We reported recently that, unexpectedly, the government has not extended the temporary right that it introduced in the spring of 2013 to change the use of a building from office to residential without having to obtain a grant of planning permission. Unless the government has a change of heart, the right will expire on 30 May 2016. The question which is becomingly increasingly pressing as the deadline approaches is: what steps have to be taken prior to 30 May 2016 in order to establish a lawful residential use?
The change of use of office floorspace into a residential flat involves both the carrying out of physical works to create the unit and equip the floorspace with the necessary facilities for residential occupation, and the occupation of the floorspace for residential purposes. The legislation states that development is not permitted if “the use of the building falling within Class C3 (dwellinghouses) was begun after 30 May 2016”. Common sense dictates that this requirement is given a reasonably liberal interpretation in borderline individual cases, for example where someone has taken up occupation but some minor works remain to be completed or where the conversion works have been completed and the property is sold but not yet occupied. More difficult questions arise, however, where, as will usually be the case, the scheme involves the creation of a number of flats. What is the position if some of the flats have not been occupied or the conversion of part of the building has not been completed by 30 May next year?
The question is essentially whether different parts (perhaps floors) of the building can be considered separately, in which case, broadly speaking, the floorspace that has been converted and occupied is likely to be regarded as having acquired a lawful residential use with the remainder staying as office; or whether the building needs to be considered as a whole, in which case the lawful use of it will be regarded as either residential or office throughout.
Some commentators have argued that the “building as a whole” approach should be adopted because the application for prior approval of subsidiary matters (which is a prerequisite for reliance on this permitted development right) will generally refer to the conversion of the whole of the building. Certainly, the adoption of this approach is likely to be produce a sensible outcome where the vast majority of the floorspace is occupied for residential purposes and relatively little needs to be done to complete the conversion of the whole building. However, the approach would produce difficulties where only a minority of the floorspace has been converted but that floorspace has been sold or is being occupied. It would mean that those moving into parts of the building that have been converted to residential use would not know whether or not the residential use would be regarded as lawful until an assessment could be made on 30 May 2016 as to the extent to which the rest of the building had been converted.
For this reason, notwithstanding the scope of the development described in the application for prior approval, it is perhaps more likely that those parts of the building (which have become discrete parts as a result of works) will be regarded separately. Those parts which have been converted and are being occupied for residential purposes could be regarded as having a lawfully established residential use with the remaining parts staying in office use. This approach could still, however, produce some unsatisfactory outcomes, for example residual office space that is not viable to use for office purposes and different parts of the same floor of a building being in different uses. It would also be more difficult to administer than an all-or-nothing approach.
It is to be hoped, therefore, that the government will introduce further regulations or at least guidance to provide the development industry and funders with a clearer understanding of how conversion projects (in particular multi-unit projects) that have been commenced but not completed by the end of May next year will fall to be treated. A limited time extension (which would require legislation) for those projects which have gone through the prior approval process and been commenced before 30 May 2016 would also be useful.
Mark Harnett, Partner, Fladgate LLP (email@example.com)