The High Court in Shropshire Council, R (On the Application Of) v The Secretary of State for Communities and Local Government [2019] EWHC 16 (Admin) recently had the opportunity to consider the strictness required by developers claiming the self-build exemption, so as to ensure compliance with the ‘commencement notice’ provisions of the Community Infrastructure Levy Regulations 2010 (CIL).
Legislation
The exemption for self-built houses is to be found for the most part in Regulation 54A of CIL which defines such developments as being a dwelling built by a person (P) (including where built following a commission by P) and occupied by P as P's sole or main residence.
Regulation 54B then sets out the process for obtaining exemption. In particular, as relevant in this case, it specifies the following:
“(6) A person who is granted an exemption for self-build housing ceases to be eligible for that exemption if a commencement notice is not submitted to the collecting authority before the day the chargeable development is commenced."
Regulation 2(1) has definitions, including: "Commencement notice" means a notice submitted under regulation 67." Of importance, Regulation 67 provides as follows:
“(2) A commencement notice must—
(a) be submitted in writing on a form published by the Secretary of State (or a form to substantially the same effect);
(b) identify the liability notice issued in respect of the chargeable development;
(c) state the intended commencement date of the chargeable development; and
(d) include the other particulars specified or referred to in the form.
…
(8) A commencement notice is valid if it complies with the requirements of paragraph (2)."
The Facts
The developer, Mr Lee Jones, had been granted by the council for his development an exemption for self-building under CIL. The development was, however, subject to a financial contribution of £9,000 secured by a section 106 agreement.
On 10th July 2015, Mr Jones sent the council’s planning officer an email advising in the simplest terms that the development was to commence on 11th July 2015 and acknowledging the terms of the section 106 agreement. The council’s planning officer acknowledged receipt of the email.
However, on 13th August 2015, the council issued a demand notice requiring an immediate payment of £39,361.43 on the grounds that development had commenced without a commencement notice having been sent to the council. Mr Jones appealed the demand notice. The appointed inspector allowed the appeal finding that, although Mr Jones had not strictly complied with the requirements of a ‘commencement notice’ under Regulation 67, the email giving notice of commencement was, in substance, of the same effect intended by such regulations. The council judicially reviewed the inspector’s decision.
The Decision
The High Court allowed the judicial review and quashed the inspector’s decision.
The judge concluded that there must be strict compliance with regulation 67(2) and only then is a valid commencement notice served. In particular, he stated:
“The definition chosen is not 'a notice informing the charging authority of the date of commencement of the development': it is "a notice submitted under regulation 67". On the ordinary meaning of the words it is extremely difficult to draw a conclusion other than that a notice that does not comply with the requirements of reg 67 (as to both content and timing) is not a commencement notice at all for the purposes of the Regulations …
In my judgment he should have done so, and he should have concluded that the email was incapable of being a commencement notice, because, as it failed to comply with the requirements imposed by reg 67, it was not "submitted under reg 67".
Lesson: Unfortunately, CIL is not a forgiving legislative instrument whereby procedural errors are invariably fatal. It is, therefore, important that the notice requirements are clearly reviewed, understood and strictly complied with from grant of permission through to the development’s completion.
You should always use the prescribed forms and double check that the council has received them before moving on with the next phase of the implementation of the development.
