Does the house you're buying actually have planning permission?
A property with a newly-built extension or recent alterations is likely to be more attractive to buyers. But were the correct permissions were obtained?
Planning permission and building "regs"
All major work carried out on a property is likely to need planning permission from the local planning authority (LPA). The work must also be compliant with building regulations. Examples where work may need planning include:
- Loft conversion or roof terrace in a conservation area
- Two-storey rear or side extension
- Construction of a permanent outbuilding, e.g. an office or garage
- Solar panels
- Gates and higher boundary walls
- Internal work on a listed building
Some work may be "permitted development" (PD). This means that the work will not require formal planning permission.
The work is also more likely to need planning if it significantly alters the appearance of the property. Therefore, work using radically different materials or building techniques will likely need permission.
A modern, glass side extension to a brick-built Edwardian property would likely need permission.
What do sellers need to reveal?
The principle of caveat emptor ("buyer beware") applies when purchasing any property. This means that it is the buyer's responsibility, with help from their solicitor, to understand what they are buying. Sellers do not need to proactively volunteer anything negative about their property.
However, a seller cannot lie when asked a direct question.
Does it look like work has been done?
When you view the property, the agent will probably be keen to point out any recent and major work. You could ask the agent whether the work has planning permission and if it has been signed off by a building inspector.
Don't worry if you don't get a full, satisfactory answer from the agent or seller. Your solicitor will investigate planning-related issues during the purchase process.
Your solicitor will advise you of the status of any work. You may wish to complete the purchase even in cases where the council has not granted planning permission.
The TA6 Property Information Form
To simplify the information-gathering stage of the process, the Law Society has published a standard property information form. The form is sometimes known as a "PIF" or TA6.
This form includes a wide range of questions that sellers must answer. The form covers a range of issues, from disputes with neighbours to Japanese knotweed.
The TA6 form also requires the seller to provide information about "alterations, planning and building control".
For all work, the seller must provide document copies of:
- planning permissions,
- building regulations approvals, and
- completion certificates.
If all the documents cannot be provided, the seller must explain why.
The form also asks the seller whether they are aware of any breaches of planning permissions or building regulations, whether there are planning issues to resolve, or whether unfinished work lacks necessary consents.
Can the seller avoid the question, or give an incomplete answer?
The TA6 form is just a starting point for the buyer's solicitor. The solicitor will consider the seller's responses and they will follow up on any inconsistencies or missing information.
A property survey can be an invaluable aid here. A buyer should consider sending the building survey on to their lawyer. Their solicitor can "join the dots" between the seller's answers and the surveyor's report, and follow up on any discrepancies.
In some cases, one or more of the following may become clear:
- The work likely needs, but does not have, planning permission
- Planning permission has been refused
- The work has not been signed off by a building inspector
- Building regulations have been breached by the seller
- The work is otherwise not compliant with applicable regulations
These issues may not always be deal-breakers, but you should carefully consider the risks of buying a property affected by these defects.
What are the risks to the home buyer?
There is a range of potential consequences for anyone purchasing a property with building work that lacks the proper permissions and approval. Some of these you may be able to discuss with the agent during a viewing, and some will require a lawyer to investigate more fully.
If an issue does arise, unless the seller has misled and lied to the buyer, the buyer cannot pursue the seller for any of the costs or diminution of value that comes from one of these risks becoming a reality.
Whether you can get a mortgage for the property will often be your first concern. Some lenders will simply not lend on a property affected by planning issues.
Even if you are a cash buyer, the next owner may not be. If you are planning to sell the property in the next few years, you may find that this issue will affect the number of potential buyers.
Cost of reversion or alteration
The council may enforce a building control or planning order against the property. The new owner would then need to pay for the cost of returning the building to the state it was in before the work ("reversion").
Alternatively, the owner may have to pay to bring the work in line with current planning and building regulations.
Diminution of value
These hazards can greatly impact the value of a property. The new owner could be left in negative equity or facing a large bill for new building works, along with weeks or months of disruption.
Is there anything the buyer can do?
There is often a discrepancy between strict planning rules and what a council will take the trouble to enforce. In some parts of the country, regulations may technically require permission for more "minor" alterations like roof terraces and loft conversions.
That said, some local authorities may not rigorously enforce these rules. For this reason, some sellers' may not have bothered to get permission or approval at the time.
Other than ignoring the problem and waiting for the clock to run out (4 years from the completion of the work, in most residential cases), buyers have two main options.
Apply for retrospective consent
The new owner can apply to the local authority for retrospective consent. Where the work is fully compliant and does not breach any conservation area or listed building-related restrictions, the council may grant this consent.
In some cases, an inspector may be unable to confirm whether the work is fully compliant with regulations (because the work is finished, plastered over, etc). The inspector may instead confirm that they will take no further enforcement action.
An indemnity policy
There is a risk that the council could refuse retrospective consent. As a result, the new owner may instead opt to take out an indemnity policy. The policy will insure against the cost of work or losses should the council take enforcement action.
If the council has already refused consent, the buyer may also find it impossible to take out a policy.
A solicitor should be able to advise as to which is the best route.
Most of the issues discussed in this article will only come to light after you have made an offer and the legal work is underway. You should be aware of these issues and may wish to amend your offer in light of their impact.
You may wish to reduce your offer in light of the risk. Alternatively, you could also make an offer subject to the seller applying for approval or consent for the works.
This strategy may make your offer less attractive to a vendor fielding multiple offers, weighing your bid against those of arguably less aware buyers.
As a result, focusing less on the decor and more on the impact of these risks can save you months of stress and heartache.
No one wants to buy a property because they love the new, Grand Designs-style extension, only to have to pay to pull it down.