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The Silent Revolution – Class E and property management

By Lorenzo Pandolfi BA (Hons) Msc (Hons)

Catching up with policy amendments, new legislation and updates from the courts has never been easy, but this summer even the most seasoned explorers of the town planning jungle have been put to test.

Within two months, the Government issued a “White Paper” setting out a radical vision for the future of the English town planning system, made three Statutory Instruments creating a wide range of new Permitted Development Rights and quietly removed several land use classes from the statutes, by merging them into the newly forged Use Class E.

It is difficult to judge which of these major changes would have the deeper impact on the day- to-day reality of the property industry, but many legal experts, professionals and consultants agree that the new Use Class E is the change that would certainly have the most immediate effect.

The vision set out in the “Planning for the Future” White Paper is bold, but it will not become reality anytime soon. The political and practical hurdles that some of its proposals need to jump are very high for it to have some direct effect on place-making before the end of this legislature (2024).

The new Permitted Development rights are very controversial and, albeit they can be effectively exercised now, they require a process that involves obtaining “Prior Approval” from the Council for the typologies of development now covered by the General Permitted Development Order. This means that, in practice, it is unlikely that any building work for new rooftop extensions or the wholesale demolition and rebuilding of flats will start on the ground before early 2021.

Class E is different. Class E is now.

From the 1st of September, as if a magic wand had swept through the whole surface of England, the buildings and land whose lawful uses were up to that date labelled as being in Class A, Class B1 or some sub-class of classes D1 and D2 all became Use Class E premises. In the process, several Use Classes were erased from the Use Class Order, and other new classes created (F1 and F2).

The full comparison between the old version of the Use Classes Order and the current version is set out in the table enclosed to this note.

So then, what are the actual changes? How will these changes affect the management of commercial properties from now on? And more importantly, what are the opportunities and challenges unlocked by Class E?

Let’s have a look at the details.

The facts The amendments to the Use Classes Order 1987 that came into force on 1 September 2020 have significantly changed the classification of land uses in England.

The most important changes relate to the removal of Class A, Class B1, Class D1 and Class D2 from the Use Classes Order, and the amalgamation of several superseded land use classifications into a single new use class, named Class E.

The new Class E “Commercial, Business and Service” includes the following uses:

  1. Retail, other than hot food;

  2. Food and drink;

  3. Professional Services (financial services; professional services (other than health or medical); other services which it is appropriate to provide in a commercial, business or service locality.

  4. Indoor sport, recreation or fitness (excluding motorised vehicles or firearms);

  5. Medical or health services, principally to visiting members of the public, except the use of premises attached to the residence of the consultant/practitioner;

  6. Creche, day nursery or day centre (excluding residential use);

  7. Employment that can be carried out in a residential area without detriment to amenity (offices; research and development; or light industry).

Opportunities The main consequence of amalgamating land uses that formerly had separate classifications is that, after 1 September 2020, the use of any land falling within Use Class E can be switched to one of the subclasses of Class E without the need to apply for planning permission, as changes within the same use class (excluding the Sui Generis class) do not amount to “development” for the purposes of Section 55 of the Town and Country Planning Act 1990. As specified in Paragraph 012 Reference ID: 13-012-20140306 of the Planning Practice Guidance,

“movement from one primary use to another within the same use class is not development, and does not require planning permission. The Commercial, Business and Service use class [i.e. Class E] provides for use, or part use, for all or any of the purposes set out in that Class”.

For example, in principle, a unit that up to the 31st of August 2020 was classified as being in Use Class A1 (Shop) or Use Class B1(a) (Office) is now de facto a Class E unit, and can accommodate activities that fall under any of the categories covered by Class E without the need to obtain planning permission.

Can I transform a 30-storey office tower into a huge gym tomorrow? Hold your breath. A legal challenge to the amendments to the Use Classes Order that came into force on 1 September 2020 will be heard by the High Court in October 2020. The legal challenge has been initiated by a community group and seeks a declaration of unlawfulness of the Statutory Instrument that amended the Use Classes Order.

Changing the use of a lawful Class E property into one of its sub-classes now could therefore pose a risk if the challenge will have impacts on the wording or scope of the Statutory Instrument that introduced the new Use Class, as a property might then be under a different use without the benefit of a planning permission.

It is however interesting to note that since early September some estates and companies that own or manage properties in Central London have already started to submit requests for Certificates of Lawfulness for existing or proposed use to obtain confirmation for the relevant Local Planning Authority that a certain building has a lawful Class E use and/or could be lawfully use for any of the activities listed in that class.

For the purposes of this note, we have assumed that the legal challenge to the amendments to the Use Classes Order would not succeed, and that the amendments to the Use Classes Order will remain unchanged. If, however, the legal challenge will succeed to any degree, and if the Use Classes Order will be amended again, we will update this note.

Challenges The significant flexibility afforded by the new Class E could be limited by the presence of planning conditions or obligations within an historic planning permission limiting the use of a property for a specific use under the old version of the Use Class Order. If, for example, an historic permission required such a property to be used solely for Class A1 or Class B1 purposes and for no other purpose, or if an extant planning condition removes the possibility of changing the land use of the site without explicit permission for the Local Authority, there will be an impediment to the full movement within Class E.

However, there would still be the possibility of requesting to the local planning authority the removal or variation of such restrictive planning conditions, as noted in the PPG at Paragraph 012b (Reference ID: 13-012b-20200918):

“The recent regulations do not override any existing planning conditions or planning obligation which specifically prohibits a new use. However, in considering an application for the discharge, modification or removal of conditions limiting changes of use within any of the expanded classes of use, the local planning authority should have regard to the new regulations and the advice in this guidance.”

Other factors unrelated to town planning legislation and development control that should be considered to evaluate the actual flexibility of a site which has a lawful Class E use can include:

  • Restrictive covenants between Freeholder and Leaseholder/Tenant;

  • Restrictive clauses in the Title of the land;

  • Licensing regulations;

  • Building regulations;

For these reasons, anybody who wishes to explore the development options afforded by Class E should consult our experienced team at Planning Collective, and also seek legal advice in relation to land law, conveyancing, safety and licensing matters.

Amendments to the Planning use classes order in England – Comparative Table (before and after 1 September 2020)

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