Recent CIL appeal acts as reminder that obligation to pay CIL can be triggered by demolition

Background to the appeal 

The Developer was granted planning permission for “four apartments and pub/restaurant with associated bin/cycle store and parking and three and five-bedroom detached dwellings with parking following demolition of the existing building”.  

The Developer started the demolition works on the existing building believing that until it started work on the construction element of the development began CIL was not triggered.

Although the Developer did not consider the start of the demolition works to be the commencement date for CIL purposes, the Council did. The Council issued the Developer with a CIL Demand Notice with a deemed commencement date (being the date that demolition works began) and surcharges for their failure to assume liability, to submit a Commencement Notice before starting works.

The Developer appealed the Council’s demand on the basis that they had not started the works for CIL purposes. They referred to the planning permission approval which did not include the demolition and argued that the works on the chargeable development could only be deemed to have commenced once construction of the build actually began.

So the question was, had the works on the chargeable development started or not?

What was the decision?

The Planning Inspectorate upheld the surcharges on the basis that the works on the chargeable development had started.

Under the Town and Country Planning Act 1990, works on chargeable development are deemed to have begun as soon as any “material operation” comprised in the development is started. Under the Act, “any work of demolition of a building” is a material operation.  The Developer also argued that as it had not discharged the pre-commencement conditions, the demolition works were not lawful due to conditions not being met and the works not being lawfully commenced. However the Inspector held that the CIL Regulations do not require the commencement to be lawful in order to trigger payment of the CIL liability.

Interestingly, on a technicality the demand notice was quashed and the Council told to re-issue it with the correct deemed commencement date should they wish to pursue the CIL (the demand notice had assumed an incorrect deemed commencement notice on the council’s own evidence)

Therefore, even though the demolition did not form part of the planning permission, the start of the demolition works still constituted the commencement of development for CIL purposes. 

Is there any way of ensuring that demolition does not trigger CIL?

Where only demolition works are proposed (perhaps to implement the planning permission and thus “save” it before a pause before construction works commence) in order to avoid the same triggering CIL, it may be possible to carry out those demolition works pursuant to permitted development rights (by applying for the necessary prior approval) so you separate the required planning permission for demolition from the development of the new constructed development on which CIL is payable. Permitted development rights for demolition are detailed and need careful consideration and advice before being able to rely on the same for your demolition works. When you’re ready to start your construction of the new floorspace ensure the CIL commencement notice is served at that point. If using the route of permitted development rights to authorise the demolition part of works, do note that the same cannot therefore be relied upon as works “saving” the new permission for the construction element so you will need to ensure that does not time expire.

The real estate, planning and construction team can advise developers, land owners and private individuals on the full range of planning law issues.