Friday, 14 February 2014

Office to residential - a ministerial warning


NOTE: There have been significant changes to the law since this blog post was published, and so the material printed below (including the appended comments) does not accurately reflect the current position. For completely up-to-date and fully comprehensive coverage of this subject, we would strongly recommend readers to obtain a copy of the author’s new book - “A PRACTICAL GUIDE TO PERMITTED CHANGES OF USE” published by Bath Publishing in October 2015. You can order your copy by clicking on the link on the left-hand sidebar of this page.

Last week, in a written ministerial statement to the Commons on Thursday 6 February, Planning Minister Nick Boles fired a warning shot across the bows of councils seeking to resist or frustrate office to residential conversions as PD under the new rules introduced last May.

A number of points about which there had previously been some uncertainty were clarified. First, it is clear that the government did envisage multiple conversions in large office buildings; Boles mentioned the potential of some buildings to provide more than 100 homes. A number of such schemes have already achieved prior approval.

Boles criticised the disproportionate use of Article 4 Directions by some councils. He made it clear that the Secretary of State, whilst he no longer has to approve Article 4 Directions, is still prepared to use his reserve power to cancel Directions that are not justified, and several such Directions are currently under review in De-CLoG, and may either be cut down in their geographical scope or cancelled altogether. At the time of Boles’ statement, 8 authorities had made directions preventing office to home conversions under the GPDO. Islington and Broxbourne were singled out as authorities that had applied these directions disproportionately.

De-CLoG is also aware that some LPAs are still unclear on the correct intention of the detailed provisions in the GPDO amendment, and do not appear to have correctly applied the intended tests to determine applications for prior approval, or have sought to levy developer contributions where they are not appropriate (on matters unrelated to the prior approval process). To ensure the permitted development rights are utilised fairly across England, De-CLoG intends to update their planning practice guidance to councils to provide greater clarity on these points. Unjustified financial levies should not be applied in an attempt to frustrate the creation of new homes, Boles said.

The government is clearly determined to ensure that the PD rights for office to residential conversion granted last May are not frustrated by a small minority of councils who are trying to undermine these changes. This can be taken as a clear steer to the Planning Inspectorate as to the way in which any unjustified refusal of prior approval should be dealt with on appeal. Clearly any refusal based on criteria other than the three narrowly defined topics listed in the GPDO are liable to be overturned. I drew attention a short time ago to a decision in Camden which cited every conceivable objection under the sun. It seems very unlikely that Camden stands much chance of defending that refusal on appeal, and an award of costs against the council looks almost inevitable.

Boles’ Commons statement serves not only as a warning to LPAs who may have been seeking to prevent or frustrate office to residential conversions, but should encourage developers to take a robust stance in appealing any refusal of prior approval, especially if it cites spurious reasons for refusal. There would seem to be no legal basis on which affordable housing provision or contributions can be demanded, or any other financial contributions from developers under section 106. There may, on the other hand, be a potential liability to pay CIL (although I don’t pretend to be an expert on that topic). So far as I can see, no conditions can lawfully be imposed on a prior approval of such development, bearing in mind that (subject only to the prior approval process) such developments are Permitted Development, so that the only applicable conditions can be those actually imposed by the GPDO itself.

UPDATE: In case any readers have not noticed, power to impose conditions on a prior approval was given by the 2014 amendment to the GPDO, but they must be strictly confined to the limited matters that are the subject of the prior approval application. The scope for imposing conditions is therefore much more limited than it would be in the case of a planning permission.

© MARTIN H GOODALL

21 comments:

Evan Owen - Snowdonia said...

Localism will never work, the correct term is parochialism.

Anonymous said...

More of a question really, Is anyone aware of any appeal cases where such conversions have been assessed against Part 3 Class J of the GPDO which came into force on 30/05/2013?

Murray said...

Hi Martin

Thanks for the great blog.

I'd be interested on your view of how a LA's introduction of Article 4 Directions will effect the PD rights for class J Office to residential. If a local authority has given prior approval for a change of use, then must the change of use be enacted (residents move in) before Article 4 directions come into effect? Or will it be enough that the development to allow the change of use has begun before the Article 4 start date? Thanks Murray

Martin H Goodall LARTPI said...

