Market monopoly – a curious title issue
Any property, whether owned, purchased or funded, will typically have the benefit or burden of one or more rights of various types. A right of way or a right to services are common examples.
However, there are more curious or historical rights still regularly seen in practice, such as chancel repair liability, a liability to contribute to the repairs of parts of a local parish church, as one example. By contrast, an interesting example of a right which is rarely seen in property transactions but can still have significant impact is a market franchise right.
What is a market franchise under royal charter?
This is a right, granted by the Crown by charter, to hold a market, with a geographic monopoly. That is, no one else in the vicinity (within a 6⅔ mile radius) can hold a competing market. In effect, the franchise holder (market owner) can have a competing market in the area shut down.
It might be assumed that this is an antiquated right which would have minimal impact in the modern day. However, the right can be perpetual (although there is a possibility that a market franchise could be removed by the Crown or by statute) and there have been cases, even in the last few decades, where courts have, for example, required car boot sale sites within the monopoly zone to be shut down. At the time of writing, the website of Birmingham City Council, has a page stating: “The council's statutory market rights prevent any person operating a market within 62/3 miles of any council run market without our express permission… We will take legal action to prevent the opening and continued operation of any market which does not have permission.”
For property solicitors, it is important to be aware of the possibility of such rights, and their implications, no matter how rare. While a valid market franchise right might be a benefit to a market owner holding the franchise, it is a burden for land for miles around. In the event of seeking to buy or let a site for use as a market, this right could prevent that use. Unfortunately, there is no definitive method to establish if there is a market franchise affecting a piece of land. The Land Registry maintains a register of franchises and while a solicitor can run a search for a specified administrative area, it is not comprehensive because franchises do not have to be registered. Further specialist due diligence might uncover one, but this is not guaranteed.
This outlines the important of solicitors being made aware of the actual and intended use of a property at the outset of a transaction so they can consider all potential legal issues and checks on behalf of their clients.
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