Saturday, 27 October 2012

Holiday lets may be a change of use


The judgment of the Court of Appeal in Moore v. SSCLG [2012] EWCA Civ 1202 (delivered on 18 September 2012) might appear at first sight to set alarm bells ringing for the owners of dwellings used as holiday lets, but a reading of the judgment should allay such fears for the majority of holiday lets.

The issue in this case has arisen on several previous occasions, and the relevant judgments were helpfully reviewed by Sullivan LJ in a characteristically clear and soundly reasoned judgment.

The question for the Court was whether a dwelling let out for short-term holiday or leisure use is still a single private dwellinghouse within Use Class C3. On the basis of the applicable judicial authorities, the Court rejected the notion that use as a holiday let can never be regarded as falling within Use Class C3; but the Court was equally clear in rejecting the proposition that use as a holiday let of a property which might normally be described as a dwellinghouse must always fall within Class C3. In other words, each case depends on its own facts - it is “a matter of fact and degree”.

The starting point for the definition of a dwellinghouse in this context is Gravesham BC v. SSE [1984] P&CR 142 (a case in which planning permission had been given for a “weekend and holiday chalet” but which was being used as a dwelling on a permanent basis). It must be a building which ordinarily affords the facilities required for day-to-day existence. If it meets that test, it is a dwellinghouse. However, the case on which the appellant in the instant cased primarily relied was Moore v. SSE [1998] 2 PLR 65 [no relation, and unconnected with the present case]. In that case, the outbuildings of a large country house had been converted into 10 single self-contained units of residential accommodation for the purpose of holiday lettings. Nine of the units were in use by May 1991. In May 1995 the LPA issued an enforcement notice alleging a material change of use from residential to mixed use for residential and as 10 units of holiday accommodation. If the change of use of each of the units was a change of use to a single dwelling, then the enforcement notice was not served within the 4-year time limit prescribed by section 171B(2).

In the section 174 appeal in that case, the inspector had found as a matter of fact and degree that each unit was self-contained and was supplied with the facilities necessary for daily life, including living, sleeping and eating space, kitchen, bathroom and WC. The units were each available for short term lets. However, he concluded that they were not used in the normal sense as independent residential units. Their use for holiday accommodation was, in his opinion, materially different to the use of premises by a household as a long term home. The High Court rejected an appeal against this decision, but the Court of Appeal overturned the Secretary of State’s decision. The Court accepted the approach taken in Gravesham, and held that there is no requirement that before a building can be described as a dwellinghouse it must be occupied as a permanent home.

There had in the meantime been another case (Blackpool BC v. SSE (1980) 40 P&CR 104) which had not been referred to in Moore. A house had been used by the owner as a second home for holidays by himself and his family, by members of his office staff, and by “family groups” who paid rent. There were lettings for a rent for 10 out of 18 weeks in the four-month holiday season; for the remainder of the year the premises were left empty. The LPA had served an enforcement notice alleging change of use from use as a private dwellinghouse to use for holiday lettings on a commercial basis. In the appeal against the enforcement notice, the inspector accepted that there had been no change of use and the enforcement notice was quashed. The LPA appealed against this decision to the Divisional Court, but their appeal was dismissed. The LPA argued that the inspector was wrong in approaching the matter on the basis that “if the house is occupied by one family, the house is residential and therefore in accordance with the permitted use as a dwellinghouse”. However Ackner LJ held that what the inspector had found as fact here was that the character of the user from a planning point of view had not been changed by the fact that the premises were being occupied not only by the owner and his family but also by his friends or by members of his office staff or by paying tenants on short holiday lets. This was a finding of fact that was not open to challenge.

After reviewing these judgments in the present case, Sullivan LJ held that whether the use of a dwellinghouse for commercial letting as holiday accommodation amounts to a material change of use will be a question of fact and degree in each case, and the answer will depend upon the particular characteristics of the use as holiday accommodation. Neither of the two extreme propositions – that use of a dwellinghouse for commercial holiday lettings will always amount to a material change of use, or that use of a dwellinghouse for commercial holiday lettings can never amount to a material change of use - is correct. However, the inspector was entitled to find (as a matter of fact and degree) in this case that the way in which the property was being used fell outside the definition of a C3 use in the Use Classes Order.

