  • ‘reasonably necessary’ does not mean absolute necessity, however, it does mean something more that desirability or preference; and
  • the effect of the licence on the adjoining land must be considered.

In Lang Parade, the Court awarded a statutory licence to Lang Parade to encroach upon the adjoining landowners’ airspace on the grounds that:

  • the cranes could not be positioned on the site in a manner that enables them to avoid encroachments into the airspace of neighbouring properties;
  • other means of constructing the apartment blocks were impracticable or unsuitable;
  • the cranes were not used to carry loads over neighbouring properties;
  • the cranes were well maintained and covered by an appropriate insurance policy;
  • the development was consistent with the public interest because it had been approved by Brisbane City Council; and
  • there had been no submissions made to Brisbane City Council opposing the development application.

Adequate recompense and unreasonable refusal of licence

In considering what amounts to a genuine offer of compensation, the Courts have held that it may be relevant to consider the benefit that the developer receives from the right of access.  Adjoining landowners, however, are not permitted to hold contractors to ransom by making unreasonable requests for compensation.  Ultimately, the question of compensation is discretionary and turns on the facts of, and risks associated with, a particular access arrangement.  In our experience, a genuine offer of compromise for temporary access to an adjoining property can range anywhere from $200 to $25,000 depending upon the nature and extent of the encroachment.

A developer also may wish to make a reasonable offer outside of monetary compensation, such as works that the developer’s contractor might undertake for the landowner’s benefit (for example, landscaping, erecting new fences or constructing new footpaths), in order to compensate an adjoining landowner for the right of access.  What is considered reasonable will differ depending on the circumstances of the access, including risk to people or property, the amount of disruption that will be caused and the length of time during which the access will continue.

In Lang Parade, the developer made a series of offers to the landowners as recompense, initially in the sum of $5,000 and then increased to $16,250, $30,000 and finally to $35,000 plus the landowner’s legal costs.  The landowners refused the developer’s offer and indicated that it required $90,000 in exchange for the grant of the licence.  Subsequently, during the hearing, the landowners suggested that $160,000 might be adequate recompense.

In Land Parade, in light of the Court’s findings on the other elements of section 180 of the PLA, the Court held that the adjoining owners’ refusal to grant a licence to Lang Parade for use of the airspace above their properties was unreasonable and amounted to holding the developer to ‘ransom’.

Documenting negotiations

Before making an application for a statutory right of user, and preferably before relations with a neighbour sour, a developer needs to consider the requirements of section 180 of the Property Law Act 1974 (Qld) and the points set out above.

For example, the Court is not likely to grant a licence to a developer where reasonable attempts have not been made to come to an amicable agreement with the adjoining landowner.  Specifically, the developer needs to make sure that the adjoining landowner’s refusal to allow access through their property has reached the point of being ‘unreasonable’.  To establish unreasonableness, the developer should ensure that the owner is provided, as early as possible, with all of the relevant information regarding the required access.  This might include detailing all steps that will be taken to mitigate any risk to the landowner’s land and property, including compliance with industry standards and holding the appropriate insurances, and that any offers of compensation are genuine in nature.

The Queensland Supreme Court recently refused to grant a right of statutory user in 2040 Logan Road Pty Ltd v Body Corporate for Paddington Mews CTS 39149 [2016] QSC 40.  The Court held that the adjoining landowner was not provided with a sufficient level of detail regarding the proposed access and therefore their refusal to allow access could not be considered unreasonable.  The Court noted that whilst a developer does not need to provide an adjoining land owner with every detail of the proposed access, the necessity of the access, safety issues, any approvals that would be required for the works and how any further glaring issues need to be addressed (in this case, the developer was intending on building car parking spaces, however, had not addressed how it was going to remove a power pole located in the subject area).

As a result, it is important that the developer retains records of all communications with neighbouring landowners, and, from the earliest opportunity, is as open and frank with neighbours in relation to the development and proposed access arrangements as possible.

Access agreements

Developers should be proactive in protecting their position by informing, consulting and negotiating with adjoining landowners early.  If a developer is having problems obtaining consent to access adjoining properties, legal advice should be obtained to ensure that the appropriate steps are taken to facilitate either a negotiated outcome or the grant of a statutory right of user.

Even in circumstances where an adjoining landowner is being cooperative in allowing access to their property, a developer should ensure that an appropriately worded agreement is entered into, so as to avoid any issues arising further down the track.  This may take the form of a simple email setting out key terms, or a more formal deed.

 

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Andrew Kelly has been recognised in the 2017 Expert Guide to Construction and Real Estate in Australia, one of only three Queensland based construction lawyers to be recognised.

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Written by:

Andrew Kelly | Partner | +61 7 3338 7550 | akelly@tglaw.com.au

Tom McKillop | Senior Associate | +61 7 3338 7530 | tmckillop@tglaw.com.au

Chris Woodhouse | Lawyer | +61 7 3338 7908 | cwoodhouse@tglaw.com.au