Coastal real estate: key issues around marine licensing and harbour limits

Many lawyers have clients who own, occupy, develop or wish to purchase properties or land around the coast of Britain.

However, there is a whole range of additional legal considerations that apply to such properties and land, which most lawyers are not familiar with.

Here, we focus on two key areas: marine licensing (which is effectively planning permission in tidal waters but required for a much greater range of activities including maintenance); and land within statutory harbour authority limits.

MARINE LICENSING

Under the Marine and Coastal Access Act 2009 (MCAA), the Marine Management Organisation (MMO) is responsible for marine planning and licensing in the English inshore and offshore areas; and for marine licensing in Welsh and Northern Ireland offshore areas.

Natural Resources Wales (NRW) has similar responsibilities in relation to the Welsh inshore areas.

In Scotland, the Marine Scotland Act 2010 imposes a very similar regime and the key regulator is Marine Scotland.

A marine licence is required for licensable activities taking place up to the mean spring high tide water mark.

This includes tidal estuaries, rivers and channels; in river basins this can cover a substantial area.  

A marine licence is required for a wide range of activities, including the construction, alteration or improvement of any works in or over the sea, or under the seabed, and the deposit or removal of any substance or object from the seabed.

Therefore, it is not just new construction which requires a marine licence.

Maintenance of existing infrastructure can also require a marine licence.

A wide range of activities may be considered an ‘alteration’ or ‘improvement’, even though the person carrying out the activity may not consider it such.

Types of activities which would not usually require planning permission but could require a marine licence (unless an exemption applies) include:

• Repairs to walls, banks and slipways
• Excavating any area below mean high water springs (including to maintain or replace pipes and cables)
• Recoating and replacement of piles or other structures
• Building, pipe and cable maintenance
• Erection of scaffolding
• Beach re-profiling

Carrying out licensable activities without a marine licence or in breach of licence conditions can result in an unlimited fine or up to two years in prison (for the most serious offences).

The regulatory bodies do take enforcement action against even relatively minor infringements of the regime.

As terrestrial planning permission is required down to the mean spring low tide water mark, many coastal development projects will require consents under both regimes.

POTENTIAL PITFALLS

There are a number of potential pitfalls associated with marine licensing which should be considered at the outset of a development project. These include:

Lack of timescales – Unlike terrestrial planning applications, there are no statutory timescales governing the decision-making process for marine licence applications – only non-binding guidance with no sanctions for non-compliance.

The only method of appeal is judicial review. Therefore, applicants need to be aware that it can take longer to obtain a marine licence than terrestrial planning permission, and should engage with the relevant regulator as early as possible.

Focus on methods of construction – A key focus of marine licence is construction methodology.

This is in addition to the usual terrestrial planning requirement for a Construction and Environment Management Plan.

This focus can catch applicants out because when contractors are appointed, the construction methodology may need to be changed.

This can result in the need to make a licence variation application or, in extreme cases, a new licence application.

Variation, revocation and suspension – a marine licence can be revoked, varied or suspended by notice from the relevant regulator at any time and for a range of reasons, including navigational safety; change in circumstances relating to the environment; and the catch-all for any other reason that appears to the authority to be relevant.

This can occur long after the judicial review period has passed.

Furthermore, if the licence holder fails without reasonable cause to pay a fee charged by the MMO for monitoring an activity authorised by a licence within 28 days of a demand being made, the MMO may by notice, vary, suspend or revoke the licence.

The potential impacts are obvious: delays, increased costs, or ultimately a project that cannot proceed.

It is an offence to carry out a licensable activity otherwise than in accordance with a marine licence; and where a licence is suspended or revoked, continuation of the activities authorised under it constitutes an offence.

Construction and other contracts – Construction and other associated contracts are usually entered into with risk allocated on the basis of the marine licence as granted (if the marine licence is considered at all).

As such, it is important to include appropriate provisions in construction and other contracts to deal with the risk of a marine licence being varied, suspended or revoked in such a way as to make the continued construction or operation of the development unviable or significantly altered.

Marine licences associated with new offshore technologies are probably most risky due to the lack of detailed information regarding their environmental impacts, which may only become better understood once they are in operation.

LAND WITHIN STATUTORY HARBOUR AUTHORITY LIMITS

The majority of operational ports and harbours in Britain are run by statutory harbour authorities (SHAs).

SHAs originally obtained their powers under statute and so must exercise their statutory harbour powers in accordance with their governing legislation.

In addition, there are a surprisingly large number of piers and small harbours and bays around Britain that remain statutory harbour authorities, despite the fact that over time they have become non-operational; and may only now be home to a small number of leisure vessels.

It is these areas of land that are often considered prime residential development sites.

Nevertheless, purchasing such land for development purposes – only to find out later that the land is bound by the requirements of ancient local legislation – can have very serious implications.

There is no guarantee that development will be able to proceed without a harbour revision or harbour closure order being granted (a statutory instrument), and it is by no means certain that any such application would be successful.

Despite the potential seriousness, it is perfectly possible that the sellers of such land will not be aware that a statutory harbour authority even exists, so careful due diligence is required.

Even where land is being purchased within known ‘harbour limits’ (which can include dry real estate as well as land covered by water) of statutory harbour authorities, additional considerations apply.

For example, nearly all ports and harbours in Britain are bound by the Open Port Duty (the duty to keep the port or harbour open for the shipping and unshipping of goods and passengers).

Port and harbour land, particularly land on quays or quay edges, may continue to be bound by this duty after disposal –preventing its use for other purposes.

Also, it is by no means certain that a statutory harbour authority has the requisite statutory powers to dispose of harbour land, therefore, a careful review of the relevant local legislation is required.

For instance, some harbour authorities only have powers to lease (for a restricted number of years) rather than to dispose of the freehold of land.

There may also be a requirement to only dispose of land no longer required for harbour purposes.

This requirement can be difficult to meet if the disposal includes areas of quay or other operational land.

In carrying out investigations, it is important to remember that the harbour limits of some statutory harbour authorities can include hundreds of acres of ‘dry’ real estate, therefore, it is not only land immediately adjacent to tidal waters that can be affected.

A SNAPSHOT

These issues in relation to both marine licensing and harbour land are a snapshot of some of the additional considerations that apply when advising clients in respect of coastal real estate.

Failure to fully understand these matters and the interaction of the different regimes (ie marine licensing, terrestrial planning, funding, contractual, harbour orders, and so on), can lead to the wrong strategy being pursued or wrong advice given – and projects being severely delayed or halted.  

Care must be taken at the outset of an instruction.

Lara Moore is a Legal Director at Ashfords ashfords.co.uk