The rule effectively states that local authorities may not serve enforcement notices for an unauthorised development after seven years since the commencement of the development. The best way to describe this is that whilst proceedings cannot be taken regarding the development, it is still a blip on title as the proper planning permission was not obtained.
What is the 'seven year rule' regarding development when a property is being sold?
The 'seven year rule', as it is often called, is a principle in planning and development which can be used in some cases where planning permission has not been obtained and a property is being sold.
Often a purchaser will be happy to hear that this rule exists however, before doing so, we always advise that it is important to understand the implications of it in full, including its limitations.
What is the 'seven year rule'?
The rule is based upon Section 157(4) of the Planning and Development Act 2000, which effectively states that local authorities may not serve enforcement notices for an unauthorised development after seven years since the commencement of the development. This means that if there is unauthorised development to a property such as a conversion, extension, shed or similar works and 7 years have passed since these works were carried out, then the local authority cannot attend on site to take enforcement action.
Does this mean planning is granted?
In short no. The rule means that the local authority does not have the right to take proceedings however the development is still unauthorised.
What does this mean regarding title?
The best way to describe this is that whilst proceedings cannot be taken regarding the development, it is still a blip on title as the proper planning permission was not obtained.
Will the bank still lend?
Your solicitor has to undertake to the bank that there are no issues with title. In the case where this rule applies, they will have to contact the bank to qualify title. This means that they notify the bank that there is an issue and the bank will make a decision on whether they are happy to lend.
Generally speaking (but definitely not always the case), a bank will accept a qualification on title once there is a declaration being furnished or an architects certificate being furnished to confirm the 7 year rule applies and that the local authority have not ever issued any notice or tried to bring proceedings during that timeframe.
Issues to be aware of?
A few issues to be aware of:
Section 157(4)(b) of the 2000 Act, which states that enforcement can still be taken after seven years if a person has failed to satisfy a planning condition concerning the use of the land.
CPOs – Under a compulsory purchaser order ,compensation will not take into consideration the value attributable to a property due to any unauthorised development.
Building regulations – Whilst the using planning permission was not obtained and a 7 year rule can apply, an architect should still confirm that the development complies with building regulations. Often this can be overlooked.
Future sales – when you go to sell, this will again arise with a purchaser. Depending on the market and indeed banks views at the time, this can have an effect on resale value or indeed the ability to resell.