Commencement of Development – Practical Tips and Pitfalls
Wed 17 Sep 2014
It is important when looking to commence a planning permission that careful consideration is given to the requirements of the relevant planning conditions and section 106 obligations and any liability to CIL. This is to ensure that commencement is undertaken lawfully, in accordance with the timescales on the permission, and recorded in the proper manner so as to demonstrate to any third party that the permission has been properly commenced. This article examines what needs to be done.
What is commencement?
Commencing development means undertaking some limited works on site to commence a planning permission and thus keep it alive. The works must be done within the time period expressed on the permission. For a detailed permission this is a 3 year period (unless a longer period is negotiated) or if no condition is attached a deemed period of 3 years. For an outline permission, reserved matters must be submitted within 3 years of the grant of the permission and the works must be begun within 2 years of the final approval of the last reserved matters (or longer if negotiated).
In order to lawfully commence development it is necessary to satisfy the legal requirements in section 56(4) of the Town and Country Planning Act 1990. This says that “development is taken to be begun on the earliest date on which a material operation is carried out”. A material operation is defined in the Act and can include any works of construction, demolition, digging foundations, laying out or constructing a road and a material change in the use of the land.
In practice, very minor works are sufficient to commence a planning permission. These may include pegging out a road or piling. However, care must be taken to ensure that the works reflect what has actually been approved by the planning permission.
How does this affect the section 106 Agreement?
The Section 106 Agreement may have a very different definition of commencement. The definition may, for example, exclude certain preparatory works in order to push back the date on which the obligations are triggered and payments are made. These terms define when the section 106 obligations are triggered but they do not govern whether a planning permission has been lawfully implemented for the purposes of section 56(4). Commencement therefore has different meanings and there may well be different dates for the purposes of satisfying section 56(4) and triggering the section 106 obligations.
Why commence development?
Commencing the planning permission will keep it alive. This means that the permission can be built out afterwards to your own development programme unless conditions provide otherwise. If it is not commenced within the requisite time periods then the permission will lapse.
Planning permissions change over time and it may be that an extant planning permission is more favourable than one that can be achieved under a different policy framework.
Commencing development will also establish the value of the land in terms of its use value and may assist in the disposal of the land if the purchaser can be assured that the permission has been implemented and secured.
What are the pitfalls?
It is vital that pre commencement planning conditions are discharged before works start on site to commence development. Otherwise any works that are done may not be lawful for the purposes of section 56(4).
It may be necessary to vary planning conditions if there is insufficient time in which to discharge them before works need to start on site to keep the permission alive. It may be necessary to consider a section 96a application to vary the wording of conditions and delay the date for compliance.
Similarly it may be necessary to vary the section 106 agreement if the works done on site would trigger payment contributions and other obligations.
What effect does commencement have on CIL?
Commencing development will trigger the requirement to pay community infrastructure levy (CIL) sums. The meaning of commencement of development for the purposes of the CIL Regulations 2010 is the same as section 56(4) and will include, for example, demolition and other minor works.
Unless the charging authority has published an instalment policy sums will be payable within 60 days from the date of commencement.
To avoid financial penalties and ensure that you do not fall foul of the CIL Regulations in relation to commencement, it is vital that you submit the following before commencement:-
- Assumption of Liability Notice (if not, the charging authority may have to apportion liability to the landowners and a surcharge would be payable);
- Commencement Notice of the intended date of commencement (if not, the charging authority may have to determine a deemed commencement date and surcharges are payable for this and the failure to submit the notice);
- (if applicable) social housing relief claim and obtain the authority’s decision (if not, entitlement to the relief will lapse and cannot be claimed)
How do you prove commencement has taken place?
It is prudent to put in place a paper trail to evidence that commencement has occurred before the planning permission expires. This may be necessary for lenders or prospective purchasers or funders, to provide comfort that commencement has taken place.
The following should be considered:-
- evidence of commencement including photographs (timed) and emails and correspondence from engineers / contractors confirming the scope of the works and payment for the works
- letter of comfort from the local authority that development has commenced
- legal opinion from solicitors and /or Counsel as to the lawfulness of commencement
- certificate of lawfulness to confirm the lawfulness of the works that have been done on site i.e. that they are in accordance with the permission and no enforcement action can be taken.