Does the house you're buying have planning permission?

What are the risks of buying a home that's been improved without planning permission? How can you check, and what are your options if approval is missing.

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New house being built

Planning Permission and Building Regulations

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

Permitted Development (PD)

Some extensions don't require full planning permission and can be built in accordance with Permitted Development (PD) rights. All extensions will need building regulations consent, however.

Permitted Development is a term given to works which, although they may technically require planning permission, are deemed to have permission granted under a general permitted development order.

Generally, this means a property may be extended to the rear or side without planning permission, providing the extension meets certain conditions.

These conditions stipulate that an extension must be bigger than 15% of the original volume or the property or 10% if the house is part of a terrace. The extension must not project too far from the original property and shouldn't take up more than 50% of the garden.

What do sellers need to disclose?

A seller will complete various standard property forms about their property and how they have used it.

The TA6 Property Information Form specifically asks the seller if any changes have been made to the property including building works (e.g. extension, loft or garage conversion, removal of internal walls), changes to doors and windows and the addition of a conservatory.

The seller is then asked to supply copies of the planning permissions, Building Regulations approvals and
Completion Certificates.

The TA6 also asks if the seller is aware of any breaches of planning permission conditions or Building Regulations consent conditions, unfinished work or work that does not have all necessary consents.

The seller must complete the form honestly and provide details of any work carried out.

If a seller fails to disclose any work carried out which you subsequently discover as the new owner, you would have grounds for legal action.

You can see a copy of the full Law Society TA6 form here:

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.

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 detailed, satisfactory answer from the agent or seller. Your solicitor will investigate planning-related issues during the conveyancing purchase process. However, if the property doesn't have the appropriate consents, the seller or agent may come clean at this stage. With this upfront information, you can make an informed decision without wasting time unnecessarily.

A home buyers survey or building survey may offer valuable insights. If you opt for a survey, make sure you send it to your solicitor. The solicitor can then "join the dots" between the seller's answers and the surveyor's report, following up on any discrepancies if necessary.

Bad news

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 are not necessarily deal-breakers. However, you should carefully consider the risks of buying a property affected by these defects.

What are the risks to the home buyer?

Mortgageability

Some lenders will not lend on a property affected by planning issues. Even if you are a cash buyer and are unconcerned by the issues, the next potential owner may not be. If you are planning to sell the property in the next few years, you may find that this issue will come back to haunt you.

Cost of reversion or alteration

The local authority may enforce a building control or planning order against the property. As the new owner, you would need to pay for the cost of returning the building to the state it was in before the work ("reversion").

You may also have to pay to bring the work in line with current planning and building regulations.

Diminution of value

The cost and disruption of bringing the property up to the necessary standard could impact the value of a property. This loss of value is known as 'diminution of value'.

What is the solution?

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. If 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

A more common solution is for the buyer to purchase a buildings indemnity insurance policy. This policy will insure against the cost of any reversionary work if the council takes enforcement action.

Indemnity policies are a standard part of the conveyancing process, offering a fast and simple resolution that need not hold up the purchase.

An indemnity policy would normally be paid for by the seller and could be transferred to subsequent buyers. Ask your conveyancing solicitor for more information on indemnity policies.

Important

However, if permission has already been refused or if the seller has informed the local authority of the works, a policy would be void.

Conclusion

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 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. However, this strategy may make your offer less attractive to a seller who may have other offers.

Most solicitors will now recommend an indemnity insurance policy as the quickest and easiest solution to missing planning permission or Building Regulations.

Your next step

If you are buying, selling, remortgaging or transferring equity in a home, we can help you find an expert conveyancing solicitor.

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Gaynor Haliday, Legal researcher

Author:
Gaynor Haliday, Legal researcher