The Rent Review Specialist
Use and User
Lawful Development Certificates
There are instances where changes of use can take place without the need for planning permissions. This is because the Use Classes Order 1987 specially provides that they are not to be regarded as development; the issue of materiality therefore becomes irrelevant. Below are some examples:
(a) Changes of use within the same Class. The Use Classes Order provides: "....where a building or other land is used for a purpose of any class specified in the Schedule, the use of that building or that other land for any other purpose of the same class shall not be taken to involve development of the land."
Take Class A1 (Shops) as an example; there are ten uses listed: (a) for the retail sale of goods other than hot food, (b) as a post office, (c) for the sale of tickets or as a travel agency, (d) for the sale of sandwiches or other cold food for consumption off the premises, (e) for hairdressing, (f) for the direction of funerals, (g) for the display of goods for sale, (h) for the hiring out of domestic or personal goods or articles, (i) for the washing or cleaning of clothes or fabrics on the premises, (j) for the reception of goods to be washed, cleaned or repaired, where the sale, display or service is to visiting members of the public. Under the above provision, no planning permission is needed to change from the use of a building as a post office to hairdressing, but it does not follow that a change from a use within a particular Use Class to another use outside it must necessarily require planning permission. The basic principle will apply in deciding whether planning permission would be required: is it a material change of use?
(b) Incidental use The Use Classes Order 1987 also provides that if the use of a building falls within one of the USE CLASSES, then no planning permission is required for using part of it for any use which is "ordinarily incidental" to that use. An example would be where part of a shop (Class A1) is used as an office (Class B1). Note that where a use is incidental or ancillary to the main use, it cannot be detached and turned into an independent use. Sui Generis Uses A use that does not fall within a CLASS is often referred to as a sui generis use. Whether planning permission would be required for a change to or from a use will depend solely on whether the change is "material". Sui Generis Uses outside the Use Classes Order The Use Classes Order specifically provides that certain uses are not to be taken as being within any use class. The uses are as follows: - as a theatre, - as an amusement arcade or centre, or a funfair, - as a launderette, - for the sale of fuel for motor vehicles (petrol stations), - for the sale or display for sale of motor vehicles, - for a taxi business or business for the hire of motor vehicles, - as a scrap yard, or a yard for the storage or distribution of minerals or the breaking of motor vehicles, - for any work registrable under the Alkali, etc Works Regulation Act 1906, - As a hostel. Whether planning permission would be required when any of the above uses is involved will again depend on whether the change is "material". Reverting to a former use By way of an example, if the use of a building has changed from office to restaurant, then planning permission would be required to revert to office use. In certain limited cases, no planning permission would be required for reversion to the former use. These are where the intermediate use was: - subject to a time limit condition in the grant of permission; - in compliance with an enforcement notice; - permitted by a Development Order. Abandonment of use Where a building or land has not been used for a while, no permission is needed to resume the last use. If, however, it has been unused for so long that it can be considered that the last use has now been abandoned, planning permission would be required to restart the use. "....when a man ceases to use a site for a particular purpose and lets it remain unused for a considerable time, then the proper inference may be that he has abandoned the former use. Once abandoned, he cannot start to use the site again, unless he gets planning permission: and that is so, even though the new use is the same as the previous one." Hartley v MHLG [1970].
Lawful Development Certificates There are two types of certificate: (i) If the works had not yet been carried out, apply for a Certificate of lawfulness of proposed use or development (CLOPUD). (ii) If the works had already been carried out, apply for a Certificate of lawfulness of existing use or development (CLEUD). Determination of an application for a CLEUD Whether a certificate for a CLEUD should be granted or not is solely a matter of law. The determination will be based on the evidence provided by the applicant, and the local authority's view on the development, however much it is disliked, is totally irrelevant. The Four and Ten year rules. The four and ten year rules are relevant in an application for CLUED.
The local planning authority cannot take enforcement actions if: (a) the operational development was substantially completed more than four years ago; (b) in the case of a change of use of any building to use as a single dwellinghouse, no enforcement action may be taken after then end of the period of four years beginning with the date of the breach; (c) in the case of any other breach of planning control, no enforcement actions may be taken after the end of the period of ten years beginning with the date of the breach. On expiration of the time for enforcement, the uses and operations become lawful and it is advisable, in these circumstances, to apply for a CLEUD. This is because a later purchaser of the land may not have the evidence to prove the lawfulness of the development; in any event, the purchaser would, no doubt, wish to see that a CLEUD has been issued in order to be satisfied that the development is lawful.
(a) Changes of use within the same Class. The Use Classes Order provides: "....where a building or other land is used for a purpose of any class specified in the Schedule, the use of that building or that other land for any other purpose of the same class shall not be taken to involve development of the land."
