# Development contributions - who pays and when?



## lorelai (10 Nov 2010)

This question came up in conversation recently and none of us could agree on the schedule of events.

If a person was to buy a site with full planning permission, who pays the development contributions? 

Is it the seller of the site who got the FPP (pays them on grant of permission and prior to sale of site?) or is it whoever buys the site and builds on it using the FPP?

And is this something that is pointed out to the buyer by their solicitor prior to purchase?


----------



## mf1 (10 Nov 2010)

"or is it whoever buys the site and builds on it using the FPP?"

Yes. 

"And is this something that is pointed out to the buyer by their solicitor prior to purchase? "

It is a bit obvious! Would the buyer not have some interest in the planning permission and how the whole thing would work? Certainly the solicitor should check that the buyer understands the position and his obligations.

mf


----------



## lorelai (10 Nov 2010)

right so, think i have it straight now, seller gets PP, but doesn't pay contributions, whoever buys the site and uses the PP pays the contributions. Makes sense I suppose!

So what happens in the situation where the buyer isn't made aware of contributions to be paid by solicitor, contributions don't get paid (by anyone) and property is built?

Is there not someone in the planning department that sees the commencement notice coming in and says "oh, they're about to start their build, better get on to them to pay their contributions"?

Must be thousands of people building away and not paying contributions up front. 

So how long after you've built do the Council have to come back to you and demand payment?? Surely there must be a time limit on that kind of thing??

Sorry for all the questions but now that my initial question has been answered it's opened the flood gates in my mind as to how it works!


----------



## mf1 (10 Nov 2010)

"So what happens in the situation where the buyer isn't made aware of contributions to be paid by solicitor, contributions don't get paid (by anyone) and property is built?"

This is what I call the "Shurely Shomebody Elshe Should Be Doing Shomething About Thish" routine. And complete absence of personal responsibility. 

It really is not rocket science that someone building a property should actually read their own planning permission and should actually know that they have an obligation to do something- i.e. build in accordance with the planning permission and pay their financial contributions. 

How can someone building not know that there are financial contributions? Did they never, ever, read their own planning permission? And I find it unbelievable that they would never ask the basic questions - who is responsible for the financial contributions?  When are they payable? And, if they are thinking along  the non -payment lines, what are the problems if they are not paid? 

Why do I get the impression that the solicitor is being fingered as a potential "mark" when/if the Council come looking for their money? 

As I recall, the financial contributions , if not paid, carry an interest penalty so interest will simply mount up until the contributions are paid. 

And the property is not saleable and is not planning compliant until the contributions are paid. 

mf


----------



## lorelai (10 Nov 2010)

First off, thanks for taking the time to reply.

However, I feel i must point out that this is all a purely hypothetical situation I'm asking about! It's out of sheer curiosity following on from a recent conversation with someone. 

I'm not buying a site, I have not previously bought a site, I am not looking to point the finger at any solicitor because I don't have one!! (solicitor that is, I'm in possession of all my fingers)

All questions were asked purely out of curiosity.

I thought it was ok to simply ask questions here without any sort of sinister agenda behind them......


----------



## onq (11 Nov 2010)

Anyone can pay the contributions, but its usually the applicant, since the applicant is the one who sought the permission and who would normally be either building the development or engaging a developer to build it on their behalf.

Where sell on occurs, unless the development had already commenced, it might be rash to assume that any contributions or levies had been paid.
The Conditions of Planning Permission requiring them usually begin with the wording "prior to the commencement ofi development" or similar.
However it is commonplace for people developing pursuant to a permission to resist paying the levies for as long as possible, despite the interest rates.
So even where development had commenced, the levies might not be paid, and a technical breach of planning might have occured.

In relation to any responsibility arising from professional involvement I would note the following; -

I believe there may be no strict requirement for a solicitor to advise a client in relation to the levies.
Even the least experienced layperson knows that permission is required for major undertakings like building houses.
Conditions are written in plain english and Planning Permission conditions are not hidden knowledge.
The Planning Register is available to the public and the permission would be the cause of the price paid for the property in many cases.
Therefore it is a reasonable assumption that the purchaser became or made themselves aware of the permission plus any conditions attaching to it.

However, if the purchaser formally requested advice or professional comment on the permission at any time, there would be a duty of care arising I believe such that the professional should advise the purchaser from within their competence.
This might go far beyond the matter of levies or contributions - issues of rights of way, discrepancies between the site plan and site survey, information not submitted of a material nature [an underground watercourse for example] might all require specific advice to be offered.

The onus on payment goes with the commencement of development.
The person in control of this, or the persion who may breach planning law if the levies are not paid over, and who are therefor liable under law, normally ensure that the levies are paid.
A solicitor in conveyancing mode, not asked to advise the client in detail on the purchase, might be well advised to say nothing about the permission.

I hop this helps answer your question.

ONQ.

[broken link removed]

All advice on AAM is remote from the situation and cannot be relied upon                                            as a defence or support - in    and    of        itself  -         should       legal        action       be           taken.
Competent legal and building professionals should be asked to advise in                                            Real Life with rights to   inspect     and       issue         reports    on     the           matters    at           hand.


----------



## bb12 (26 Nov 2010)

when the commencement notice goes in, it triggers the council to send you the invoice for the contributions.


----------

