internal wall removal and CIL tax

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MicoMarmoset
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Joined: Sun May 12, 2019 5:30 pm

internal wall removal and CIL tax

Post by MicoMarmoset » Sun May 12, 2019 7:32 pm

Hi there

I am new to this forum and am hoping to reach someone called Pilman who, I've been told by another Garden Law Discussion user, has excellent knowledge about property law.

Six years ago I purchased two flats with the intention of living in one and renting out the other. Long story short, but unexpected life events meant I had to convert the flats into one house very quickly. I brought in a structural surveyor and a builder and bashed out the internal wall that separated the two flats. I did this without planning permission. There was nothing sneaky about this - I simply didn't think to do it because my mind was elsewhere.

I rang the council on several occasions to sort out the change of council tax band from two flats into one house. I also asked another department to delete the address of the downstairs flat as we were now one house. I did not add to the square footage, nor do anything major other than bash out the internal wall and re-do the kitchen downstairs.

Now I've been warned by an architect that I could face a fine of £32,000 under the Community Infrastructure Levy (CIL) because I failed to get planning permission. I've read up about the CIL tax and can't see how it applies to my situation. But I'm in a dilemma.

Does anyone on here - especially Pilman - know anything about this area?

Thanks in advance

Mico-Marmoset

pilman
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Re: internal wall removal and CIL tax

Post by pilman » Mon May 20, 2019 2:23 pm

A change from two flats into one house is immune from enforcement action after 4 years, which means it then becomes lawful under planning law.

Normally when one buys a flat that is normally a case whereby each flat is a leasehold title with another superior freehold title also in existence. I would have been more concerned to know if that was the case with these two flats rather than what is the planning requirements for converting into a single dwelling.

I also cannot believe that an operational development that created a single dwelling within an existing shell of a building is liable to CIL.

The concept of CIL is to raise money for the local planning authority to spend on updating things like infrastructure and school provision when a new house is erected in its area.

What has happened here is that two flats have become one house, so I cannot see how a CIL is appropriate to that change from two dwellings to one single dwelling.

Now that I am retired and not undertaking planning applications on a regular basis I have very little experience of how local planning authorities deal with the Community Infrastructure Levy so I started looking on this web-site for further information.

I suggest that this is what the poster needs to read to to fully understand whether he is liable for anything.
https://www.gov.uk/guidance/community-i ... troduction

It does contain the words "net additional development" when discussing levy rates, so if there was no real change in the amount of space used for residential purposes, it would seem that there has been no additional development.
That is what I would seek to argue if I was ever to be involved in such a scenario as has been explained in this posting.

MicoMarmoset
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Joined: Sun May 12, 2019 5:30 pm

Re: internal wall removal and CIL tax

Post by MicoMarmoset » Mon May 20, 2019 8:51 pm

Thank you so much for your reply Pilman and for the further info link.

I think there are two leaseholds in existence for each of the flats that were here, and one freehold title. I need to contact Land Registry to confirm this and then somehow get this put right. Do you know if I would need retrospective planning permission in order to get the leases changed?

Do you think my best course of action would be to write to the planning department and explain this oversight?

Thank you again for taking the time to share your knowledge.

Mico

Collaborate
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Re: internal wall removal and CIL tax

Post by Collaborate » Mon May 20, 2019 10:38 pm

Merging leasehold with freehold is not planning matter. Think about it.

pilman
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Re: internal wall removal and CIL tax

Post by pilman » Tue May 21, 2019 1:29 pm

Each lease will have been drafted to confirm what was demised by each lease and what was retained within the ownership of the Lessor who retained the freehold title.

Any change to a leasehold property will normally require permission granted by the Freeholder and a breach of a lease can result in serious legal consequences, which could even include an attempt to recover possession of the property.

That is probably quite an extreme example of why all changes to a leasehold property needs permission, which seems not to be the case being posted about here.

The first thing to be done is to carefully read each of the leases that were granted for the two flats, then make a decision as to how best to approach the Freeholder to resolve what is currently an unlawful use of the two leasehold properties.

That may be when seeking legal advice is the most sensible thing to do, because this seems to be more of a problem than the planning matter initially posted about.

A breach of planning control can result in the local planning authority issuing an enforcement notice within four years of the change from two dwellings to one single dwelling, which will require action to be taken to comply with the requirements of any such enforcement notice.
Only if an enforcement notice is not complied with can the LPA begin legal proceedings to resolve the situation.

A breach of a lease condition is much more serious, because the Landlord can immediately start legal proceedings to recover his property due to the breach of a condition imposed in a legal deed, which is what a lease is.

Sometimes when a property is converted into separate flats, when each flat is sold as a leasehold title a share of the freehold is transferred to each flat owner, so that there is then a new joint Freeholder named as the two owners of the flats.

If that was what happened with the flats that you now own, then there is no problem, because you may now be the Freeholder as well as the Leaseholder.

if there is still a separate Freeholder, then what you have done is a breach of each of the leases and this then becomes a different type of legal problem than the planning matter originally posted about.

There is no need to contact Land Registry, other than by logging on to its web-site where it will be possible using a credit or debit card to buy a copy of the register of title for the Freehold at a cost of £3.
https://eservices.landregistry.gov.uk/e ... iryInit.do

A pdf file can be downloaded once the fee of £3 is paid and then you will be able to see who is shown as the current owner of the Freehold title.

This is the person you will need to deal with to resolve the legal situation you have created by altering the two flats without the Landlord's permission.

This is more important that worrying about the CIL situation because the breach of planning control resulted in a single dwelling being created from the two previously in existence.

MicoMarmoset
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Joined: Sun May 12, 2019 5:30 pm

Re: internal wall removal and CIL tax

Post by MicoMarmoset » Tue May 21, 2019 2:31 pm

I can't thank you enough Pilman. I do own the freehold and the leasehold so that shouldn't be too complicated to put right.

Your expertise has been valuable.

Thank you.

MM

pilman
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Re: internal wall removal and CIL tax

Post by pilman » Tue May 21, 2019 3:03 pm

You can continue to own all three legal titles if you choose to do so, in case you decide in the future to restore the two flats and want to dispose of each of them with its separate existing title.

The alternative is to apply to Land Registry to have both leasehold titles extinguished, so that only the freehold title remains in existence with you shown as the registered proprietor.

If you did that then it would be sensible to show the current postal address on the register of title if that is not already shown correctly.

MicoMarmoset
Posts: 5
Joined: Sun May 12, 2019 5:30 pm

Re: internal wall removal and CIL tax

Post by MicoMarmoset » Mon Jul 15, 2019 11:57 pm

Hi Pilman - sorry I’ve only just seen this post from you.

Do you know in order to put this right insofar as the leases go, would I only need to take the action you have listed above (contact Land Registry to extinguish the two leasehold titles into one with me as the freehold proprietor) and not need to involve the local authority?

Thanks again
MM

pilman
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Re: internal wall removal and CIL tax

Post by pilman » Wed Jul 17, 2019 5:02 pm

Land registration will need to be with Land Registry only.

Then you can decide how to inform local council re council tax bills, which really ought to be changed from 2 flats having separate rating bands to 1 house with a single rating band allocated to it.

MicoMarmoset
Posts: 5
Joined: Sun May 12, 2019 5:30 pm

Re: internal wall removal and CIL tax

Post by MicoMarmoset » Mon Jul 22, 2019 1:42 pm

Thanks so much Pilman. I have already notified the council of this 5 or 6 years ago.

This information has been so useful. I had no idea who to ask.

Thank you again.

MM

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