Take Class A1 (Shops) as an example; there are ten uses listed: (a) for the retail sale of goods other than hot food, (b) as a post office, (c) for the sale of tickets or as a travel agency, (d) for the sale of sandwiches or other cold food for consumption off the premises, (e) for hairdressing, (f) for the direction of funerals, (g) for the display of goods for sale, (h) for the hiring out of domestic or personal goods or articles, (i) for the washing or cleaning of clothes or fabrics on the premises, (j) for the reception of goods to be washed, cleaned or repaired, where the sale, display or service is to visiting members of the public. Under the above provision, no planning permission is needed to change from the use of a building as a post office to hairdressing, but it does not follow that a change from a use within a particular Use Class to another use outside it must necessarily require planning permission. The basic principle will apply in deciding whether planning permission would be required: is it a material change of use?
(b) Incidental use The Use Classes Order 1987 also provides that if the use of a building falls within one of the USE CLASSES, then no planning permission is required for using part of it for any use which is "ordinarily incidental" to that use. An example would be where part of a shop (Class A1) is used as an office (Class B1). Note that where a use is incidental or ancillary to the main use, it cannot be detached and turned into an independent use. Sui Generis Uses A use that does not fall within a CLASS is often referred to as a sui generis use. Whether planning permission would be required for a change to or from a use will depend solely on whether the change is "material". Sui Generis Uses outside the Use Classes Order The Use Classes Order specifically provides that certain uses are not to be taken as being within any use class. The uses are as follows: - as a theatre, - as an amusement arcade or centre, or a funfair, - as a launderette, - for the sale of fuel for motor vehicles (petrol stations), - for the sale or display for sale of motor vehicles, - for a taxi business or business for the hire of motor vehicles, - as a scrap yard, or a yard for the storage or distribution of minerals or the breaking of motor vehicles, - for any work registrable under the Alkali, etc Works Regulation Act 1906, - As a hostel. Whether planning permission would be required when any of the above uses is involved will again depend on whether the change is "material". Reverting to a former use By way of an example, if the use of a building has changed from office to restaurant, then planning permission would be required to revert to office use. In certain limited cases, no planning permission would be required for reversion to the former use. These are where the intermediate use was: - subject to a time limit condition in the grant of permission; - in compliance with an enforcement notice; - permitted by a Development Order. Abandonment of use Where a building or land has not been used for a while, no permission is needed to resume the last use. If, however, it has been unused for so long that it can be considered that the last use has now been abandoned, planning permission would be required to restart the use. "....when a man ceases to use a site for a particular purpose and lets it remain unused for a considerable time, then the proper inference may be that he has abandoned the former use. Once abandoned, he cannot start to use the site again, unless he gets planning permission: and that is so, even though the new use is the same as the previous one." Hartley v MHLG [1970].
Lawful Development Certificates There are two types of certificate: (i) If the works had not yet been carried out, apply for a Certificate of lawfulness of proposed use or development (CLOPUD). (ii) If the works had already been carried out, apply for a Certificate of lawfulness of existing use or development (CLEUD). Determination of an application for a CLEUD Whether a certificate for a CLEUD should be granted or not is solely a matter of law. The determination will be based on the evidence provided by the applicant, and the local authority's view on the development, however much it is disliked, is totally irrelevant. The Four and Ten year rules. The four and ten year rules are relevant in an application for CLUED.
The local planning authority cannot take enforcement actions if: (a) the operational development was substantially completed more than four years ago; (b) in the case of a change of use of any building to use as a single dwellinghouse, no enforcement action may be taken after then end of the period of four years beginning with the date of the breach; (c) in the case of any other breach of planning control, no enforcement actions may be taken after the end of the period of ten years beginning with the date of the breach. On expiration of the time for enforcement, the uses and operations become lawful and it is advisable, in these circumstances, to apply for a CLEUD. This is because a later purchaser of the land may not have the evidence to prove the lawfulness of the development; in any event, the purchaser would, no doubt, wish to see that a CLEUD has been issued in order to be satisfied that the development is lawful.
VAT and storage
"As from 1 October 2012, the VAT exemption for storage facilities was withdrawn on a blanket basis and VAT will automatically be payable on rent even if the option to tax has not been exercised.
VAT Information Sheet 10/13 was published on 9 August 2013 and clarified what was intended by the changes which came in on 1 October 2012. The IS states that the new rules apply to suppliers of “any facility which is used, or could potentially be used, by their customers for the storage of goods and customers who rent facilities to store goods”.
The IS clarifies that the changes do not just apply to “self-storage”, which could be narrowly defined as storage just by the end user, but storage by either the supply recipient (customer) or a third party with the customer`s permission if not under a separate supply (for VAT purpose).
The law refers to “facilities for the self-storage of goods” but the guidance states that the changes are not restricted to the type of storage where a small area within a dedicated building is rented by an individual to store their own personal property. The self-storage of goods, therefore, means any storage of goods by an end user.
Storage use includes physical storage, regardless of the supplier’s intention or any agreement between the parties, or storage implicitly intended from the nature of the premises, or commercial documentation in the absence of other actual use. If premises are used for more than one purpose, the rules on multiple and composite supplies will apply and there are examples contained in the IS.
