Thomas Coates answers the question: ‘can the property you are purchasing be used as a dental practice?’
If you’re looking to purchase a practice, either by purchasing the freehold outright or obtaining a lease, it is important to know whether the property has the correct planning permission for its intended use.
The Town and Country Planning (Use Classes) Order 1987 (as amended) puts uses of land and buildings into categories know as ‘use classes’, which determine what a property may be used for by its occupants. They are used by local planning authorities to maintain a balance between residential and business areas. As such, they have the power to prevent business activities from taking place if it is felt that it would be detrimental to the community.
Use classes are split into four main categories: A-D. Class A covers shops and services; class B business and industrial activity; class C hotels, hostels and dwelling houses; and class D non-residential institutions such as healthcare practices.
Purchasing a property
Before you negotiate a lease or buy a property for your business, your solicitor will need to check whether planning permission is needed for your intended use, and, if so, your chances of getting it. Your solicitor will do this as part of the standard searches carried out in property purchases.
If the premises you are purchasing are currently being used as a dental practice, you will need to check whether there is planning permission already in place to that extent. If not, it will be important to put in place indemnity insurance. This will protect you from any action brought against the property by the local authority or other related parties for the premises being used outside the scope of what is allowed.
The risks of not having permission
If the use of the property has been changed without obtaining the requisite planning permission, the local authority can take enforcement action. This would mean the owner of the property will have to take whatever action the local authority decides is necessary to remedy the breach. This can be as simple as having to obtain the relevant planning permission, or may involve removing the offending structure or refraining from using the property in the prohibited way.
Initially, the local authority will contact the property owner and provide a timeframe in which the breach must be remedied. Non-compliance will mean an enforcement notice.
The 10-year rule
Under s171B of the Town and Country Planning Act 1990, the local authority can only take enforcement action with 10 years of the breach (change of use). If the local authority fails to act within 10 years, it loses its rights to do so. As a result, for all intents and purposes the change of use is rendered lawful.
To establish that the use is now rendered lawful due to the long use of the property, your solicitor will look to obtain a statutory declaration from the seller. A statutory declaration is a legal document that sets out the length of time the property has been in use, for example as a dental practice, and that this has been without interruption. It will also confirm that no notice or objection has been received from any third party including the local authority. This will be signed by the seller in the presence of a solicitor who will endorse the document.
Planning permission indemnity insurance
If the property that you are purchasing does not have the requisite planning permission, a common solution will be to obtain lack of planning permission indemnity insurance. This will protect the property if the local authority takes enforcement action. A claim can be made on the policy in respect of costs of defending or complying with the action and any resulting loss of value to the property.
Obtaining indemnity insurance may also be a requirement of your mortgage lender, as it will be required to be in place before funds are released to you for your purchase.
Take early legal advice to avoid financial penalties and/or criminal action. For advice, call 0113 834 37401 or email [email protected]