Tag Archives: Housing

VAT: DIY Housebuilders – relaxation of residency restriction too late for refund

For DIY house builders to be able to recover input VAT from HMRC under Section 35 of the Value Added Tax Act 1994 several conditions must be fulfilled. For one thing statutory planning consent must have been granted and the building must have been constructed in accordance with that consent.

In the First-tier Tribunal (Tax Chamber) case of Akester v Revenue and Customs [2016] the property had been constructed in accordance with the planning permission. However it was being used by the developer in contravention of a residency restriction in that consent at the time HMRC rejected the claim.

The developer had supplied two different dates as to when he occupied the property: the former, 25 March 2015 was in breach of the then planning condition while the latter, 8 October 2015 was after the removal of the condition that prohibited that occupation.

When HMRC refused the developer’s claim for repayment of VAT the requirements of Note 2(c) and (d) of Group 5 of Schedule 8 of the Value Added Tax Act 1994 had not been satisfied.

The legislative requirements were framed in mandatory terms: HMRC were allowed no discretion to accept anything less than a planning permission free of non qualifying residency restrictions, nor could HMRC extend the time limit.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Out of date assessments no barrier to development plan or CIL Schedule

Challenges to a local planning authority’s adoption of a development plan document will rarely succeed. The task of testing the soundness of a development plan document is a matter for planning judgment, exercised within the relevant statutory scheme and against the background of relevant policy and guidance, rather than for the court.

In the Court of Appeal case of Oxted Residential Ltd v Tandridge District Council [2016] :the issue was: was it lawful for a local planning authority to adopt a development plan document and a Community Infrastructure Levy (“CIL”) charging schedule to underpin a core strategy prepared under national planning policy for housing land supply that had been superseded by the National Planning Policy Framework (“the NPPF”) in March 2012?

The first issue

In Gladman Developments Ltd. v Wokingham Borough Council [2014] Lewis J. had concluded that the inspector was “not required by reason of [the NPPF] to consider an objective assessment of housing need in order to assess whether this development plan document was sound”.

The Court of Appeal said whether a particular policy of the core strategy, or of the local plan was up to date within paragraph 49 of NPPF was a question that would arise in the making of a decision where an application had been made for planning permission for housing development – when it might be contended that the council is unable to demonstrate a five-year supply of housing land so that it’s “[relevant] policies for the supply of housing should not be considered up-to-date”.

So the council had not been required to consider an objective assessment of housing need before adopting the local development plan document.

The second issue

Given that there was no up to date local plan the appellant said:

1. it was impracticable for a charging authority to make a rational assessment of the need for infrastructure in it’s area.

2. Any calculation of the contributions to be made by developers in the form of CIL would depend on the amount of development properly planned for.

3. If there was no up to date local plan, with the required five-year supply of housing land, and the authority continued to rely on an out of date plan, the CIL charging schedule would bear no reasonable relationship to the infrastructure required or the source of contributions to that infrastructure.

Disagreeing the court said there was no statutory obstacle to the adoption of a CIL charging schedule when a relevant development plan document is, or may be considered, out of date in the light of subsequently issued national policy or guidance.

There is no requirement in the legislative framework which required a recently adopted plan to be in place before a CIL Schedule can be adopted, and there is no legal reason why a charging authority can only produce a CIL schedule if it has recently produced a plan.

Far from it being necessarily unreasonable for a charging authority to adopt a CIL charging schedule in such circumstances, it would often be the most practical approach to take

It had not been unreasonable for the examiner to accept the council’s argument that, although a review of the core strategy was now anticipated, in the meantime, it would be logical and sensible to have a CIL charging schedule in place to deal with the development planned in the core strategy as adopted, and to revise the CIL charging schedule in the light of the review of the core strategy, or earlier, under the legislative power to do so in section 211(9) of the Planning Act 2008.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Affordable housing contribution could be removed despite occupation of all residences

Section 106BA of Town & Country (Planning) Act 1990 (“the Act”) says an English planning obligation that contains an affordable housing requirement can be modified, replaced, removed or discharged by the planning authority so that the development becomes economically viable.