The ramification for landlords is that, as the supplier of premises, they need to monitor the use to which the leased premises are put. Premises which are exempt from VAT in the normal case (and in respect of which no VAT election has been made) will become chargeable automatically for VAT in the event that the tenant, or a third party with the tenant’s permission, uses the whole or part of the premises for storage.
As is often the case, an absentee or institutional landlord will not know how the tenant is using the premises or permitting their use. The IS recommends that the landlord obtains and retains written confirmation of the use from the tenant. It will be necessary, in future, for all leases to contain a requirement for the tenant to supply such information, so that the landlord can comply with the law.
Where premises are sub-let, the head landlord will not need to charge VAT (in the absence of an election) but the intermediate landlord may need to begin to charge VAT if the sub-tenant or a third party with the sub-tenant’s consent (not a separate sub-underlessee or sub-licensee) begins to use the premises for storage. "
VAT Information Sheet 10/13 was published on 9 August 2013 and clarified what was intended by the changes which came in on 1 October 2012. The IS states that the new rules apply to suppliers of “any facility which is used, or could potentially be used, by their customers for the storage of goods and customers who rent facilities to store goods”.
The IS clarifies that the changes do not just apply to “self-storage”, which could be narrowly defined as storage just by the end user, but storage by either the supply recipient (customer) or a third party with the customer`s permission if not under a separate supply (for VAT purpose).
The law refers to “facilities for the self-storage of goods” but the guidance states that the changes are not restricted to the type of storage where a small area within a dedicated building is rented by an individual to store their own personal property. The self-storage of goods, therefore, means any storage of goods by an end user.
Storage use includes physical storage, regardless of the supplier’s intention or any agreement between the parties, or storage implicitly intended from the nature of the premises, or commercial documentation in the absence of other actual use. If premises are used for more than one purpose, the rules on multiple and composite supplies will apply and there are examples contained in the IS.
The ramification for landlords is that, as the supplier of premises, they need to monitor the use to which the leased premises are put. Premises which are exempt from VAT in the normal case (and in respect of which no VAT election has been made) will become chargeable automatically for VAT in the event that the tenant, or a third party with the tenant’s permission, uses the whole or part of the premises for storage.
As is often the case, an absentee or institutional landlord will not know how the tenant is using the premises or permitting their use. The IS recommends that the landlord obtains and retains written confirmation of the use from the tenant. It will be necessary, in future, for all leases to contain a requirement for the tenant to supply such information, so that the landlord can comply with the law.
Where premises are sub-let, the head landlord will not need to charge VAT (in the absence of an election) but the intermediate landlord may need to begin to charge VAT if the sub-tenant or a third party with the sub-tenant’s consent (not a separate sub-underlessee or sub-licensee) begins to use the premises for storage. "
Use Class A5
In 2009, LB Waltham Forest introduced a policy, likely to be copied by other planning authorities, of not allowing take-away food shops to open within 400 metres of schools, parks and youth centres. Also, the North East London planning authority has begun consulting on a suite of development control policies which would restrict the number of fast-food outlets within primary, secondary and retail parade zones.
Until the 400-metre rule becomes nationally adopted planning policy, the point would only arise within LB Waltham Forest. In the meantime, to prepare for the possibility!
At rent review in the lease of premises whereby the permitted user is take-away foods - Use Class A5 is hot food takeaway, and possibly A3 - an assumption of the hypothetical tenant being able to get planning permission for such use is normal. If the premises are within 400 metres of a school, park and youth-centre, then in the open market the assumption would fail in practice. That could have the effect of either increasing the market rent, on the basis that if the premises did not already have take-away use then it would not be allowed, in which case there is a scarcity value, or reducing the market rent on the basis that in the market such planning use would not be allowed.
At lease expiry, if the tenant requires a lower rent or it will not renew, the landlord will have to weigh up the consequences of conceding a lower rent against the risk not being able to re-let the premises for take-away use if the planning permission for such use were to elapse.
There are thousands of take-away food shops. Checking the distance to the nearest school, park and youth-centre will be necessary when evaluating the rent.
Until the 400-metre rule becomes nationally adopted planning policy, the point would only arise within LB Waltham Forest. In the meantime, to prepare for the possibility!
At rent review in the lease of premises whereby the permitted user is take-away foods - Use Class A5 is hot food takeaway, and possibly A3 - an assumption of the hypothetical tenant being able to get planning permission for such use is normal. If the premises are within 400 metres of a school, park and youth-centre, then in the open market the assumption would fail in practice. That could have the effect of either increasing the market rent, on the basis that if the premises did not already have take-away use then it would not be allowed, in which case there is a scarcity value, or reducing the market rent on the basis that in the market such planning use would not be allowed.
At lease expiry, if the tenant requires a lower rent or it will not renew, the landlord will have to weigh up the consequences of conceding a lower rent against the risk not being able to re-let the premises for take-away use if the planning permission for such use were to elapse.
There are thousands of take-away food shops. Checking the distance to the nearest school, park and youth-centre will be necessary when evaluating the rent.