What made the instant case unusual was the fact that the dwelling in question was very large (with 8 bedrooms) and could accommodate as many as 20 guests at any one time. Large groups of people (who were not family groups) stayed there, with all the associated comings and goings, vehicular movements and parking, and the noise and general disturbance inevitably associated with such a use. It was undoubtedly this factor that prompted the LPA to take enforcement action, and which led to a finding of fact on the part of the Inspector that a material change of use had taken place.

Whilst no hard and fast rule can be laid down, I think it is reasonably safe to assume that a holiday let comprising accommodation which would sleep, say, up to to 6 to 8 people, and is therefore likely to be occupied by family groups who, during their stay, constitute a single household, will in all probability still fall within Use Class C3, and so there will be no material change of use where the property was previously used as a family home. However, if the property is more in the nature of the property in the Suffolk Coastal (Moore) case, with a larger number of guests staying at any one time, then this may well constitute a material change of use to a sui generis use (a use of its own kind). Where such a change of use has occurred, it will be the 10-year rule (not the 4-year rule) that will apply in relation to any claimed immunity from enforcement.

© MARTIN H GOODALL

7 comments:

Rick said...

And what of a circumstance where a property, previously approved and conditioned for holiday lets whether or not for year round occupation (and not necessarily for a single family use)- is then is used for a continuous single family residential use - is that not a material change in the other direction and thereby subject to the 4 year rule? for use as a single dwelling house as opposed to a breach of condition and normally constrained by the 10 year rule?

Evan Owen - Snowdonia said...

Interesting. But, what class use applies in the case of a barn conversion to four holiday lets where the planning conditions allow 365 days use p.a. albeit with a 28 day limit per person or family group and a 'register' to record occupancy and compliance with said conditions?

This is one planning unit owned by one person or company and run on a commercial basis and as is the case in all such lets they qualify for business rates rather than council tax.

Martin H Goodall LARTPI said...

The answer to Rick’s point is two-fold. First, if permission is given to erect a property specifically for holiday lets, and conditioned to that effect, its first use can only be as a holiday let. (Wilson v. West Sussex CC [1963] 2 Q.B. 764, East Suffolk CC v. Secretary of State for the Environment (1972) 70 L.G.R. 803). However, in 99% of cases it will also meet the criterion of a dwellinghouse within Class C3 (as per Gravesham),and so will be seen as such rather than as a sui generis use. So if the property is subsequently used for a continuous single family residential use, this will not be a material change of use (see section 55(2)(f)).

The second part of the answer is that it would, of course, be a breach of the occupancy condition. But it is the 4-year rule that would apply in this case (see Arun).

Martin H Goodall LARTPI said...

In answer to Evan, if the permission is for four holiday lets, then each of these might possibly be seen as a separate planning unit (as per Burdle). However, I appreciate that this might be open to question. It might be argued, for example, that the four units are not physically and functionally separate from each other, and there is also the question as to who is really in occupation – do the four units constitute a single unit of occupation? But if they do constitute four separate planning units, then although the use is limited by the occupancy condition, I take the view that each of the four units could be a dwellinghouse within Use Class C3 (as per Gravesham) if each of them is self-contained and has all the facilities required for day-to-day existence. On the other hand, if we really are looking at a single planning unit comprising the four units as a single entity, then this is a sui generis use.

Evan Owen - Snowdonia said...

Thanks Martin, sounds logical to me.

Anonymous said...

We have a very large barn conversion, in a concervation area, that had planning permission for a single sustainable residential home.
What we have is an 8 bedroom, sleeps 20 plus, advertised as a hen / stag do party house. Despite local concern, the planning department refuse to acknowledge that it's being run as a business. The owner has many other properties that he runs in the same way. This is obviously not what we as locals residents wanted. This is a quite hamlet, and this place is far to near other residents. We have been told to monitor the activity which is not only difficult but feel it should be the council 'so job to do that. Apparently if on two separate nights we can prove someone says there,just for the night then that would be unacceptable. Which is ridiculous for us to prove.
Surely this place which is in Somerset, should be a full blown business, and the owner should pay business rates, not just council tax.
It's full most days with all sorts of people and ages.
I it's been extended,an indoor pool, games room, play area, removal of garages to put a play area. Clearly not a home, but a hotel!!

Martin H Goodall LARTPI said...

The key to the situation described in the anonymous comment of 14 March would appear to be the Court of Appeal decision in the case I reported in this blog post (Moore v. SSCLG [2012] EWCA Civ 1202). The LPA’s attention should be drawn to this case, and they should be asked to reconsider the facts in light of that judicial authority.