Conveyancing Issues when buying a converted building (Commercial to Residential)
planning-permission-commercial-to-residential

Conveyancing Issues when buying a converted building (Commercial to Residential)

Earlier this year the UK government announced planning reforms which will permit property owners to convert a wider range of commercial properties without first gaining planning permission from the local authority for a change of use.

Previously, only office buildings could be converted however under the new proposals, retail and industrial properties can now be converted into residential dwellings as well.

How is commercial property defined?

Commercial property is any building that turns a profit. For example, a warehouse, gym, supermarket, cinema, office block or local convenience store.

In any case where an owner wishes to convert commercial premises into a residential dwelling, planning permission may need to be obtained prior to any building work or conversion taking place. Failure to obtain the necessary permissions could lead to a planning breach with all the associated legal strife that follows.

In some cases, commercial premises may be advertised for sale with planning permission already granted and a conveyancing solicitor will be able to advise you if there are any associated legal implications you should be aware of.

Is planning permission always required?

In 2013, the rules surrounding planning permission changed which meant that some kinds of property could be converted without the need for full planning permission. These developments come under the umbrella of Permitted Development Rights (PDRs) and whether they are applicable depends upon the ‘class’ of commercial property the building falls into. PDRs are now being extended to include office buildings, retail and industrial properties.

Class of commercial properties

  • Class A – Commercial and other retail premises
  • Class B – Factories, offices, warehouses and workshops
  • Class C – Residential institutions such as hotels and hostels
  • Class D – Non- residential institutions, assembly and leisure

The above categories are then sub-divided into further classes:

  • Class A1 – includes shops, hairdressers, dry cleaners
  • Class A2 – financial premises such as banks, accountants or estate agents
  • Class B1 – offices/light industrial suitable for residential areas
  • Class B2 – light industrial buildings
  • Class C3 – refers to residential property

Even where planning permission is not required you will still need to seek ‘prior approval’ from the local authority. It is also worth bearing in mind that it is the change of use that is permitted not the conversion itself. If you still need to knock down walls or build an extension you may still need to obtain planning permission.

Although the works must adhere to Building Regulations, developers have free rein over matters such as internal or external space, daylight, external noise, air quality and location. It is a sad fact that buildings of this nature are often result in lower requirements than newly built homes.

How is planning permission obtained?

You should apply to your local planning authority (LPA) department of your local authority. Application fees and procedures differ from one local authority to another as do timescales, so it is advisable to engage with them at the earliest opportunity.

If the building is listed or situated within a conservation area then PDRs will not apply and you will have to go through the full planning permission process, in addition the LPA may request full architectural drawings.

A leasehold property will need at least 70 years remaining on the lease if a mortgage is needed to purchase the property. The permission of the freeholder will also be required before any work can begin.

Can I get an ordinary mortgage?

There are generally two main funding options if you are considering buying commercial premises with a view to converting it into residential accommodation.

  • Self-build mortgage – despite its name, this type of mortgage can be used to fund the conversion of property as well as building one from scratch. This sort of mortgage provides an initial amount for the purchase of the property and then pays the rest of the money in stages. These stages are paid in arrears which means you will need to have the funds up front – the mortgage provider will reimburse you once you have provided evidence the works have been completed to a specified standard.
  • Bridging loan – This can cover all of the work upfront however, this type of funding comes with much higher rates of interest which can really sting if the project overruns. Once the property conversion has completed you have the option of refinancing on a much more reasonable standard residential mortgage.

If you are buying a property that is already converted, then providing the builder has adhered to planning regulations and any other permissions needed pertinent to the location, then, in most cases, you should be able to obtain a standard residential mortgage.

Buying a converted property – mistakes to avoid

If you need to obtain a mortgage in order to buy a property there are a list of properties that mortgage providers do not particularly like, for example:

