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Localism Act - implications for landowners

John Bowman


United Kingdom

Localism Act - implications for landowners

On 15 November 2011, the Localism Act 2011 received Royal Assent.  Its measures will begin to come into effect over the next few months.  While it is anticipated that a number of the key planning provisions will be in place by April 2012, it is possible that some of the provisions will never come into force.

The Localism Act has two key aims in terms of planning:

(a) Granting new rights and powers for local communities; and

(b) Reforming the planning system to make it clearer, more democratic and more effective.

We set out below a summary of our top three issues for commercial landowners:

1.    Community Right to Bid

This is a potentially dangerous new provision for all landowners and developers.  It is intended to help local communities to ensure that local facilities such as post offices, shops or pubs can survive.  Where land is deemed by the local authority as being of “community value”, the landowner will be prevented from disposing of that land without notifying the local authority that it wants to do so and giving a community group the opportunity to bid for the land.  At the very least, this will create huge potential for delay and interfere with private property rights.

Local authorities will have to maintain “lists of assets of community value” which specify land that is of community value.  Land will be of community value if its use (whether past, current or future) furthers social wellbeing or the social interests of the local community.

The local authority will decide whether to list an asset.  It will also have to consider nominations from the community.  A landowner whose land is thought suitable for inclusion on the list will have the opportunity to ask for a review of that decision, and to appeal if the review decision is unfavourable.  If included on the list, land will remain on it for 5 years.

If land is included on the list, its owner will not be able to dispose (transfer or the grant or assignment of a lease) of it unless three conditions are met (subject to a number of exceptions):-

(a) The owner has notified the local authority that it wishes to dispose of the land.

(b) Either the "interim moratorium period" (6 weeks) has ended without the owner having received a written request from a community interest group to be treated as a potential bidder or the “full moratorium period has ended” (6 months).

(c) The “protected period” (18 months) has not ended.

The details of how this provision will operate (in particular the meaning and consequences of the protected period, how a bidder is to be treated and the penalties for failing to comply) will be set out in Regulations which are not yet available.

Once these provisions come into force, it will be important for landowners to be aware of the progress of the list of assets of community value in their area and be prepared to make representations against inclusion on the list.

2.    New enforcement powers

Currently, where an enforcement notice is served by an authority, a landowner may apply for retrospective planning permission.  Once the relevant provision comes into force, a local authority will be able to decline to determine such retrospective applications.

Authorities will also have new powers to deal with concealed breaches outside of the current limitation periods. They may apply to the Magistrates for a "planning enforcement order" within 6 months of the evidence of the breach coming to the authority's attention. This evidence is conclusive in justifying their intentions to seek an order. Magistrates may make the order if they are satisfied that the breach has to any extent been deliberately concealed by any person and if it is just to do so. These tests are drafted widely.

The authority may then take enforcement action at any time within the enforcement year.  This new power will be of significant concern to buyers where historic breaches have occurred which are not apparent to the buyer and may not have been revealed to the local authority.  Whilst there is a provision enabling the local authority to confirm in writing that a person will not be prosecuted for the breach (such as a subsequent owner), this can be withdrawn at any time and the owner may still have to carry out works to rectify the breach. 

3.    Neighbourhood plans

Neighbourhood planning is designed to give local communities greater involvement in the plans and policies that affect development in their area.

A parish council, or (where there is no parish council) an organisation or body designated as a Neighbourhood Forum, may apply to the local planning authority to make a Neighbourhood Development Order (NDO) and a Neighbourhood Development Plan (NDP) in respect of their Neighbourhood Area.

If an area is wholly or predominately business in nature, a local authority can designate that area as a Business Area (as opposed to a Neighbourhood Area). 

In essence, a NDO grants planning permission for certain types of development in that area  (i.e. a development proposal that is in conformity with the NDO has planning permission automatically granted and there is no need for a planning application). 

A NDP will contain policies relating to development and land use in an area and forms part of the statutory development plan for an area together with the Local Plan.

Where there is no parish council, a body or organisation can be designated as a Neighbourhood Forum if they make an application to the authority and the authority agrees it is: 

  • established for the express purpose of furthering the social, economic and environmental well being of an area (the body can also be established for a commercial purpose) 
  • membership of the organisation or body is open to individuals living or wanting to live in that area or who work in that area 
  • at least 21 members of the organisation or body live or work in the area 
  • the organisation or body has a written constitution

Neighbourhood Development Plans

This is a plan which sets out policies (however expressed) in relation to the development and use of land in a particular Neighbourhood Area.   It must specify the period for which it is to have effect.  It may not make provision for excluded development (such as mineral development, waste or nationally significant infrastructure) nor relate to more than one Neighbourhood Area.  A NDP must be made if more than 50% of voters agree in a referendum.

The existence of a NDP should therefore increase certainty for developers. The idea is that developers will be able to approach neighbourhood communities with an offer of financial support to promote a neighbourhood plan which explicitly identifies a specific development proposal of the kind that the developer would wish to take forward.

  • The Government has released a list of pilot Neighbourhood Areas for draft Neighbourhood Plans and a number of other areas are starting work on such NDPs even before the provisions come into force.  The Government has also announced 8 Business Areas (South Bank, London; Trafford Park, Manchester; Aldershot town centre; inner Milton Keynes; Innovation Park, Liverpool; Bankside, London; Team Valley Trading Estate, Gateshead and the West End, London) where it is intended that business will lead the creation of the NDP.

If you have land or are planning to purchase land in a particular area, it would be advisable to be aware of the status of any Neighbourhood Plan and join the relevant Neighbourhood Forum.

Please get in touch if you would like to discuss how the Localism Act might affect you. 

Article by John Bowman, Partner and Claire Brodrick, Associate in the Planning and Environment team at Fieldfisher.

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