Homes England has revised its position on the requirement to provide evidence of discharge for each pre-commencement and pre-occupation planning condition to individual buyers’ conveyancers in its updated Builder Participation and Registration Guidance published on 24 December 2020 (the "Guidance") for the 2021-23 Help to Buy Scheme.
The revisions have been made following concerns expressed by the Home Builders Federation regarding the likely delays to housing delivery that such a requirement would cause. The revised Guidance acknowledges the considerable amount of time that it can take for local planning authorities to provide written confirmation that any pre-commencement and pre-occupation planning conditions have been satisfied by a developer. Particular acknowledgement is given to pre-commencement and pre-occupation conditions that require developers to enter into infrastructure agreements, the completion of which can be delayed due to capacity constraints at local authorities or utility companies even though the relevant scheme may have already received technical approval.
The updated Guidance now requires that all applicable pre-commencement and pre-occupation planning conditions within any planning permission or planning agreement are complied with prior to practical completion and the requirement for evidence of discharge of all such conditions to be provided to conveyancers prior to legal completion has been dropped.
Where discharge of pre-commencement and pre-occupation conditions has not been obtained, the Guidance now states that Homes England will not enforce the Funding Administration Agreement against a developer provided that each of the following requirements are satisfied:
- the developer has applied to the local planning authority for confirmation that the relevant pre-commencement / pre-occupation conditions have been satisfied (where consent or approval of the local planning authority is required);
- the developer, having received technical approval, is in the process of putting in place any infrastructure agreement required by any pre-commencement / pre-occupation conditions;
- the relevant pre-commencement / pre-occupation conditions have been satisfied (or will be when any consents or approvals awaited from the local planning authority are received and any required infrastructure agreement entered into); and
- the developer has entered into a Deed of Indemnity with the Eligible Purchaser upon legal completion of the Eligible Dwelling in the form annexed to the Guidance by which the developer indemnifies the Eligible Purchaser and their successors in title against costs incurred facilitating any outstanding obligations or rectifying any breach of them.
The upshot for developers of Help to Buy properties? It still pays to obtain formal discharge of any pre-commencement or pre-occupation conditions as soon as possible to avoid delays in housing delivery and sales and ensure compliance with the Funding Administration Agreement. Where pre-commencement or pre-occupation conditions have not been discharged, developers will need to satisfy the requirements set out above to avoid Homes England enforcing the Funding Administration Agreement against them.
Homes England appreciates that it can take considerable time for a local planning authority to provide written confirmation that any Pre-Commencement and Pre-Occupation Planning Conditions have been satisfied by a Developer. This can delay housing delivery.