21.10.2024

Tales from the CIL Files: Retained buildings, floorspace deductions and retrospective consents.

Whilst MHCLG* grapple with an avalanche of consultation responses… and the rest of us await the budget… I thought I would spend some time exploring the archives of one of my more esoteric interests.

That's right. You are about to enter another dimension, a dimension not only of sight and sound but of mind. A journey into a wondrous land of calculation. Next stop, the CIL Files! 

Well…. technically… the VOA archive of published CIL Appeal decisions, which is fully available online, but best imagined as a storage room filled with filing cabinets located at the end of a long, dark, dusty corridor with ominous shadows and dodgy lighting.

I was catching up on my lurking/reading in the archives earlier this week, when this decision caught my eye.  

It was published on 2 October 2024 under the catchy title “CIL Appeal 1846148 – 18 Sep 24 – to allow for construction of 3 x dormer windows in west elevation and other alterations to development” but don't let the name fool you. It is a remarkably good read.

The decision caught my attention because it both delves into, and handily explains, two of the less high profile floorspace deductions in the CIL Regs. The deductions for retained floorspace. 

It also contains some interesting commentary on how these deductions relate to retrospective consents.

There are two “retained floorspace” deductions in the CIL Regs:

• The “KR(i)” deduction relates to retained parts of in-use buildings.
• The “KR(ii)” deduction applies to retained parts of relevant building where “the intended use following completion of the chargeable development is a use that is able to be carried on lawfully and permanently without further planning permission in that part on the day before planning permission first permits the chargeable development.”

Now, before we go any further, I need to set out some useful definitions and a remind you of some caselaw. Then we can crack on.

•  “In-use building” is defined in schedule 1, part 1, of the CIL Regs as a relevant building that "contains a part that has been in lawful use for a continuous period of at least six months within the period of three years ending on the day planning permission first permits the chargeable development”.
• “New build” is defined as “that part of the chargeable development which will comprise new buildings and enlargements to existing buildings, and in relation to a chargeable development granted planning permission under section 73 of TCPA 1990 (“the new permission”) includes any new buildings and enlargements to existing buildings which were built pursuant to a previous planning permission to which the new permission relates;”
• “Relevant building” is defined as “a building which is situated on the relevant land on the day planning permission first permits the chargeable development”. 
• “Retained part” is defined as  part of a building which will be on the relevant land on completion of the chargeable development (excluding new build); part of the chargeable development on completion, and chargeable at rate R.
• Relevant land is defined in reg. 2 of the CIL Regs as "the land to which the planning permission relates” or where planning permission is granted which expressly permits development to be implemented in phases, the land to which the phase relates

The second of these deductions for retained buildings, the KR(ii) deduction, was discussed at length by the Court of Appeal in a case commonly referred to as Giordano. 

In brief, the Court of Appeal in Giordano found that the KR(ii) deduction could "certainly include an extant lawful use. But it would also embrace – as in this case – a use that can lawfully be carried on in the retained parts of the building under an implementable planning permission granted before, or on, the relevant day, or with the benefit of "permitted development" rights".

The full judgment can be found here. It is worth a quick read, as it crops up later.

Now, back to my VOA Appeal Decision. It has been anonymised but, reading between the redactions, the facts seem to be as follows:

• Planning permission was granted to convert a building into two dwellings;
• A s.73a permission was later granted to change the plans to that earlier consent. This may or may not have created a third dwelling - as ‘plot 3’ shows up in a minute. This consent was retrospective.
• Before the s.73a consent was granted,  “plot 3” was occupied - i.e. someone started living there. Crucially occupation occured before all of the relevent pre-occupation conditions on the earlier permission had been granted, and the development, as-built, was not in accordance with the approved plans.

The LPA and the Developer fell out over the resulting CIL liability for the s.73a Consent. 

The Developer claimed that the whole building should be exempt from CIL under either or both of the KR(i) and KR(ii) deductions. The LPA clearly disagreed.

So… what did the VOA decide? Well, I am going to let the Inspector tell you in his own words. From here on out, I quote heavily from the decision. Any redactions will be replaced with "BLEEP"… because it amuses me.

KR(i) deductions: retained parts in lawful use.

"14. The appellant argues that Plot 3 (now known as BLEEP ) was occupied as a dwelling from BLEEP until  BLEEP, a period of six months before planning permission was granted in BLEEP . They have provided evidence of this occupation in the form of photographs, utility bills and statutory declarations from the occupiers. The occupation itself does not appear to be in dispute but the lawfulness of the occupation is disputed by the CA.

15. The CA state that the development was in breach of conditions 1, 8 and 13 of planning permission BLEEP and therefore any use would not be lawful. The appellants argue that details relating to conditions 2, 7, 8 and 12 were submitted to the CA in  BLEEP but no formal decision was issued. A deemed discharge application was then submitted on BLEEP
and as no decision was issued, the conditions are deemed to be discharged. The planning officer report for the BLEEP  permission confirms that conditions 2, 7, 8 and 12 of BLEEP have been discharged. 

