Why business owners should pay attention to property use classes

Finding the perfect place to buy or lease in Cardiff or Bristol for your business can take time. You know you need to check the location, cost, condition, frontage, floor space, universal access, car parking or transport access, on-site facilities, and general fit-out – but did you also know that you need to check what use class the space has?

This may be a curveball for business owners who feel they’ve done their depths of research and everything, except for the class of use, is a perfect fit. It doesn’t mean it’s the end of the road, though, and that you need to start flipping through the classifieds again. In this article, we explain what you need to know about use classes, when you do and don’t need to seek planning permission, and how your ‘perfect find’ may still be just that.

What is a use class?

A use class is a way of categorising what activities can take place within a place of business. These categories are broad so that they can encompass the equally broad range of businesses on the market, including professional services, takeaway shops, retail, manufacturers, leisure centres, hotels and everything in between. The classes of use are defined within groups as set out in The Town and Country Planning (Use Classes) Order 1987. Within the schedule of this order, there are 15 different use classes for commercial properties, which we’ve listed below.

Class A

  • A1 Shops
  • A2 Financial and professional services
  • A3 Restaurants and cafes
  • A4 Drinking establishments
  • A5 Hot food takeaways

Class B

  • B1 Business
  • B2 General Industrial
  • B8 Storage or Distribution

Class C

  • C1 Hotels
  • C2 Residential institutions
  • C2A Secure residential institutions
  • C3 Dwelling houses
  • C4 Small houses in multiple occupation

Class D

  • D1 Non-residential institutions
  • D2 Assembly and leisure

Before you commit to buying or leasing a commercial property, check which use class it has and whether it aligns with the business you intend to perform in the space.

When you won’t need planning permission

The good news is that you won’t need to seek planning permission if you are looking to use the space for a different activity, so long as that activity is within the same use class and there are no major development works needed. This broad permission is set out in section 57(1) of The Town and Country Planning (General Permitted Development) (England) Order 2015 (GPDO). For example, you will not need to seek planning permission if you have a café (use class A3), but you’d like to start offering more formal dining as part of a business plan to transition into a restaurant (also use class A3).

When you will need planning permission (and how to get it)

You might be lucky enough to have a clear vision; you’ve come across a space that speaks volumes of potential and you can so vividly see how you’d like to transform it to suit your business. Before you move in and start trading or don the safety glasses and fire up the jackhammer, note that you’ll need to seek planning permission from your local authority to:

  • Do business that falls into a different class use; or
  • Undertake building works.

Changing use classes

It’s firstly worthwhile checking if changes are permitted, under the General Permitted Development Order 1995, without needing formal permission. For example, changes between certain use classes are permitted as long as they are temporary changes (up to a maximum of two years). If, after seeking legal advice, you’re sure that planning permission is required, you can put in a request to your local authority under one of two processes.

If you:

  • Need a fast and immediate decision, which may require subsequent approvals further down the line: complete an ‘Outline Planning Permission Application’.
  • Have more time and want a one-step process: complete a ‘Full Planning Permission Application’.

As a rough guideline, you can expect to have a decision on your planning application within eight weeks but may need to wait longer if you have a large or more complex application. The price of an application depends on the type and size of your site, so check your local authority website for accurate details.

Our commercial property team are well-versed in planning applications and can walk you through the process and advise on the complicated rules surrounding change of use classes.

Undertaking development works

Business owners can also look to the General Permitted Development Order 1995 when working out whether any physical changes can be made to the building without requiring formal planning permission. The compliance requirements for commercial buildings are much higher for residential buildings and so it’s worthwhile getting legal advice if there is any doubt.

Some examples of ‘permitted developments’ that do not require planning permission include:

  • Industrial and warehouse extensions
  • The addition of fixed property and machinery
  • Office building extensions up to 25% or 50m2 (whichever is the lesser amount)
  • Changes to buildings used for catering, financial or professional services that are similar to office changes

Lessees beware!

It is not uncommon for lessors (landlords) to include provisions in a rental contract that restricts the type of activities that can take place in their property to a particular use.

If you decide to go against the contract, either purposefully or because you didn’t realise this restriction was in place, then there may be financial consequences. A covenant may be in place, for example, that grants the owner rights to be compensated if their property is now worth less because of any changes you’ve made to accommodate the different use.

If, however, you did dutifully check the fine-print, are aware of any such clause and so want to broach the topic with your landlord, be aware that they are under no obligation to grant you permission to make any changes.

So, the moral of the story is that it pays to be fully aware of the different use classes and what activities you’d like to use the space for well before committing to a lease.

Note: If you’re a landlord, be particularly careful when considering a change of use request from a tenant as once planning permission is granted, the decision cannot be reversed.  

Always get legal advice first

To ensure you can find a building that is completely fit-for-purpose for your business needs, and of course to ensure you’re not breaking the law, it is always advisable to get tailored legal advice. Our commercial solicitors are specialists in negotiating on behalf of tenants or landlords, completing planning permission applications, and providing advice on all the compliance requirements that come with a change of use classes.

To speak with one of our property solicitors about your business space needs, call us on 02920 093600.

 

Posted by on

Add Your Comments

Top