In Medway Council v Secretary of State for Communities and Local Government & Ors [2016] the permitted development comprised 332 residential units (which had already been built) and 5,738 sq m of commercial floorspace divided into 16 units (which had yet to be built), public open space, new and modified accesses and car parking at Chatham Quays.

Under the related Section 106 Agreement the Developer was to make affordable housing contributions, which the council had agreed be deferred until after the 300th residential unit was occupied. This had happened some time earlier.

The development, taken as a whole, was unviable even without having to make the contribution, as the affordable housing contribution being removed (around £1.3M indexed to October 2014) would be insufficient to off-set the loss (around £12.3M).

With the houses already built and occupied was it too late to get the requirement to contribute removed from the Section 106 Agreement?

The High Court said the development must be seen as a whole, and was still on-going, and not complete, as to its second commercial phase.

In the circumstances the fact that the residential element was already complete and in excess of the trigger number of habitations did not prevent the Developer applying under Section 106BA of the Act.

Whilst the modification applied for would not make the scheme viable, it would improve the viability of the scheme and make it’s completion more likely.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Inaccessibility of Landlord did not dispense with consent requirement

A tenant’s covenant not to carry out alterations without the landlord’s consent is not a covenant by the landlord to give consent, or to be available to receive requests for consent.

If the landlord cannot be found, so that consent cannot be requested, the tenant may not carry out the alterations without being in breach of covenant.

In relation to residential tenancies, section 47(1) of the Landlord and Tenant Act 1987 (“the 1987 Act”) requires that a landlord’s name and address be included in every demand for rent and other sums payable by a tenant to his or her landlord.

Section 48(1) of the 1987 Act also requires tenants to be supplied with an address in England and Wales at which they may communicate with their landlord, including in connection with proceedings.

Where a landlord fails to comply with either section 47(1) or 48(1), sections 47(2) and 48(2) say any rent, service charges or administration charges otherwise due from the tenant to the landlord are treated as not being due until the particular requirement is complied with.

In the Upper Tribunal (Lands Chamber) case of Raja v Aviram [2016] no rent or service charge was demanded by Mr Raja and he supplied no address to Mr Aviram.

The Tribunal said no statute said that a failure by a landlord to provide a name and address meant that a tenant could carry out alterations or take other prohibited steps without the requirement to obtain the landlord’s consent.

Here, Mr Raja could have obtained the name and address of his landlord by searching the Land Register, which he did at one point.

Even if he did not have that address by the time the works were carried out, there was simply no basis on which he was excused the obligation of seeking consent just because his reasonable efforts to locate his landlord had been unsuccessful.

A breach of covenant had been committed by the creation of at least one new hole in the wall of the building for a replacement boiler without the consent of Mr Raja.

This was still the case even though Mr Raja would have consented when satisfied that the work was to be carried out competently.

A modest breach of covenant had been committed. Given the circumstances of that breach it was extremely unlikely that this valuable lease could be forfeited without relief against forfeiture being granted. Though Mr Raja might have been entitled to nominal damages if he had gone to court.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Right to manage: notice of invitation to participate invalid

The purpose of a notice of invitation to participate under section 78 of the Commonhold and Leasehold Reform Act 2002 is to afford to all qualifying tenants of flats in the premises the opportunity to become members of a right to manage (“RTM”) company. Qualifying tenants are entitle to membership (section 74(1)(a)) and in order to give effect to that entitlement the RTM company is required to inform all qualifying tenants who are not already members of its existence, present membership and intentions.

In the Upper Tribunal (Lands Chamber) case of Triplerose Ltd v Mill House RTM Company [2016] the RTM Company was formed in 2011 and gave notices of invitation to participate to each of the qualifying tenants of the 6 flats on 19 March 2013. The notices of invitation to participate wholly omitted the notes which should have been included as part of the prescribed form.

The Tribunal said that the inclusion of the notes in the prescribed form was essential to the validity of a notice of invitation to participate.

So the documents served on the qualifying tenants, having omitted the notes in their entirety were not notices of invitation to participate in accordance with section 78.

Therefore the RTM company could not under section 79(2) give a claim notice seeking to acquire the right to manage.

So the RTM Company had not acquired a right to manage.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Planning: inspector’s mistakes irrelevant to outcome of appeal

On an application for judicial review it is not for the court to second guess what the outcome of a planning appeal would have been if certain errors of law had not been made.