16. The appellants acknowledge that the visual appearance of BLEEP in BLEEP differs from that shown on the approved plans for BLEEP and that the elevations as built are different from those approved. However, they state that this affects only the external appearance and not the use of the building as a dwelling"

…..

"22. The CA state that the development was in breach of conditions 1, 8 and 13 and is therefore unlawful. 

23. The appellants agree that condition 1 was not complied with but state it does not go to the “heart of the permission” such that failure to comply with this condition would render the entire development unlawful. For condition 8, the appellants state that whilst the 
details were never formally discharged, the detail submitted in BLEEP was sufficient and acceptable. They make no reference to condition 13."

…….

“25. In my opinion, condition 1 does go to the heart of the matter. I do not accept that a building constructed contrary to the approved plans can be lawful and it is not possible to retrospectively discharge these conditions without major construction work to alter the building to accord with the plans. I therefore do not accept that BLEEP can be considered a lawful in-use building for the purposes of CIL”.

KR(ii) deductions: other retained parts.

"28. The appellants argue that the building had an ability to be used for residential purposes on the day before planning permission was granted. They state therefore that this use could continue lawfully and permanently without further planning permission.

29. The appellant refers to the case of Giordano v Camden LBC [2019] in which the court of appeal upheld a KR(ii) deduction when there was an existing planning permission to convert an office block to six flats. In this case, Camden LBC argued that the floor space should be capable of the intended use under the chargeable development without the need for further physical adaptation. The judge decided against Camden LBC and found that the need to carry out physical works did not preclude a valid KR(ii) claim.

30. The appellants argue that the Giordano case shows that the requirement for works to be carried out, does not prevent the lawful use from existing. The appellants in this case had the option to carry out works to make the BLEEP consent lawful and there is no requirement in the CIL regulations that this work had to have been carried out. They have supported their view with legal advice from Christoper Cant of the Barrister’s Group.

31. The CA argue that that this appeal differs to the Giordano case because the amended permission in the Giordano case was granted prior to the work being carried out. They do not consider the building to be a relevant building because the works were completed in breach of planning. They also argue that the permission includes new build additions and is not purely a conversion of the existing property.

32. In my opinion, the property is a relevant building as it existed on the relevant land. The original building (excluding new build) also falls within the definition of a “retained part” as it remains on the land at completion of the chargeable development and is part of the chargeable development.

33. The question therefore is whether “the intended use following completion of the chargeable development is a use that is able to be carried on lawfully and permanently without further planning permission"

…..

"36. In my opinion, the facts of the Giordano case are similar to this case, in that the property had planning permission for residential use on the day before planning permission was granted. Although the building had been converted contrary to the existing planning permission, there is no requirement under KR(ii) that any use must have been lawful. 
The judge in the Giordano case makes it clear that works need not have been carried out, provided that there is an extant and implementable planning permission. I am therefore of the opinion that a KR(ii) deduction of the GIA of the retained parts of the original building (excluding new build) should be applied in this case."

GIA of retained parts and retrospective consents

"39. The appellants comment in their additional representations that by the date of the grant of the BLEEP permission, the whole of the first floor had been floored and the second floor constructed so that these areas as well as that of the ground floor are comprised in the 
GIA of the retained parts. They state that the BLEEP permission is a section 73a permission and not a section 73 permission, so these additions do not comprise “new build.” Their opinion of the total GIA including these areas is BLEEP."

"43. The chargeable development in this case is labelled as a section 73a permission and not a section 73 permission. The purpose of the application was to allow for the BLEEP permission (itself a s73 permission) to be completed without compliance with Condition 1 (approved plans), which would typically be considered a section 73 permission. However, as the consent was granted retrospectively, it was granted under section 73a. Although the CIL regulations do not explicitly refer to 73a permissions within the definition of new build, I consider that the purpose of this application is the same for any amendment permission, whether granted under section 73 or 73a. As a result, I consider that the section 73 rules should apply and any new build constructed as a result of the previous amendment planning permissions should be disregarded."

Conclusion

So what have we learned from this brief rummage through the CIL Files?**

To recap:

• Failure to comply with planning conditions can kill your ability to rely on a “lawful use” deduction, whether it be for retained or demolished floorspace.
• It will not, however, impact the availabilty of a deduction for “other retained floorspace” under KR(ii); and
• The VOA are unlikely to let you rely on the fact that your s.73 permission is retrospective to evade the ‘s.73’ exception in the definition of new build floorspace…. although, given how strictly the regs have been interpreted in the past and current government guidance on the treatment of retrospective consents in other parts of the regulations, it would be interesting to see if the Courts took a similar approach to this question!

 

 

 

*and other Planoraks… Yes, I mean you, Zack Simons!

** besides the fact that I clearly can't be trusted with a BLEEP button….

In my opinion, the facts of the Giordano case are similar to this case, in that the property
had planning permission for residential use on the day before planning permission was
granted. Although the building had been converted contrary to the existing planning
permission, there is no requirement under KR(ii) that any use must have been lawful.
The judge in the Giordano case makes it clear that works need not have been carried
out, provided that there is an extant and implementable planning permission. I am
therefore of the opinion that a KR(ii) deduction of the GIA of the retained parts of the
original building (excluding new build) should be applied in this case”