In answer to Murray’s query of 16/02/14, an Article 4 Direction can only remove those PD rights that have not yet been implemented. Implementation, in the case of operational development, means starting work on site, but in the case of a change of use, implementation of the permission only occurs at the point when the material change of use is actually made; I don’t think that works preparatory to the change of use would count (but I have not had time to check any relevant judicial authorities on this point before writing this).

Bearing in mind what I have just written, I certainly don’t think that making a prior approval application under Part 3, Class J would count as implementation of the deemed planning permission granted by Article 3 of the GPDO. So an Article 4 Direction, if it comes into effect before the change of use authorised by Part 3, Class J can actually be made will prevent that change of use.

An Article 4 Direction can be cancelled either by the council or by the Secretary of State at any time before or after it comes into effect and in respect of any part of the area to which it relates (even just a single property), so there may be scope for securing the removal of any ‘unfair’ Article 4 Directions that are frustrating PD for which the prior approval process has already been initiated.

Martin H Goodall LARTPI said...

After penning my response to Murray’s query of 16/02/14, I did a bit more digging to satisfy my own curiosity on the point. I discovered that there was an appeal decision in 1987 (see [1987] JPL 663) which confirmed my understanding of the position as regards operational development, but this is in contrast to the view originally expressed by the government when the first GDO was published in 1948 (see Ministry of Town & Country Planning Circular 87, which pointed out that an Article 4 Direction can be made after the development has begun, provided it has not been completed). This would prevent further works being carried out as PD, but other powers would have to be used to secure the removal of that part of the development that had already been built.

In practice, this seems a very unlikely scenario, and the 1948 circular has in any event long since been withdrawn, and so is of no more than historical interest now. The 1987 appeal decision appears to be a better guide to more recent thinking, so that it should be possible to complete operational PD once begun, if it was lawful at the time when it was commenced. However, it is not beyond the bounds of possibility that an LPA may sooner or later seek to challenge the position if they are keen to stop a particular example of permitted development when an Article 4 Direction has been made.

Anonymous said...

Could you tell me what the position would be for B1 to C3 in a conservation area where the original building would need to be extended to provide suitably sized accommodation. Rather than submit a prior approval request, we sent in a full planning application, and it is my impression that this is being treated as though the GPDO Section J holds little sway, as the focus seems very much centred on what effect the proposed build would have on the conservation area and a nearby listed building (despite the fact there has been a commercial business operating on the site until recently).

Martin H Goodall LARTPI said...

In answer to the anonymous comment on 04/03/14, the permitted development under Part 3, Class J does not include any alterations that would materially affect the external appearance of the building. Thus a full planning permission will be required where external alterations are proposed. In the circumstances, the fact that an office-to-residential conversion that did not require such external works would have been permitted development under Part 3, Class J is likely to carry very little, if any, weight, and the planning application will fall to be dealt with in accordance with section 70(2) of the 1990 Act and section 38(6) of the 2004 Act, which must necessarily involve consideration of all relevant provisions of the development plan and any other material considerations, including any effect that this devlopment might have on the setting of nearby listed buildings and on the character and appearance of the conservation area generally.

Anonymous said...

Hi,

So when does the 56 days count from? Circular 02/2008 at paragraph 37 describes the date of validation for (some) prior notification applications as the first day from which to count the 56 days. This is different to planning applications, where the date of validation described in paragraph 36 is day zero. The LPA issued the decision on the 57th day, if you take validation as day one. The LPA stated that since the circular did not refer to the specific part that the new Class J is under, then we can't rely on it (but then on the same grounds, why can they rely on validation day beign day zero?). 9 conditions including one on noise. What is the appeal procedure?

Martin H Goodall LARTPI said...

In answer to the anonymous query of 10/03/14, the 56-day period is specified in the GPDO itself in Part 3, section N. It appears to me that the new provisions are entirely self-contained, and that Circular 02/2008 (which was advisory only) has no application in this context.

