COVID-19 and planning permission issues for developers

The immediate impact of COVID-19 and the measures implemented by employers and others to minimise the risk of transmitting the virus will inevitably impact on the planning system and have consequential impacts on the commercial arrangements of developers, occupiers, funders and investors. Below we have set out some of the key issues and actions.

Some measures which are being introduced at short notice such as temporary permitted development rights for the change of use from restaurants (A3) or drinking establishments (A4) to hot food takeaways (A5), and advice to local planning authorities to relax planning conditions which limit opening and delivery times for shops may go some way to mitigating the impact of COVID-19 on businesses.

Planning committees suspended because of the outbreak

Issue: Many local authorities have suspended Planning Committees which could delay the determination of planning applications.

Action: Where obtaining a planning permission is time sensitive, for example where a developer is subject to a long stop date in a planning conditional agreement or where an occupier is waiting to take occupation, it will be important to engage with planning officers as soon as possible to understand what alternative measures the local authority will put in place to determine applications.

Reduced resource available to process planning applications

Issue: The time and resources available to process planning applications may be significantly diminished and may prevent site visits and other key procedural steps from being carried out.

Action: As above this may have an implication on planning conditional agreements and occupations. It may be appropriate to negotiate a Planning Performance Agreement with a local planning authority in which such matters can be addressed through other means, including a local planning authority drawing on private sector resources paid for by applicants.

Negotiating agreements and discharging conditions and obligations

Issue: The above also has an implication for the discharge of conditions and obligations and negotiation of Section 106 and other infrastructure agreements. 

Action: It will be important for developers to consider bringing forward their programmes for discharging conditions and obligations, particularly pre-commencement conditions where planning permissions are due to expire.

Inquiries and hearings suspended by Planning Inspectorate

Issue: The Planning Inspectorate has suspended inquiries and hearings, including for Nationally Significant Infrastructure Projects, and is working out a process for rescheduling these as online processes.

Action: Although the Planning Inspectorate is seeking to deal with matters through technological solutions, there may be substantial delays to hearings, inquiries, site visits and examinations.

Court time limits

Issue: If you are looking at any legal challenges to planning decisions you will need to give ample time to produce claim bundles and arrange filing of a claim if you will be reliant on a process server. You cannot rely on the Courts agreeing to accept any out of time claims.

Action: Resourcing a team of people who can pull together a claim, file it and serve it will be important. It will be particularly important to agree service of documents by email where possible.

Delays to compulsory purchase and claims

Issue: Any compulsory purchase applications or compensation claims could be delayed, making for longer term uncertainty.

Action: Until alternative means of staffing matters and holding inquiries is determined by the relevant Government departments, there will be a delay in dealing with and determining matters.

Long stop dates in planning conditional agreements

Issue: If you have planning conditional agreements subject to relatively short long stop dates it may be appropriate to renegotiate those dates. Obviously, this may present a party wanting to exit a position with an ideal opportunity to do so particularly in an uncertain market.      

Action: Understanding contractual obligations and tactically how variations to arrangements can be agreed will be crucial to such matters.

Expiring planning permissions

Issue: Where clients have planning permissions that have not yet been implemented and may soon expire they will need to consider sooner rather than later how they will address this. There is currently no mechanism for extending planning permissions. Ample time will have to be given to discharge pre-commencement conditions.

Action: Implementation may also trigger the payment of CIL or Section 106 contributions so it may be necessary to renegotiate the triggers in Section 106 agreements and to discuss with local authorities if they will agree to accept staged payment of CIL or to consider whether the permission can be amended so that it is implemented in phases. Each phase will be a separate chargeable development for CIL purposes and this may improve cashflow.         

Reviewing programmes for discharge of conditions and obligations will be important, and contacting local authorities to agree how matters will be dealt with to give the greatest certainty that urgent matters will be prioritised will be critical.

Exceptional circumstance relief for CIL during the outbreak

Issue: A number of local authorities have made exceptional circumstances relief for CIL available in their areas.  A claim for relief can be made at any time before a commencement of development.  You may wish to consider whether the relief is available and if so whether your development may meet the conditions necessary to secure relief for all or part of the CIL due.               

Action: Addressing the payment of CIL either through formal arrangement or informal agreements with charging authorities at the earliest opportunity will be necessary to mitigate the impact of CIL liability.

Section 106 obligations and unviable developments

Issue: Some developments may soon be unviable and it may be necessary to renegotiate Section 106 obligations either to waive obligations or to introduce a viability mechanism to allow for reassessment prior to implementation.  

Action: It is advisable for developers to consider at an early stage the extent to which viability is likely to be an issue. Residential and commercial development proposals are most likely to be affected by a fall in the market, so anticipating the need to renegotiate, particularly for partly complete developments and being prepared to provide an open book assessment will be essential to mitigating the impact of market changes.

Planning issues delaying drawdown of a lending facility

Issue: Where discharge of planning conditions and Section 106 obligations is a condition precedent of drawdown on a facility, a suitable lead-in time will be necessary to ensure that any delays in the planning process do not delay drawdown.          

Action: As above, programmes for the discharge of conditions and obligations may need to be revised and brought forward and where appropriate Planning Performance Agreements entered into for the delivery of services.

Agreeing to statutory target determination date extensions

Issue: Local authorities may ask you to agree extensions to the statutory target determination date.  You should bear in mind that agreeing to any extension will result in losing the right, under the Planning Guarantee, to a refund of the application fee if no decision has been made after 26 weeks.               

Action: This is a tactical issue for developers. For those who are pursuing applications for developments that no longer align with the market, it may be beneficial not to agree extensions of time, although that may incentivise a local to refuse a planning application before the end of the 26 week period.

Whilst we are in uncharted waters with the coronavirus, Foot Anstey's Planning and Environment team does have a long history of working through these sorts of issues in periods of great disruption. We can help you negotiate with local authorities and planning bodies if you need us to – please do contact me if you'd like our help with a problem.