The London Borough of Wandsworth recently made the startling decision to use an Article 4 Direction to remove permitted development rights, to varying degrees, of 120 public houses in the borough.

The Direction is aimed at preventing the loss of public houses without planning applications being made for demolition, change of use or alteration. Affected owners can make representations objecting to the Direction, which has not yet been confirmed. There is a short window however; any such objections must be made by 12 September 2016.

Why is the move significant?

The move seems to be an attempt to be populist, (the Guardian ran an article on 17 August titled “Councils should protect pubs from developers, says CAMRA”), and taken as a direct consequence of lobbying by CAMRA.

This is significant because local communities already have the ability to group together into voluntary or community bodies to nominate public houses to a local authority’s list of assets of community value (ACVs), with the consequence that permitted development rights are removed.

However many communities have been lackadaisical in protecting their local pubs, so CAMRA head office and branches have stepped in to make community nominations, which have been intensely unpopular amongst pub owners.

The problems with further local government intervention

Parliament had already devolved power to local communities to allow them to protect their pubs themselves. The ACV regime provides a route to do so, even enabling community interest groups to bid for the ACV in the event of an intended relevant disposal. A clear right to claim compensation was also introduced, albeit there is no precedent yet established to recover diminution in value because of the listing or impact on proposed development.

But unwittingly what CAMRA and Wandsworth might have done is to bring forward intended development, and pass the risk of liability for a drop in value onto the Council, in a clearer way than under the ACV legislation. This is because if an application for planning permission is forced to be made for a development, which otherwise would have been permitted and deemed to have occurred, and that application is made within 12 months of the Article 4 direction, then the Council may be liable for diminution in value in the property – i.e. the uplift in value that would otherwise have been realised.

So CAMRA could be both accelerating change of use away from pub use, which would otherwise have been further away, and increasing the risk to a local authority if development is refused.

What should be done?

Where a wide area is covered by the Direction there must be a “particularly strong justification for the withdrawal of permitted development rights” (NPPF Planning Practice Guidance). This would seem questionable given the alternative method available to local communities (ie ACVs) to remove permitted development rights.

Affected pub owners may wish to consider objecting to any Article 4 Direction proposed to be made. Ultimately a Council could be held to account by judicial review of its decision to make an Article 4 Direction.

Freeths have advised a number of owners of public houses affected by individual Article 4 Directions, and are already advising in respect of the Article 4 Direction made by Wandsworth. If you are affected, or can contribute to a greater understanding of the wider picture of which this event is part, then we would be interested to speak to you.

Author: Mark Brown

Categories: Real estate, regulation


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