Completing PD within the 3-year time limit (Class O)

One of the problems associated with the residential conversion of offices has always been how to determine whether the time limit for completion of the permitted development has been met where the development comprises the creation of a number of dwelling units in the building.

Under Class J in the 1995 Order (and also under Class O in the 2015 Order, as originally made), development was not permitted if “the use of the building falling within Class C3 (dwellinghouses)” was begun after 30th May 2016. That provision [paragraph O.1(c)] was repealed in 2016, and was replaced by a condition [set out in paragraph O.2(2)] requiring that development under Class O must be completed within a period of 3 years starting with the prior approval date. The question is – What does “completed” mean in this context?

This is a question that I discussed at some length in the Third Edition of A Practical Guide to Permitted Changes of Use. The change in the time limit was foreshadowed in the First Edition, but when the Second Edition was published (in October 2016), the precise effect of the change remained unclear, except to the extent that the original May 2016 deadline no longer applied at all, even where prior approval had been granted under Class J in the 1995 Order, or before 6 April 2016 under Class O. I discussed the issue of “completion” in paragraph 7.5 of Chapter 7 in the Second Edition, but without reaching any firm conclusion, other than to refer back to paragraph 1.3.2. of Chapter 1, where I discussed the judgments in both Impey v SSE (1984) 47 P. & C. R. 157 and in Welwyn Hatfield BC v SSCLG [2011] UKSC 15.

The question of “completion” under Class O then arose in a planning appeal in the London Borough of Bromley, which was determined in January 2019 [3200876]. (The decision letter was re-issued, subject to a correction notice, in March 2019). That decision was subsequently quashed in the High Court by consent, but I felt that the Inspector’s reasoning in his decision letter had nevertheless been a brave attempt to get to grips with the question of “completion”, notwithstanding that the question would now have to be reconsidered in a redetermined appeal. It was on this basis that I summarised that appeal decision in paragraph 7.5 of the Third Edition of my book.

The decision letter in the redetermined appeal has now been issued (on 14 April). This appeal was made under section 195, against the refusal by the LPA of an LDC application, which had sought to establish the lawfulness of an existing use (at the date of the application) as eight flats (Class C3) pursuant to a grant of prior approval under Class O.

The Inspector recorded that the previous appeal decision had been quashed on the basis that the Inspector had had regard to the judgment in the case of Gravesham as to the definition of a dwellinghouse, that is - ‘does the building in question (or part thereof) meet the definition of a dwellinghouse, i.e. does it have the distinctive characteristic of the ability to afford to those who used it the facilities required for day to day domestic existence?’. He should, however, have had regard to the test in Welwyn/Impey as to when a material change of use can have occurred in the process of conversion to a residential use, as well as considering what that residential use was, and he did not directly do so. The answer he would have come to might have been the same if he did, but in failing to consider the test in Welwyn/Impey and preferring to apply the Gravesham test he may have fallen into error on the correct lawful test to apply.

This matter had a long and somewhat unfortunate history. A dispute with the LPA as to the lawfulness of the proposed development, which gave rise to an earlier LDC application and appeal, decided in the appellants’ favour, caused inevitable delay in the conversion works being pursued (though not, it should be noted, through any fault on the part of the appellants). In the meantime, being aware of the time limits that might apply, the appellants re-started the works in April 2016 in order to try to establish that the change of use had begun by 30 May 2016 as was required at that time by paragraph O.1(c). By 28 May 2016, Flat 1 had been completed and occupied. Drainage trenches had also been dug, and gas, water, electricity, telephone, aerial and satellite feeds had been brought through the building to serve the other seven flats.

By 9 December 2016, Flats 2, 3, 5 and 6 were at a stage such that all services were complete including gas, electrical, water, telephone, satellite, and central heating. Floor finishes were complete, kitchen fixtures had been installed and the flats had been painted and decorated. However, bathroom fixtures had not been installed. Flat 4 had plastered walls with insulation, drainage and all services supplies had been installed, and second fix electrical work completed. There were no kitchen or bathroom fixtures. Flats 7 and 8 were at earlier stage, with drainage installed, walls plastered and insulated, and all service supplies in place, but again there were no kitchen or bathroom fixtures. No entrance doors had been fitted, and common parts were unfinished.