Subject to the application complying with the requirements of paragraph N.(2) (including payment of the £70 fee, if the application was made after 1 October 2013), paragraph N.(9) provides that the development must not be begun before the receipt by the applicant from the LPA of a written notice that prior approval is not required or a written notice giving their prior approval, or (failing either of those alternatives) the expiry of 56 days following the date on which the application was received by the LPA without the authority notifying the applicant as to whether prior approval is given or refused.

It is a well-settled rule of statutory interpretation that “56 days following [a given date]” means that the day of actual receipt of the application is Day 0, and that Day 1 of the 56 days is the day following the date on which the application (and the fee, if applicable)was received by the LPA. So for the purposes of calculation, you simply add 56 days to Day 0. Arguably, however, the 56 days do not expire until midnight on Day 56, so an actual start cannot actually be made until the morning of Day 57.

Note that any nonsense about ‘validation’ or ‘registration’ of the application is wholly irrelevant to this calculation of time.

As regards appeals, the rules are the same as those applying to planning permissions. A right of appeal against the refusal of prior approval or against any conditions imposed on the prior approval arises under section 78. However, as with planning permissions, a section 78 appeal against a condition would put the whole prior approval potentially in jeopardy in the appeal, and so a better course might be to apply for the removal or relaxation of the condition under section 73, and then to appeal any refusal of that section 73 application under section 78, thereby preserving the prior approval itself. Although Circular 11/95 has now been cancelled, I consider that the principles that it explained continue to be applicable.

Martin H Goodall LARTPI said...

After I had written the reply above, it suddenly occurred to me that an LPA does not in fact have the power to attach conditions to a prior approval. Either the prior approval must be issued (and the conversion is then Permitted Development, subject only to the conditions actually set out in Part 3) or it can be refused. I have heard that a number of LPAs are purporting to attach conditions to these prior approvals, and it seems to me that these may in fact be ultra vires.

Does any reader have a view as to whether an LPA can lawfully impose condition on these prior approvals? If any reader thinks they do have that power, I would be pleased if they would cite the legal authority on which an LPA would rely in purporting to impose such conditions.

Martin H Goodall LARTPI said...

Since I wrote that last comment, the question as to whether an LPA has the power to impose conditions on a prior approval under Part 3 (governed by paragraph N) has been resolved by the addition of a new-sub-paragraph in this part of the GPDO (effective from 6 April 2014):

(11) The local planning authority may grant prior approval unconditionally or subject to conditions reasonably related to the subject matter of the prior approval.

This confirms that an LPA does have power to impose conditions on a prior approval under Part 3, but the scope of such conditions is limited. Any such conditions must be reasonably related to the subject matter of the prior approval, and cannot therefore be more wide-ranging. There would appear, however, to be some scope for dispute on this issue, and it may become necessary to pursue a section 73 application in some cases, and (if necessary) a section 78 appeal against the refusal of any such an application, coupled with an application for costs where appropriate.

Anonymous said...

Martin,

Your comments on 12 March at 14:40 are what I understand to be the consensus view - there is no right to apply conditions to a prior approval.

Clearly the forthcoming GPDO amendments introduce this right.

I have a decision notice issued this month in which the local authority have confirmed prior approval but included conditions. I want to argue these conditions are ultra vires. It will not be possible to begin residential use prior to 6 April.

Assuming the right doesn't exist before 6 April, this raises the important question of whether the change in the GPDO applies retrospectively i.e. where local authorities have applied conditions do these remain ultra vires or will on 6 April such decisions suddenly become lawful.

I imagine many readers will be interested in this, including those whose prior approvals are at appeal on this issue.

Anonymous said...

I have reviewed the primary legislation and the wording in the GPDO SI for class J states “the expiry of 56 days following the date on which the application was received by the local planning authority without the authority notifying the applicant as to whether prior approval is given or refused” is identical to part 6 of the GPDO “the expiry of 28 days following the date on which the application was received by the local planning authority ……”.

Yes, the circular is guidance but I can’t see any reasonable interpretation of identical wording in an SI which results in a different definition of when day 1 is counted from. In all prior notification applications (according to the circular) day 1 is the date of validation.

