UK: Removal Of Agricultural Occupancy Conditions: The Importance Of Marketing At A Realistic Price

Last Updated: 13 August 2018
Article by John Gregory

A recent appeal decision relating to the removal of an agricultural occupancy condition reflects the importance of ensuring that the asking price is realistic and that a proper marketing exercise is evidenced where this is a requirement of local planning policy.

Planning permission had been granted to build an agricultural worker's dwelling and garage which, for planning purposes, was located outside the development boundary and in open countryside. Accordingly, the permission was subject to a standard agricultural occupancy condition limiting occupation to persons solely or mainly employed in agriculture or forestry.

However, after marketing the property for over twelve months, with seventeen farms within a five-mile radius being contacted to ensure that the sale was brought to the attention of the local farming community, there were only three viewings and no formal offers. Therefore, the developer applied to have the occupancy condition removed. As is often the case, the local development plan permitted the removal of an occupancy condition only where it could be demonstrated that there was no existing or foreseeable need for the unit in the locality, and that there had been an independent market assessment following an unsuccessful attempt to market the property at a realistic price.

After reviewing the applicant's marketing report, the Council accepted that there was no longer a functional need for a rural worker's dwelling on the holding and confirmed that it had no concerns with either the duration or extent of the marketing. However, concerns were raised about the inclusion of nine acres of surrounding land within the area marketed for sale and the impact that this had had on the level of interest from those who might meet the agricultural occupancy criteria.

Decision

The inspector acknowledged that the £1.1m asking price was based on both the dwelling and nine acres of surrounding land. It was accepted that there were good commercial reasons for including surrounding land but there were no robust planning reasons which justified its inclusion. The value of the dwelling, by itself, was estimated to be £850,000-£900,000 (taking into account a 25% discount for the agricultural occupancy condition). The inspector concluded that the inclusion of the nine acres had inflated the asking price, which raised doubts about the robustness of the marketing exercise.

The appellant indicated that the discount applied to take account of the occupancy restriction was between 12% to 22%. The inspector considered that, even at the upper end of this range, this was lower than the generally accepted level of discount applied to properties with such occupancy restrictions and provided a further indication that the asking price may have been too high.

However, the Council accepted that, even without the nine acres of land, the property was likely to be too expensive for most rural workers and that the only class of people likely to satisfy the condition would be retired farmers with considerable financial resources.

The inspector considered that the lack of interest in purchasing the property was likely to reflect a lack of demand or need within the locality for this type of dwelling. He accepted that the condition would help maintain a supply of rural workers' dwellings in the area but considered its effectiveness in doing so was significantly limited and noted that there was no robust evidence which would indicate that there was any unmet need for a dwelling of this size and type in the locality.

In view of the lack of need or demand for a dwelling of this type, the inspector was satisfied that the condition was no longer reasonable or necessary and its removal would not conflict with local planning policy.

Comment

Because councils are usually reluctant to remove conditions restricting the occupation of dwellings to agricultural workers, owners will often try and avoid the need for an application by occupying the property in breach of the condition for ten years and applying for a certificate of lawfulness of existing use or development (CLEUD) to regularise the position.

However the CLEUD does not remove the occupancy condition; it simply confirms that it has become lawful to occupy the property in breach of the condition. This means that if, after grant of the CLEUD, somebody moves into the property who does comply with the condition then the condition will bite once again, and subsequent occupation by somebody not employed in agriculture would not be lawful (unless they also went on to establish 10 years' continuous occupation).

For this reason (as well as not having to wait ten years), it is often preferable to apply to remove the condition altogether rather than rely on a CLEUD. Where such an application is made, this decision reinforces the importance of being able to evidence a robust effort to market the property, whilst acknowledging that demand for these types of dwellings may be falling as rural workers who would normally be interested in acquiring them become less able to afford to do so.

Appeal Reference APP/PO119/W/18/3195171

Decision date: 5 June 2018

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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