In May 2013, the coalition Government amended legislation to allow offices to be converted to residential use without the need to apply for full planning permission. The policy goal was to make it easier to convert redundant, empty and under-used office space into new homes, promoting brownfield regeneration, increasing footfall in town centres and boosting housing supply. This is known as a permitted development rights.
Naturally, this move has been welcomed by developers who have found themselves able to capitalise on empty office blocks in the wake of the recession together with an increased demand for residential property, all without the need to negotiate the hurdles of the planning process. In the first six months since the implementation, notifications for office to residential conversions across the UK increased by more than 500%.
Is there a time limit?
The legislation states that development is not permitted where “the use of the building falling within Class C3 (dwelling houses) of the Schedule of the Use Classes Order was begun after 30 May 2016.”
However, official guidance produced following the reforms advises that different types of time limit apply in different circumstances. Generally, development rights are allowed to be retained permanently provided that that work is completed by 30 May 2016…
…leaving developers in an uncertain position.
The Government has made representations that the scheme will be extended. However, until legislation to this effect comes into force we cannot be certain that this will be the case. These assertions (especially with a general election looming) offer little security to developers and lenders concerned that schemes which remain uncompleted in May 2016 could potentially become subject to planning enforcement action by the Local Authority.
What can developers do to minimise the risk?
Unfortunately, insurers are reluctant to provide cover for the risks outlined above. Their reluctance is partially due to political uncertainty: will the scheme be extended by the Government elected in May 2015?
One option for developers would be to make an application to the Local Authority for a Certificate of Lawfulness (under section 192 of the Town and Country Planning Act 1990) in respect of the proposed use of the site in question.
If the Local Authority is provided with information satisfying it that the use described in the application would be lawful if instituted or begun at the time of the application, then it must issue a certificate to the applicant to that effect.
This option is attractive to developers as conditions cannot be imposed on the grant of a Certificate of Lawfulness and, once granted, a Certificate of Lawfulness is conclusive proof of lawfulness save where in the case of future uses and operations there is a material change of circumstances. The issue of a Certificate of Lawfulness will avoid the risks of enforcement action and/or unsuccessful planning applications should the scheme be discontinued.
This post was edited by Caroline Pierce. For more information, email email@example.com.