  • Homes of unusual constructionany building not of standard brick and mortar construction may result in a lender refusing a mortgage application.
  • Flats over shops, restaurants or officesbasically any property where other people have a right of access.
  • Brownfield sites lenders do not like properties of a former industrial nature, this is generally because the land may be contaminated. A solicitor or conveyancer should check the certificates to prove the land has been decontaminated.
  • Character homes converted buildings such as lighthouses, churches, fire stations, schools, shops or pubs may need a mortgage from a specialist lender.
  • Size – because the government’s own minimum space standards cannot be imposed under PDRs , flats are often significantly smaller than the 37 square metre minimum set by the standard. This may pose problems when trying to obtain a mortgage.
  • Limited mortgage options lenders are unlikely to lend on homes less than 30 square metres with some adopting a 37 square metre space threshold.
  • The condition of the building under current PDRs external changes to a building are not permitted. This means that many office buildings may have external cladding panels that today would not be able to be installed. Your solicitor should obtain written assurance from the builder, or if leasehold, the landlord, that they are safe.
  • Leaseholder restrictions your solicitor should look carefully into the length remaining on the lease and the terms of it, metering arrangements, council tax, and service charges.
  • Service charges/management feesif the property is leasehold, your solicitor should explain the annual fees payable for service charges and/or management fees. The average charge in London is between £1,800 – £2,000 per year however, this varies around the country. It is generally thought anything over £5,000 per year is excessive. Your solicitor should confirm whether there is any further work planned to the building and ask for a list. It is good practice for your solicitor to ask the landlord to set out estimated service charges for the next five years as well as provide documentation confirming service charges for the preceding three years.
  • Repair bills – if the property is part of an old office block or other ex-industrial building, you may find you could be faced with repair bills within a few years. It is a careful balancing act to know whether to spend money on repairs which you may never see a return on or failing to repair and not being able to sell it on at all.
  • Building regulations Your conveyancing solicitor should check and confirm that any Building Regulations have been formally signed off.

A solicitor should also make sure that the conversion has not flouted planning laws and that it has not been converted in flagrant breach of change of use restrictions, in general and also  in places such as:

  • Conservation Areas
  • National Parks
  • An area of national outstanding beauty
  • A listed building/schedule monument
  • If the property is within an area of scientific interest
  • A safety hazard area
  • A military explosives area

Lockdown has been hard for everyone but can be much harder for people living in tiny flats and studio apartments particularly those without balconies. With the increase of working from home, you should, perhaps, give further consideration to the internal soundproofing of a converted commercial building or office block. It may not be as good as it should be which would be devastating to find out after you have moved in and can hear every conversation the neighbours have.

Finally, by setting a minimum standard space for homes, the law has recognised that very small spaces can be detrimental to health and wellbeing. Because it is much less obvious than the risk from, say, fire, having space to move around should not be underestimated because it can be just as devastating. Local authorities have the power to inspect potentially unsafe dwellings, and can, in extreme cases, take enforcement action. You should mention it to you solicitor if you are concerned.

 

 

 

 