To support my point, the Local Government Ombudsman in their special report on problems with phone mast applications also agrees with my interpretation “A council argued that, for the purposes of the statutory deadline, day one of the 56 was the day after the application had been received (which would have made its decision within time). It had to accept that this was wrong.”

I have seen interpretation in judgements that say otherwise, which leads to me question why the Local Government Ombudsman and the planning circular would have got it wrong?

Martin H Goodall LARTPI said...

In response to the anonymous comment of 27/3/14 - My colleague Ben Garbett has had quite a lot of experience in dealing with this issue in relation to telecoms development. My understanding is that his view on the start date coincides with mine, but I will double-check with him that my understanding of the position is correct. I have a feeling that he took at least one of these cases to the High Court. I may come back to this issue in a future blog post.

Martin H Goodall LARTPI said...

In response to the anonymous comment of 27/3/14 - I have noted in another post the provision in the latest amendment to the GPDO confirming the right of the LPA to impose conditions when issuing a prior approval. There is, however, an unresolved issue as to the validity of conditions attached to prior approvals issued by LPAs before 6 April 2014. Are these, as some have suggested, ultra vires, or is the provision in the latest amendment order confirming that LPAs have power to impose conditions on prior approvals under Part 3 retrospective in its effect as regards conditions imposed before 6 April 2014? I am rather inclined to doubt this, but the position is not all that clear-cut.

Anonymous said...

It seems to me that establishing when a change of use from B1(a) to C3 has occurred is a an important point that has direct relevance to a number of related issues. For example an LPA recently refused to accept a planning application for an extension to a flat that was in the process of being converted from an office having received Prior Approval some months earlier. The flat now has a postal address and is registered for Council Tax as a residential unit, but I assume that the flat would have to be physically occupied for the COU to have been implemented? Further, as the COU seems unrelated to any operational development, do you agree that providing the premises are occupied as a flat (even in an unfinished state and perhaps only for a short period) that the COU will have occurred?

My other point relates to Article 4 directions. If a developer has spent substantial sums of money (perhaps millions of pounds) in converting a premises to C3 under a Prior Approval granted by the LPA and the same LPA brings an Article 4 direction into force before the premises can be occupied (and therefore before the COU has been implemented) would the LPA in your opinion run the risk of incurring a financial liability for the developer's loss under the compensation rules related to Article 4?

Martin H Goodall LARTPI said...

My answer to the anonymous comment of 19/04/14 is that the recited facts are too complex to admit of an off-the-cuff answer. It will very much depend on a detailed analysis of the facts as to which way the dice falls. The same would apply in respect of any compensation that might arise as a result of an Article 4 Direction.

Carol Grant said...

Do these changes relate in any way to live/work units where ( for example) the 'work' part can then become part of the 'live' part?

Martin H Goodall LARTPI said...

A ‘live-work’ unit is a sui generis use (a use of its own kind). Any use that falls into more than one use class (in this case B1 and C3) is a mixed use and therefore sui generis. Where the live-work unit is still being used for its authorised purpose, it follows that the change of use permitted by Part 3 cannot be made in reliance on this provision.

In practice, the condition requiring the use of the planning unit solely for this mixed use is often overlooked, and it would appear (on the basis of the Arun judgment) that the 4-year rule would apply to such a breach condition if it results in the creation of a single private dwelling, after the elimination of the ‘work’ element from the use. If this change of use has indeed become lawful by reason of four years’ continuous and uninterrupted use for solely residential purposes, then it will no longer be necessary to rely on the GPDO to bring about this change.

Anonymous said...

Dear Mr Goodall, Great Blog thank you.!
Is it possible you could provide some direction where I could find some online information regarding the "Arun judgment". Many thanks in advance

Martin H Goodall LARTPI said...

I am not sure what relevance (if any) Arun has in the context of this permitted development, nor am I clear as to which “Arun judgment” my anonymous correspondent was referring (there’s more than one). If the reference is to the case which established that a breach of condition that results in the creation of a single private dwelling is subject to the 4-year rule (rather than the 10-year rule) then the reference is Arun DC v FSS [2007] 1 WLR 523 – a decision of the Court of Appeal.