Commercial tenants beware – planning permissions may restrict how you can use your premises!
Oliver Bussell considers the dangers of taking a lease where the permitted use of land is not clear.
If you are a looking to become a tenant of commercial property beware of the grey area between what your lease says you can do with it – and what planning permission has been granted. If you simply rely on your lease as a guide to how you can or can’t use your commercial premises you could still breach planning permissions. That could result in enforcement by the council which could result in business disruption and serious financial consequences for your business.
So what should you look out for?
Ideally get hold of a recent planning permission referring the exact premises address and granting consent for the use you want.
But what if there is no planning permission? The landlord just states, “the tenant must rely on its own enquiries”! So what next?
It is sensible to press a landlord or agents for as much further information as possible to establish whether there is a breach of planning control. That is a fact and degree question but the following may all be relevant or helpful:
- Are the premises vacant?
- How long was the previous tenant in for?
- Was the previous tenant in the same line of business as the proposed tenant?
- Is there any suggestion of a breach of development control showing on the local authority CON 29 replies?
- Have the agents got anything they can bring to give comfort?
- Has the client who will probably have made a site visit got any knowledge they can volunteer?
If no comfort can be provided here, is the agreed rent really reflective of the user the landlord is claiming for the premises? Reducing the rent is a whole different subject but I have ended up negotiating solutions for tenant clients in these circumstances which did fundamentally alter the heads of terms while keeping the deal alive and giving the tenant comfort.
- Obtaining a statutory declaration from someone with first hand knowledge attesting to the long user of the premises. That can be kept in reserve and would back up an application for a certificate of lawfulness (“CLEUD”) at any point in the future
- Obtaining an a CLEUD as a precondition to taking the lease
- One client secured an exit route if any enforcement action is attempted by the council with a three month tenant-only rolling break clause.
None of these solutions is perfect. And each solution in turn comes with its own implications or problems. The important thing is to get sufficient comfort – however much of a commercial risk the problem is thought to be.