Commerical property: new year, new challenge

The coming year will see a number of changes and decisions that will be of great interest and importance to developers seeking to take advantage of the improved levels of confidence and activity being seen in the market.

Community infrastructure levy reforms

The Community Infrastructure Levy (CIL) was brought in by the Planning Act 2008 as a charge on developments primarily based on floor space, with all funds to be spent on local infrastructure.

The Department for Communities and Local Government has now published its response to a consultation on further reforming CIL and amendments to the regulations are proposed for the end of January 2014.

A significant change will prevent developers from being charged twice if they submit a revised full planning application after work has started for changes to the development; they will only be charged for any uplift in floorspace.

Currently, developers only have to pay CIL on the uplift if the changes during construction to the scheme can be made pursuant to a section 73 application. If they are substantial enough changes
that a new permission is required, then they are currently charged twice.

The government also plans to extend the vacancy test, so that existing floorspace can be deducted from new floorspace for buildings that have been in use for a continuous period of six months in the last three years prior to the grant of planning permission. Currently, the six-month period of use must be within a 12-month period prior to the date of grant, which is a more demanding threshold to meet.

Pre-application consultation requirements

Another significant change in
the law took place on 17 December 2013 when section 122 of the Localism Act 2011 came into force. The legislation requires developers to consult with local communities before submitting applications for certain developments.

The type of developments affected will be determined by secondary legislation, but the government has stated that it will apply to major developments, such as those of more than 200 units or those that add upwards of 10,000-square metres of new floor space.

While many such schemes already carry out some pre-application consultation, the issues around effective consultation will no doubt
arise. Is an exhibition in a
church hall fit for purpose or does there need to be social media consultation?

The requirement is to “publicise the proposed application in such manner as the person reasonably considers is likely to bring the proposed application to the attention of a majority of the persons who live at, or otherwise occupy, premises in the vicinity of the land”. Will there be challenges as to whether the form of consultation satisfied this?

Sustainable urban drainage systems

April 2014 is the deadline for implementation of schedule 3 of the Flood and Water Management Act 2010. After this, any construction works with drainage implications will require approval before building works can begin.

Unfortunately, industry challenges to the proposals when the scheme was announced in 2012, and subsequent debate between government, local authorities and developers, has meant that Defra has missed its target date for providing guidance to accompany the scheme.

As a result, in April developers are likely to be under-informed and local authorities could well be under-prepared and inadequately resourced to perform adequately the role of approval body.

Judicial review on permitted development rights: office to residential

As part of a government initiative to assist regeneration and get empty and under-used buildings back into productive use, the General Permitted Development Order 1995 was amended with effect from 30 May 2013 to allow offices to be converted into residential use without the need to obtain planning permission. The rule applies to buildings in B1 office use prior to 30 May 2013 and will be in force for a three-year period expiring on 30 May 2016.

In December, the London boroughs of Islington, Richmond, Camden and Lambeth, concerned about potential abuse of the new rules and potential job losses, judicially reviewed the government’s procedure in deciding which areas to exempt. The councils were not seeking to challenge the actual legislation which brought in the new permitted development rights, instead they were simply seeking a re-consultation of the areas they sought for exclusion.

However, on 20 December, Judge Mr Justice Collins dismissed the judicial review claim and concluded that the government’s actions were
not unlawful. SJ