If that court finds errors of law and is inclined to exercise its discretion not to grant relief, it must be satisfied that the decision-maker would necessarily have reached the same decision even if the legal error had not occurred.

It is insufficient for the court to think that the decision:

– probably would have been the same, or
– very likely would have been the same, or
– almost certainly would have been the same

but for the decision-maker’s error.

It must be persuaded that the decision would necessarily have been the same.

In the Court of Appeal case of Secretary of State for Communities and Local Government v South Gloucestershire Council & Anor [2016] the planning inspector, on appeal, misconstrued the implications of paragraphs 47 and 49 of the National Planning Policy Framework which require there to be a five-year supply of land for housing in the council’s area, and planning permission was granted for a mobile caravan to the disadvantaged applicant and his family.

At first instance the High Court exercised its discretion to quash the planning permission.

On appeal the Court of Appeal said the High Court should not have quashed the planning permission.

– The personal circumstances of the applicant,
– the fact that the planning permission would have been merely personal to him, and
– the planning permission’s negligible impact either way on the objectively assessed housing
requirement for the area

were all factors which meant the planning inspector would have granted the planning permission even if the errors of law had not been made at the appeal.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Must a planning committee consider the availability of alternative sites?

Is the availability of a preferable alternative site for development a material planning consideration when a decision maker is considering a planning application?

In the Court of Appeal case of Smech Properties Ltd v Runnymede Borough Council & Anor [2016], planning permission had been granted for the mixed use redevelopment of part of a brownfield site.

The council planning officer’s report advised planning committee members that such availability was not a material consideration.

A nearby owner sought judicial review of the planning permission. One of their main objections was that this advice was wrong.

Disagreeing with that challenge, the High Court had, at first instance, said there is nothing in the Town and Country Planning Act or the Planning and Compulsory Purchase Act which forced a decision maker to have regard to alternative sites.

Nor was there anything in planning policy which expressly or impliedly obliged the decision maker to consider alternatives.

Generally, the fact that there is other land on which the proposed development would, for planning purposes, be more acceptable does not justify planning permission being refused upon an application site.

The fact that in this case the decision maker was considering inappropriate development in the greenbelt did not, of itself, require alternative sites to be considered.

The application site was previously developed land which was a key site specific characteristic. Any requirement to consider alternative sites risked ignoring that.

In fact, neither the neighbouring land owner nor any objector had suggested any site as an alternative for the development proposal as a whole.

On appeal from the High Court, the Court of Appeal said that the High Court judge had been entitled to conclude it “inevitable that if the planning committee had been properly advised about the position in relation to housing need in the Council’s area it would have made the same decision to grant planning permission for this development on the Green Belt.”

The Court of Appeal would not have thought her decision based on that assessment could be said to be “wrong”, even if the Court of Appeal might have made a different overall assessment of the position had the Court of Appeal been deciding the matter afresh.

As it happened, the Court of Appeal agreed with the High Court judge’s assessment.

Given the obligation of the Council “to comply with applicable national planning policy, the pressing nature of the objectively assessed housing need in its area and the especial suitability of the Site for development to make a significant contribution to meeting that need”, it was inevitable that, even if the Council’s planning committee had been properly advised, it would still have decided to grant planning permission for the development.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Local Neighbourhood Plan did not have to meet district Objectively Assessed Housing Needs

How far does a Local Neighbourhood Plan (“LNP”) have to have regard to national planning policy in allocating land for dwellings?

In Crownhall Estates Ltd, R (on the application of) v Chichester District Council & Ors [2016] it was argued that the indicative figure of 60 given in the local plan for Loxwood was too low because of that plan’s failure to meet the Objectively Assessed Housing Requirement (“OAN”) for the district consistently with the requirements of Paragraph 47 of the National Planning Policy Framework (“NPPF”) and that therefore more than 60 new homes should be provided in the LNP.

However the High Court said that reference to paragraph 47 of the NPPF was erroneous in the context of LNP preparation. Whilst that national policy was concerned with the responsibilities of local planning authorities in preparing local plans, it was not concerned with the responsibilities of parish councils preparing neighbourhood plans.

