Real Estate Blog: Public rights hiding in open spaces…

The recent Supreme Court decision in R (on the application of Day) v Shropshire Council has highlighted a problem for developers acquiring open spaces.

In this case, the Supreme Court ruled that a buyer who had acquired land for development from Shrewsbury Town Council had acquired it subject to statutory trusts imposed by the Open Spaces Act 1906. The Council had failed to adhere to the disposal procedure relating to open spaces in the Local Government Act 1972, however neither the seller local authority nor the buyer had even been aware that the land had ever been an open space.

In this case, a statutory predecessor body to the Council acquired the land in circa 1925 as a recreation ground for local residents. The land was therefore required to be held subject to statutory trusts under the 1906 Act “…with a view to, the enjoyment thereof by the public as an open space…and for no other purpose…”. The land was then used for various purposes throughout the years, including for an allotment and as a tree nursery. The Council then obtained planning permission for residential development and sold the land to a developer. As the Council were unaware of the statutory trust, it neglected to comply with the necessary procedural requirements under the 1972 Act and the giving of notice to the public in local newspapers. The developer was not told of the status of the land by the Council and did not uncover it from its own investigations and due diligence.

A local resident who opposed the development investigated the history of the land and discovered that the land had been an open space. He sought a judicial review of the planning decision on the basis that a material consideration had been ignored, being that the land remained subject to the statutory trust. The Supreme Court agreed and the planning permission for residential development was quashed, leaving use of the land now in the ownership of the developer limited to an open space. The 1972 Act provides that disposals of land are not invalid as a result of a failure to follow the necessary procedural requirements, but those same provisions do not operate to extinguish the rights enjoyed by the public under the statutory trusts.

So what do developers need to look out for when considering the acquisition of open space for development?

The first consideration is, what is an open space? The 1906 Act defines this as: “any land, whether inclosed or not, on which there are no buildings or of which not more than one-twentieth part is covered with buildings, and the whole or the remainder of which is laid out as a garden or is used for purposes of recreation, or lies waste and unoccupied.” Where an open space has been acquired by a local authority at any time in the past for public recreation purposes, it holds the land on the statutory trusts imposed under the 1906 Act.

Local authority sellers must take steps to establish the status of land being sold and consider how it was originally acquired and how it has been held. If land being acquired by a developer is or might be open space then those developer buyers should make detailed enquiries as to the status of the land and investigate its history, possibly by obtaining historic map reports from search providers.

Where a developer is acquiring open space land from a local authority, it is important to be satisfied that the local authority complies with the necessary procedural requirements for the disposal of that land. Or, where the open space land in question is now in private ownership, it is critical to be satisfied that the local authority complied with the necessary procedural requirements at the time it disposed of the land, whenever that may have been, otherwise the land will remain subject to the statutory trust, despite it not currently being owned or disposed of by a local authority.

Where a local authority has complied with the required procedure, the land will be freed from the statutory trust, and a developer will be free to develop as it wishes, subject to obtaining planning permission of course.

Please speak to Andrew Rathi, in our Housebuilding & Strategic Land team if you would like to discuss anything covered in this blog.