Purchasing property with outstanding Community Infrastructure Levies (CILs)

BonaDea

Re the perplexity over why the outstanding liability might be only £5K for two flats:

1 Could it be that reliefs were granted? Were the flats social housing, something to do with a charity, or the builder claimed them as 'self-builds'?

2. In this process there's a difference between 'assuming liability' - i.e. identifying oneself to the Council as the entity upon whom liability falls - and actually paying the sums that one is liable for.  'Assuming liability' early on in the development is incentivised e.g.by being able to pay in instalments.  Perhaps the developer did assume liability, and has paid some/much of what was owed, leaving a small (£5K) amount outstanding?

Melmoth71

@BonaDea No idea whether reliefs were granted- The flats were not social housing or self-builds, and I doubt they had anything to do with a charity. Yes it is possible that the developer paid part of the CIL and left some amount unpaid, that would explain the low outstanding amount for the known CIL.

Update: Things got even stranger when my solicitors told me that, in their legal view, the liability for ANY unpaid CIL/s applies to the whole 'site', in this case meaning the building where all these planning consents were granted, even if they were for different developments with different developers and a different CIL attached to each planning consent.

This means that if any of these levies remains unpaid and the council has no way to recover the owed amount from the party that should have paid it originally (the developer/landlord), CIL regulations allow the council to pass on the liability to all parties 'with a material interest in the land', that is, all the leaseholders in the building (even if their leaseholds are unconnected to the development that the unpaid CIL is tied to).

So if a purchaser buys a leasehold flat in a building, and there is an unpaid CIL from a different development in a separate bit of the building, the council might, theoretically, slap ALL leaseholds in the building with a proportional part of that CIL (apportionment is proportional to the market value of each leasehold), provided the council has exhausted all other ways to recover the CIL. This seems unfair and counterintuitive, but, according to my solicitors, it’s allowed by CIL regulations.

My solicitors also said that the risk from an unpaid CIL CANNOT be covered by indemnity insurance.

Another weird turn happened when the council CIL team told my sellers that they had removed the pending liabilities from all unpaid CILs except for one, and consolidated all owed amounts into that one charge that they applied to one of the planning consents (19/03017/FUL). No idea how they did this as the original CILs were attached to different planning consents and CIL regulations say nothing about transferring liabilities between CILs. The council say they have identified the liable party (a developer which may be tied to the building’s landlord), have charged them, and have no intention of passing the liability on to the leaseholders (even though legally they still could in the future). The sellers got the developer to more or less admit (again, no definite proof) that they have been charged with the liability and obtained a paying schedule that would put the total unpaid amount at around £25,000. The sellers also confirmed that the developer for their flat (not the developer now charged by the council) DID pay their CIL and actually the planning consent for their development appears on the council records as paid in full.

So with all that information, I decided to go ahead with the purchase and have now completed.

I’m sharing all this info in case it’s useful to anyone struggling with a similar issue. When I completed, the estate agent said that there are a number of purchases in the area affected by unpaid CILs so it looks like a real issue.

CIL regulations in full here: The Community Infrastructure Levy Regulations 2010. Part 4 deals with liability and default on liability.