Moreover, the claimant’s argument was inconsistent with the statutory and policy framework.

There had been no requirement for the LNP to meet the full OAN, which is a concept related to a “housing market area” – typically the district covered by a local planning authority, if not larger.

The court approved the local planning authority’s statement that “OAN estimates are based upon demographic projections for the district as a whole and “cannot be readily disaggregated to the level of individual parties on settlements, or to sub-areas of the district.””

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Planning conditions and discharges accommodated changes

In the High Court case of Menston Action Group v City of Bradford Metropolitan District Council [2016] the claimant challenged a planning permission arguing (amongst other things) that planning committee members were significantly misled by the committee report about the extent of the alleged benefits from the surface water drainage provision that was to be made by the development when they were advised that the development proposals would add a storage volume of more than 50% in addition to that presently available at the site.

The claimant said this claim was incorrect.

It omitted the additional requirement for 32.4m³ of storage for surface water discharge arising from the impermeable parts of the site. The claimant said that this amounted to a legal error.

The claimant said condition 5 of the planning permission required that the development be carried out in accordance with the details which were specified in the Flooding and Draining Assessment (“FDA”) which had supported the planning application. In particular the underground storage of 199.2m³ and the discharge flow or pass forward rate of 5 l/sec were required.

Condition 5 required the additional control of runoff or pass forward rates to retain a 50% uplift or increase in flood storage over the existing provision at the site.

The claimant said the details the Council approved to discharge one of the planning conditions changed the pass forward or runoff flow rate and the underground storage volume rendering the discharge unlawful.

The court said it was not possible to interpret condition 5 as requiring identical mitigation measures to those set out in the FDA. It sufficed that the mitigation measures were of the kind, or matched those identified in principle, within the FDA.

Had the conditions required the mitigation proposals to be exactly the same as in the FDA there would have been no need, for example, to provide for further finalising of runoff rates.

Other conditions required further details, calculations and fine tuning in relation to surface water drainage as the project progressed towards implementation.

The drawing mentioned in condition 5 was a “schematic” drawing. It was not intended to be a detailed engineering drawing for actually implementing the consent. “Schematic” laid down the principles but contemplated that:

– further detailed work would be provided, and

– the detail of what was depicted on the drawing would alter prior to the development actually being commenced.

The conditions provided for the Council to vet any further necessary and important detailed work.

The reality was that the details which had been discharged in relation to the conditions ensured that there would be a 50% increase in the site’s storage capacity since the reduction in the pass forward flow ensured that there would be no erosion of the flood storage available to the watercourse.

Condition 6 said:

“No development shall take place until details for proposals for dealing with any existing watercourses, culverts, land drains etc encountered during the works are submitted to and approved in writing by the Local Planning Authority….”

The claimant said the details which had been approved would not provide protection to the existing watercourse from additional discharge of water into it.”

Disagreeing with the claimant, the court said were the works to disclose any unknown watercourse, culvert or land drain which did not accord with the approved details, those details required an amended drainage drawing to be submitted to the Council to get any necessary consent prior to any further drainage work.

This safeguarded against any unknown watercourses being diverted to add to the load of the existing watercourses.

A recent appeal based on Condition 15 of the planning permission has been dismissed by the Court of Appeal (q.v.).

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

5 years’ housing supply: might be relevant consideration for part of an area

Any consideration relating to the use and development of land, or which relates to the character of the use of land, is legally capable of being a relevant planning consideration.

In the High Court case of Edward Ware Homes Ltd v Secretary of State for Communities and Local Government & Anor [2016] the National Planning Policy Framework and the Local Planning Authority’s Core Strategy required the demonstration of a 5 year supply of housing land for the whole of the area of the local planning authority (or the Housing Market Area).

The court said that the distribution of housing land supply across parts or sub-areas of a district, could nevertheless be a legally relevant consideration to be placed into the planning balance when a supply of housing land cannot be identified for the whole district whether over 5 years or the plan period.

This aspect may be relevant to the relative merits of measures for redressing a district-wide shortfall, whether as proposed by a specific developer or by the local authority or others, including the sustainability of those measures.

Although these matters are relevant as a matter of law, the weight to be accorded to them in any particular case is a matter for the planning decision-maker.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.