The key to the approach that the Inspector took in redetermining this appeal is to be found in the judgment in Impey, in which Donaldson LJ had observed that “a change of use to residential development can take place before premises are used in the ordinary and accepted sense of the word. The question arises as to how much earlier (than actual use) there can be a change of use, it may be that the test is whether they are usable, but it is a question of fact and degree”. Donaldson LJ proposed that the physical state of the premises is very important, but not decisive, that their actual use, or intended use, or attempted use are important but not decisive, and that these matters have to be looked at in the round. This is a broader view of Impey than I had adopted in my comments on that case in my book and, on reflection, I accept the logic of the Inspector’s approach to that judgment. The Inspector also drew attention to the comment of Lord Mance in Welwyn Hatfield (which I have previously quoted), which supports that approach.

As a matter of fact and degree, the Inspector found that at the end of May 2016 (the original deadline, which had been extended by paragraph O.2(2) to a date falling in December of that year) Flat 1 had been completed and occupied, but the remainder of the building was still a shell. This could not be regarded as completion of the development, when seven of the proposed flats were little more than the building shell. However, nothing turns on this point, in view of the extension of the deadline to December of that year.

By 9 December 2016, in addition to Flat 1 being complete, the partitions, finishes, fixtures and service installations for the other seven flats were all at an advanced stage, with room layouts and circulation areas defined, and the new staircase at the northern end of the building completed. The Inspector appreciated that bathroom fixtures had not been installed in Nos. 2, 3, 4, 5, 6, 7 and 8, and that there were no kitchen fixtures in Flats 7 & 8. However, the works completed were very much integral to, and part and parcel of the alterations necessary for the change of use to eight flats. Any use, or even potential use as offices had clearly ceased by then. In the Inspector’s opinion, the layout, services, fixtures and finishes – even though incomplete - were at such an advanced stage that the conversion to eight flats was readily apparent, and the possibility of reversion to office use essentially impractical.

Looking at the physical state of the building in December 2016, the Inspector accepted that seven of the flats did not offer all the facilities required for day-to-day domestic existence and were not properly habitable. Nevertheless, they had reached a stage where they were recognisably flats rather than offices. The extent and advanced state of the works, and the substantial financial investment made at considerable risk demonstrated the appellants’ clear intention to bring the building into such use. At this point, it appeared to the Inspector as a matter of fact and degree that use of the building had irreversibly changed from office use to use as eight flats, each one a dwellinghouse. He considered, therefore, that on the balance of probabilities the change of use to eight Use Class C3 flats had occurred by 9 December 2016, and that the development was therefore lawful at the date of the LDC application (5 May 2017).

One of the factors which seems to have influenced the Inspector’s approach to the redetermination of this appeal was the unfortunate history of this matter. In my view, it was perfectly proper that the Inspector should take this factor into account. In the ordinary course of things, the grant of prior approval on 10 December 2013 would have allowed reasonably ample time for the appellants to carry out conversion works and effect the change of use by 30 May 2016. In the event, as a result of the uncertainty introduced by the Council’s doubts over the B1(a) use of the building, their failure to determine the appellant’s first LDC application, and the time necessarily taken in the resulting appeal, the conversion works were put in abeyance from October 2014 to April 2016. The appellants had made a serious and determined attempt to achieve completion in the context of a significantly reduced timeframe, and the uncertainty introduced [by the LPA] by doubts over the original B1(a) use. The Inspector stressed that the weight he gave to the appellants’ clear intentions and serious attempts to carry out the conversion played a significant part in coming to his conclusion.

This appears to me to be a just and fair result, in that the delays in the completion of the development were solely due to the conduct of the LPA, and it would ill become an authority to exploit the literal provisions of the legislation to defeat the legitimate objectives of that legislation to facilitate the provision of additional housing by the conversion of office buildings and other premises. This appeal decision demonstrates that a broader interpretation of the judicial authorities, in particular Impey, is possible, whereas a narrowly legalistic approach to the interpretation (of which I confess I have myself been guilty in the past) is not appropriate in determining the question of “completion” under paragraph O.2(2). This requires a broader more purposive approach if the objectives of the legislation are to be fully and fairly realised.

[My colleague Ben Garbett has had the conduct of this case throughout its five-year history, including all three public inquiries and the quashing order obtained in the High Court. This exemplifies the substantial cases that Keystone Law’s planning law team has brought to a successful conclusion on behalf of our clients. Ben has written a commentary on the case in our ‘Keynotes’ series on Keystone Law’s website. The link is here:

https://www.keystonelaw.com/keynotes/hill-v-london-borough-of-bromley-round-3-when-is-permitted-development-completed ]

© MARTIN H GOODALL