Last Tuesday, the High Court handed down its decision in R (Rights: Community: Action) v Secretary of State for Housing, Communities and Local Government  EWHC 3073 (Admin). This judicial review challenged regulations amending the Use Classes Order (UCO) (the UCO Amendment Regulations) which introduced a new, wide Use Class E (see our blog post of 13 August 2020), as well as two new residential permitted development rights. The judicial review was unsuccessful and the changes to the UCO have been upheld. However, this is not the end of the story. The claimant, Rights : Community : Action (RCA), have announced their intention to apply for permission to appeal the decision on one ground. We are therefore still in a position of uncertainty as to whether the changes to the UCO could ultimately be revoked if an appeal is successful. How long could this uncertainty last and what should owners, occupiers and developers do in the meantime?
It could take between one and six months for a decision on whether permission to appeal is granted. If permission is granted, it could take up to another year before the appeal is heard. If an appeal is successful, the UCO Amendment Regulations are likely to be quashed. Usually, a quashing order would have retrospective effect. This would have the effect that the UCO Amendment Regulations would be treated as though they had never been in force or had legal effect, and any change of use made in reliance on them would be unlawful. In limited circumstances, the Court of Appeal can consider quashing the regulations with prospective effect; however this would be unusual, and would be likely to happen only if requested by a party to the appeal who was able to demonstrate the prejudice to good administration or third parties that would be caused by retrospective quashing.
RCA’s decision to apply for permission to appeal is unhelpful for owners, occupiers, developers and landlords, who will now be considering whether to proceed on the basis that the UCO Amendment Regulations are lawful, or whether to exercise caution until the outcome of the application for permission to appeal, and potentially an appeal (if permission is granted), is known. This is because, if the regulations are quashed with retrospective effect, owners and operators who had implemented changes of use in reliance on them would find themselves in breach of planning law, making them vulnerable to enforcement action by local planning authorities (LPAs) and potentially putting them in breach of the terms of their leases. We have prepared a briefing for our clients which discusses the various options available – please contact us if you would like to receive a copy.
In short, for owners and occupiers, whether to proceed with the flexible changes of use offered by the new Use Classes will be a commercial decision to be taken in the particular circumstances of the property in question. Whilst, if the UCO Amendment Regulations are revoked retrospectively, an owner/occupier could be exposed to enforcement action by the LPA, in our view enforcement action would neither be proportionate nor expedient. We also think that an appeal is less likely to succeed in relation to the UCO Amendment Regulations than in relation to the other two regulations relating to permitted development rights. Finally, even if an appeal were successful, there does remain the possibility that any quashing order granted by the Court of Appeal could be made prospectively rather than retrospectively as explained above. As mentioned, whilst this would be an unusual step, prospective quashing would mean that any change of use made in accordance with the UCO Amendment Regulations between 1 September 2020 and the date of the Court of Appeal’s decision would remain lawful.
Pending a decision, is there any action that those who would like to rely on the changes to the UCO can take?
Owners/occupiers seeking greater comfort may consider making an application to the LPA for a certificate of lawfulness of existing use or development (CLEUD) under section 191 of the Town and Country Planning Act 1990 after the change of use has been instituted. Also, for the Court of Appeal to decide to quash the UCO Amendment Regulations prospectively, an industry or professional planning body, such as the British Property Federation or the Royal Town Planning Institute, would probably need to “intervene” (join) in the proceedings, to explain to the Court the public interest implications of retrospective quashing. Those with an interest in this may wish to get in touch with their industry/professional bodies to see whether this is something that they are currently considering.
The need for certainty
The UCO Amendment Regulations were passed with the intention of providing an immediate opportunity for high street property owners and occupiers across the country to find flexible ways to keep premises open and businesses operating throughout the Covid-19 pandemic and beyond. Many property owners and occupiers may already have relied in good faith upon the changes to the UCO introduced by the Amendment Regulations. Certainty on this is needed quickly if the changes to the UCO are to have the benefit that the government intended.