What our clients say

Great value for money. Everything went smoothly and I was very pleased with the service provided
Rachel Whitfield
Rachel Whitfield
20:59 12 Oct 18
Excellent! Very responsive, and really helped to push the purchase. There were unexpected delays during the process, but Anthony really helped to reassure me that he was doing everything he could to progress the sale. Ultimately, it all worked out in the end, and I would highly recommend! I would also recommend for auction purposes.
Sean Stevens
Sean Stevens
09:14 21 May 18
Very happy customer. Understanding of our needs and recommended a really fantastic solicitor.
Jack Hearne
Jack Hearne
17:49 12 Oct 18
I have just completed the purchase of my flat with them. They were recommend by the estates agents Phillip Arnold and they were fantastic. My case was handled by Milena who was really helpful and always available on the phone. The online system is also really easy to use. If I buy or sell a property I will definitely be using them again.
Sharon Kelly
Sharon Kelly
18:27 20 Dec 17
I used this service following a recommendation. The online case tracker worked really well. I would recommend this service as it's vital in the coordination between Estate Agencies and between Solicitors. The service proved invaluable in helping progress the conveyancing work efficiently and effectively. Completed the transaction just before Christmas having instructed the Solicitors on the 4th.
Shelly Harrill
Shelly Harrill
16:30 19 Dec 17
Excellent Service. Final Price same as quoted.
A Google User
A Google User
14:26 19 Dec 18
Have used them twice. Both times completion happened in less than 4 weeks, even over Xmas! Totally amazing. They take the stress out of the whole process.
Daniel West
Daniel West
13:04 21 Dec 18
Excellent Service. Final Price same as quoted
Parsa Khamooshi
Parsa Khamooshi
15:54 21 Dec 18
Being a first time buyer they guided me smoothly through the whole process of moving into my first home. Very professional and economical.
Uday Seth
Uday Seth
12:31 24 Dec 18
Express Conveyancing have been excellent in the handling of my recent house sale and purchase. Would highly recommend
James Ellis
James Ellis
11:43 30 Apr 19
Express Conveyancing have been excellent in the handling of my recent house sale and purchase. Would highly recommend
Michelle Preston
Michelle Preston
12:20 30 Apr 19
ThanksThanks for handling my sale and purchase. No complaints from me. Rebecca was regularly on hand to help with my queries and deal with issues.
Claire Miles
Claire Miles
17:48 07 May 19
I bought my first home in South London with Express Conveyancing . Great professional service, I was regularly updated and looked after. Top marks, 100% recommendation from me!
Dale Griffiths
Dale Griffiths
15:58 02 May 19
Good service and happy with the conveyancer
Chris Jenkins
Chris Jenkins
22:01 17 May 19
Great service from start to finish. Was great being able to see progress online! Very quick and efficient! All staff were helpful. Highly recommend
Reece Moseley
Reece Moseley
06:20 30 May 19
I would highly recommend them. They deal with any queries promptly and efficiently. Would definitely use them again.
Sahar Dalini
Sahar Dalini
09:13 10 Jun 19
Fair prices good efficient service
Sue Batchelor
Sue Batchelor
18:46 01 Jun 19
I would highly recommend them. They deal with any queries promptly and efficiently. Would definitely use them again.
Sahar Dalini
Sahar Dalini
09:14 10 Jun 19
This company does not provide conveyancing services directly, they are an introductory company, paid by solicitors to get clients for them. Once you engage with a conveyancing solicitor suggested by them, they don't interfere, and how quick or slow the process is depends on that solicitor that paid them to recruit you. In our case the solicitor was pleasant and corteous, but a bit relaxed, and the whole process took about 9 weeks - about average, but there was nothing "express" about it.About the app to track progress, it is updated by the conveyancing solicitor, so its its usefulness depends on how much he engages with it. In our case, not so much.
Pedro Silva
Pedro Silva
18:27 02 Oct 19
Absolutely outstanding service provided by Rebecca. She really got things moving when they came to a halt. I was moved within 9 weeks. If it wasn't for Rebecca, the move wouldnt have happened that quick. Definitely use EC again in the future.
Sara Kawsar
Sara Kawsar
11:35 03 Oct 19
we purchased a new build flat. The staff at Express were very helpful in finding us our solicitors who was great.
Carl Devenport
Carl Devenport
14:48 26 Sep 19
great service. Completed quickly as promised
Mark Slavinski
Mark Slavinski
16:52 24 Sep 19
Was looking for a modern solicitor with an online website status page so you can live track your progress. The service was fast and they assigned us with a solicitor firm, which was very fast, efficient and pleasant to deal with. HIGHLY RECOMMENDED
Cedric Tomas
Cedric Tomas
21:29 13 Mar 20
Express provided me with an excellent firm (WYM Legal) and had a good portal for keeping me updated during the process. The portal did lack detail but nonetheless meant slightly less chasing.
Sarju Shah
Sarju Shah
10:50 11 Apr 20
From the quote stage all the way through to completion, this was a very straight forward and open process. Express Conveyancing provided a very quick and detailed quote, which was competitive and their partner PCS delivered the service you’d like to expect from a conveyancing firm. Very happy with the service and would definitely use again.
Harry Edwards
Harry Edwards
20:33 11 Mar 21
I always received update on time, they are very good at calling back. I completed my purchase just under 10 weeks. I am very pleases with service and fee. I definitely recommend the Express Conveyancing to my friends.
Bikash Limbu
Bikash Limbu
14:42 12 Jan 21
I needed to get an auction legal pack reviewed at short notice. Rebecca and her team were super fast AND thorough in their review, identifying areas of concern and helping me get the seller to correct issues with the auction legal pack. Fast, complete and clear responses on all my multiple communications. Super service.
Tracey Lall
Tracey Lall
11:02 08 Oct 20
I decided to appoint Express Conveyancing as the reviews were good and the prices were very reasonable. Rebecca Purssord was attentive and professional throughout. Despite the effects of Covid-19, Rebecca remained available and was very helpful at all times. I would not hesitate to recommend them.
michael lewis mcrae
michael lewis mcrae
16:48 01 Jul 20

Our News

× Whatsapp Us