A recent decision published by the Valuation Office Agency (VOA) provides a reminder to all developers not to demolish a building before planning permission is granted. Why not?
- It affects the amount of CIL that is payable, and
- It could mean any exemptions (if applicable) are void.
In this case, a developer had submitted a planning application for a “Replacement dwelling including the demolition of the existing bungalow, demolition of the existing garage and associated landscaping of the main garden and rear parking area”. However, before the permission was granted, the developer had started to demolish the dwelling.
When the Council issued a CIL Liability notice, it imposed surcharges for failure to assume liability and failure to submit a commencement notice. The Council also informed the developer that they were unable to use the existing floor space to set off against the new floor space as the building has to be in existence on the day that planning permission is granted. As the building had been demolished, the Council was of the view that there was no existing floor space that could be used to offset against the new floor area and thus the full amount of CIL was payable plus surcharges, as the development had commenced before the planning permission was granted.
The developer appealed under Regulation 114 to the VOA. The VOA considered the issue of “in-use buildings”. The Council was of the view that almost total demolition of the original building had taken place. The developer argued that the elements that remained (foundation, joist, etc.) met the definition of “building” in the Town and Country Planning Act and therefore constituted an in-use building for the purposes of CIL. However, the definitions in the Planning Act are not applicable for CIL purposes, being specifically excluded from Part 11 of the Planning Act 2008. Thus the dictionary definition of “building” had to be used. The VOA, therefore, considered that the Council was correct not to make a deduction for the area for the original building and dismissed the appeal.
This decision is a helpful reminder to developers of the consequences of commencing building works before planning permission is granted and the effect this has on the amount of CIL that is payable.