The Law Society is warning that changes proposed in the new Localism Bill could bring uncertainty and chaos to the property market.
The Bill proposes changes to the planning system including strengthening authorities’ powers to tackle abuses of the system. The Bill will allow local planning authorities to pursue a planning enforcement order at any time after it becomes aware that there has been a breach of planning control and requiring a property owner to remedy that breach.
Law Society President Linda Lee said the new regime could create uncertainty for the buyers of both residential and commercial property when they cannot establish whether previous owners have concealed a breach of planning control as they themselves could become liable to enforcement action for that breach at any point in the future. If the buyer discovers a concealed breach and then fails to report it, they will be concealing it themselves.
'These reforms could have a serious effect on both the residential and commercial property markets, where innocent purchasers could become liable for the actions of a previous owner.
'This could lead to purchasers demanding that every breach of planning control is remedied or that the price is abated for the risk. It also could delay transactions while enquiries are being made about the planning status of a property. It increases the level of due diligence buyers would need to do, as there will no longer be a cut-off date. This could involve buyers incurring considerable expense. It could even necessitate taking out insurance against any unknown potential liability.
'While aimed at the fraudulent and blatant cheats, the provisions are drawn so widely that they will catch anything which has not been expressly pointed out to the planning authority. Establishing deliberate concealment is not straightforward. The new provision is unnecessary – the two cases which have led to these proposals are highly unusual and bizarre.
Our Residential property Team will be monitoring these proposals and will ensure that you are fully aware of the implications for your new house purchase