Utility Access To Commercial Properties

5th July 2013

What are your rights when Utility companies need access to commercial properties?

Utility companies across the UK have the right to enter commercial property to install or maintain their equipment, whether it is water pipes and gas mains or electricity lines and communication cables.

Many people are not aware that this not only has an effect on the value of the property concerned, but may also cause consequential losses for which you should be compensated.

So where do you stand if you are a commercial property owner or occupier? Jonathan Wallis, Partner with George F White explains your rights and offers some professional advice.

The majority of utility apparatus is installed and retained on third party property through either a wayleave or easement.

  • A wayleave is a contract whereby the owner or lessee of a property grants a right to a utility company for the equipment to be installed and retained in consideration of an annual payment.
  • An easement is similar to a wayleave in terms of the rights granted, however it is executed as a Deed and permanently registered against the property in consideration of a one off payment made to the property owner.

Most utility companies operate under an Act of Parliament which gives them statutory powers to acquire a wayleave or easement for the installation, maintenance and retention of apparatus. It is vital to have a good understanding of the underlying legislation regarding what powers utility companies have when they require entry.

Existing apparatus

In terms of existing apparatus, utility companies will, over time, require access to land and property to undertake repairs, renewals or replacements which inevitably results in both disturbance and damages and a resultant financial loss. Such losses could be from damage to property, business interruption and temporary re-location.

If your property is to be affected by such programmes, it is strongly advised that potential issues are addressed before any access is permitted because ultimately there needs to be assurance that you will be fully compensated for any loss incurred. The utility company should fully understand the implications of their proposed programme before work commences in order that both they and you can mitigate losses.

New apparatus

Where a utility company wishes to lay new apparatus, there may be a capital payment due if a new easement is created. This will relate to the diminution in value to the property that the installation of the new apparatus brings. Such claims should not be overlooked, and key matters of consideration should not only be existing use value of the property, but also future development potential of the property as well as any value attached to mineral or access rights.

Also of important consideration is whether it is in the best interests of the property owner to enter into a wayleave or easement where new apparatus is to be installed.

A wayleave would provide a right to terminate the contract, meaning that the utility company would have to remove the apparatus. In the case of an easement, you can also seek a clawback or ‘lift and shift’ clause in the event that planning for alternative use of the affected property is granted.

Finally, don’t forget that the utility company will cover all your expenses including the appointment of an agent and other professionals to act on your behalf. Getting professional advice is important to ensure you are fully compensated and all your concerns are addressed right from the start.

For more details contact Jonathan Wallis on 01388 529577.

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