If no indemnity, am i liable if council serve enforcement notice?

katie2ok

Pls help! Having read some previous threads on this subject I'm convinced I've made a terrible and potentially crippling mistake concerning a flat I'm trying to sell which i bought last year without planning permission & have just had a Lawful Use application refused by the Council...

The background is lengthy as you'll see the issue is complicated.

I bought a freehold house in Hackney, London which had received planning permission in 1998 for use as a 1bed flat at 1st floor and use as an education centre (D1 class) at ground floor. I was aware that the education centre failed as a business shortly afterwards and that the owners 'unofficially' converted it into a residential 1 bed flat (no permission or building regs certificate) and 'unofficially' let it out (no rental/bills/c-tax records) up until i bought it last year.

I went ahead with the purchase thinking there would be 'other' evidence I could gather as my intention was to live on the 1st floor and sell the ground flat. With this in mind, I did some alterations & refurbishment to the ground floor and applied for a building certificate (in progress) and believed I needed a corresponding Lawful use certificate confirming its residential use – I did this and although I supplied a letter by the previous owners declaring the conversion in 2001/ presence of tenants, and letters from 3 neighbours confirming this the Council refused the application in May as the property was still registered for business rates and not on any council tax records (i have now had this amended but only from date of my purchase last yr).

My dilema is 1) will the council likely issue an enforcement notice due to their Lawful use refusal 2) if an indemnity was taken by the previous sellers would it cover this 3) if no indemnity (likely!) am i liable for the full conversion done in 2001 or just the alterations/refurbishment i did in 2006 4) i have a prospective buyer which i might lose given these issues - would you pull out if in same situation??

This is why i cant get to sleep!! I would appreciate any advice/suggestions any1 may have 4my predicament!! Solicitors involved to date r useless!Thanks in advance.

Doozergirl

I can't really answer too many of your questions in detail but if there is an indemnity policiy (which you solicitor would have requested on your behalf and you should know about) then I believe it would be void if contacted the council abot the work as you would therefore be inviting tohem to come and see what had been done.

I should think that the building works would be fine (there's no reason why a business can't have a kitchen and bathroom - they often do) but you obviously have a problem with it not having residential status.

I think you will have to apply for full planning permission for change of use. Without it, I would not buy your flat - in fact, you may need a cash buyer probably as you won't be able to raise a residential mortgage on what will be classified as commercial premises.

ou must have known the risks when you bought it

Debt_Free_Chick

applied for a building certificate (in progress) and believed I needed a corresponding Lawful use certificate confirming its residential use – I did this and although I supplied a letter by the previous owners declaring the conversion in 2001/ presence of tenants, and letters from 3 neighbours confirming this the Council refused the application in May

Oh dear..... Katie2OK you applied for the Lawful Use Certificate too soon. It needs 10 years continuous use in order to give the Council no grounds to refuse you.

You will now need to go through the full planning permission & change of use process.

To answer your specific questions

My dilema is 1) will the council likely issue an enforcement notice due to their Lawful use refusal

I would be amazed if they didn't take some action as they now know the use is unlawful. However, they may not necessarily just issue an enforcement notice - they may simply invite you to apply for PP and CoU. You should discuss this with them and see if they will indicate, off the record, whether you stand a chance of succeeding.

2) if an indemnity was taken by the previous sellers would it cover this

Doubtful if the policy was not transferred to you as you would not be not covered under the policy

3) if no indemnity (likely!) am i liable for the full conversion done in 2001 or just the alterations/refurbishment i did in 2006

Not sure what you mean here, but the property has no permission for use as a residential dwelling. It only has D1 class commercial use, so it cannot be used as a residence. If you don't succeed in the PP and CoU, it will have to be returned to a state that's suitable for D1 use, so you will have work to do to rip out the "residential" layout & fittings.

If you do get the permissions, I'm pretty sure you will need to comply with all the requirements for PP and Building Regs as at the date of application - so you may have more work to do to get the flat "lawfully habitable".

4) i have a prospective buyer which i might lose given these issues - would you pull out if in same situation??

Forget it - you ain't gonna sell it without the residential use sorted. The unlawful use, refusal for a certificate of Lawful Use and any enforcement action will come through on the searches that the buyer's solicitor gets. The solicitor will advise their client to "walk away".

Did you take no advice on this situation before you bought? What did your solicitor say to you?

BobProperty

Just to add to what DFC and Doozer have said, I guess you bought this cash or with some sort of personal loan because, unless your buyer also has cash, no-one will lend on this property with this situation outstanding.

Richard_Webster

You have to draw a distinction between whether enforcement action will be taken and whether you can sell the property. A lawful use certificate may be refused on the grounds that you haven't proved the case, but there would be different considerations if you applied for retrospective planning permission.

My guess would be that the Council wouldn't take enforcement action because you could appeal on the basis that planning permission ought to be granted. You could try applying for retrospective planning permission and if necessary, going to appeal. Unless there is some good planing reason why a residential use would be refused, I can't really see how a ministry inspector would be very sympathetic to the Council.

However different kettle of fish to sell. Buyer's solicitor will not be interested in protestations about how you could get planning permission etc - he will actually want to see it or a lawful use certificate!