News
9 June 2009
Planning permission about to expire - what are your options?
Hayley Kennedy, commercial property specialist, explores whether there are alternatives to implementing a permission that triggers planning conditions or to let the permission expire and submit a fresh application in better times.
The booming property market saw numerous developers securing conditional planning contracts which then obliged them to purchase land once satisfactory planning permission had been granted. With the catastrophic descent of the property market, many developers were subsequently forced to purchase land they no longer wished to develop.
Speculative development is in decline and as a result the level of planning applications for development has materially decreased across the UK.
One may think that developers holding land with planning permission just need to wait for the turnaround and commence their development. However, the implementation period for planning permission is now only 3 years before expiration, since a reduction from 5 years was introduced in the booming property market to encourage a quicker development process and to prevent land banking.
If you are the proud owner of a rapidly expiring planning permission, what are your options? Do you implement the permission and inevitably trigger the planning conditions or do you let the permission expire and submit a fresh application for permission in better times? Are there any alternatives?
Submitting a fresh planning application, aside from the inevitable fee, means that there would have to be a renegotiation of planning conditions based on the local planning authority’s potentially revised wish list and most importantly the permission could be refused second time around. Whilst implementing the permission and meeting the planning conditions would incur significant cost in the wrong climate.
However, all is not lost, according to partner Hayley Kennedy. In particular, the legal threshold for work classified as a “material operation” (that required for implementation) can be lower than the works that trigger covenants under a Section 106 obligation. This would mean the planning permission had been implemented, whilst not necessarily incurring the costs of complying with the planning obligations. One has to be careful however, as the permission could impose the satisfaction of pre-conditions prior to implementation being the usual “no development shall take place until...”.
It is also worth reviewing your planning conditions to see whether implementation can occur without triggering any of the conditions. If this is not possible there is still scope to argue that a planning consent has been implemented even if in technical breach of such condition.
The Department of Communities and Local Government recently hinted that the implementation period of 3 years may soon be scrapped and the 5 year implementation period reinstated.
Additionally, local authorities do have discretion to grant permission with longer periods for commencement. This does need to be utilised to allow the potential for a delayed start which is responsive to market conditions. Local planning authorities are also being encouraged to defer payments on off-site contributions required under Section 106 agreements. An altogether a more flexible approach is being recommended by the government.
Where your expiring planning permission no longer promises the hefty return on investment justified by the rigorous conditions and substantial financial contributions, would you actually be sorry to see it expire? Alternatively, would you rather opt for a more flexible and substantially less ransomed requirement in obtaining a new permission in these strange and unprecedented times?
If you have a planning permission that you are not sure what to do with then please contact Hayley Kennedy or Tim Bailey in the commercial property team at Beswicks on 01782 205 000 for advice on the best strategy.
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.
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