Commercial to residential conversions – get ready to be quick to beat Article 4

The Consultation Paper "Supporting housing delivery and public service infrastructure" was published 3 December 2020 with a response date of 28 January 2021. As of yesterday, 31 March 2021, the Government has confirmed that it will bring rules into effect that allow commercial premises to be converted into housing. The changes will have effect from 1 August 2021. This is part of the Government's push to revitalise town centres, bringing in a resident population to be on hand to use and grow the town centre offerings such as retail, food and general entertainment.

The various existing residential PD rights are replaced by a new single right that allows all uses that fall within the newly formed Class E (the commercial use class) to convert to housing without needing a to make a planning application. This conversion process is subject to some restrictions but makes it easier for development to go ahead.

The very obvious concern is that the consequential loss of building control by LPAs brings fears for the built environment of unplanned, unsupported and poor quality development. The new PD rights will require a prior approval, but this will be more of a light touch in comparison to the requirements of a full planning application.

So, surely, in order to retake some control back then all the LPA needs to do is look at the General Permitted Development Order 1995 and flip through to Article 4? Article 4 can be used to remove PD rights, and so potentially can require planning applications to be made for commercial to residential conversions. The Government acknowledge this and have said that existing Article 4 Directions will remain in effect until 31 July 2022. So does that fix this loss of control by the LPA? Well, I think not, at least not for a while.

Existing Article 4 Directions have been drafted prior to these new Government proposals coming into effect. So the existing Article 4 wording has been drafted to address more specific limitations than will exist in the post Use Class E world. Reference to relatively narrow use classes (in existing Article 4 Directions) is unlikely to be sufficiently broad to catch the fluidity of the new Use Class E that includes a much wider scope for changing use without consent. So even if the existing Article 4 Directions remain in effect, then they may not actually bite. If the LPAs want to use Article 4 then, for certainty, this can likely only be fixed by the LPA seeking to put in place new Article 4 Directions that are tailored to the new use classes.

All easy stuff then? All the LPA needs to do is put a new, appropriately worded, Article 4 Direction in place? Yes? And then again, no.

If a new Article 4 Direction is sought, then the LPA will need to consult on the proposals, and this will not be a swift process. Also there will be costs involved. In addition the new Article 4 Direction, that the LPA are seeking, will leave it open for compensation claims- for the impact of removing the ability to develop under PD rights. Such claims are based on the loss of value of the PD rights being removed and, as such, quantum is going to be outside the direct control of the LPA. They could be very costly indeed.

To avoid such compensation costs the LPA can use an alternative route to securing their Article 4 Direction. If the LPA provides a 12 month notice period of the Article 4 Direction then the liability will be avoided. This means that (in order for the LPA to avoid compensation claims) there will be at least 12 months between the start of the notice period and the Direction taking effect.

This means that if you are seeking to take unfettered advantage of the new PD rights then you need to get ready to beat any new Article 4 Directions. If the Use Class E removes the need for a planning application to change use from commercial to residential, then there should be at least 12 months to get those conversions done.

On your marks…