Although the days of lockdown and prohibited foreign travel are now (hopefully) firmly behind us, demand for a house in the country continues to be strong with buyers still in search of that quintessential country home brimming with unique charm and character. With many of these properties regarded as being of special architectural and historic interest and thus carrying listed building status, it is important to understand how buying a listed building may impact upon future use and enjoyment of the property - and what a buyer should specifically check prior to an acquisition.
Understanding the listing
Historic England maintains a register of all nationally protected historic buildings. The listing will cover the entire building (including any later extensions and additions) as well as the curtilage of the building and any structures thereon. The buyer should review the entry for the property to understand whether it is Grade I (for buildings of the highest significance), Grade II or Grade II* listed, and whether there are any features noted as being particularly significant.
Any future alterations to either the interior or exterior of the building are likely to require listed building consent (which is entirely separate from planning permission) and the buyer should appreciate that any proposed works which might alter the special architectural or historic interest of the building will be subject to stringent controls.
If the purchase is dependent upon the ability to carry out certain works in the future, the buyer should consult a specialist heritage consultant for comfort as to whether that consent is likely to be granted. Where absolute certainty is needed, the buyer could consider offering to exchange conditionally on procuring consent – if the commercial terms of the deal can be negotiated to allow for this delay.
Engage a specialist surveyor
The buyer should ensure that they appoint a surveyor at the outset who specialises in listed buildings and who can provide a comprehensive analysis on both the physical condition of the building; and any past alterations. The surveyor should advise on whether past works have been carried out in accordance with listed building consent, including any conditions and the drawings and plans that were approved by the local authority. The surveyor should work with the buyer’s solicitor to ensure that all completed works have obtained requisite listed building consent or to identify and consider any breaches.
It is a criminal offence to carry out (or cause to be carried out) works to a listed building without the requisite listed building consent. If prosecuted, this could result in an unlimited fine, or up to two years imprisonment.
There is an ongoing risk for a buyer after purchase that the local authority may elect to commence enforcement action and the works may have to be reinstated. There is no time limit in which the local authority must commence enforcement action so (unlike with breaches of planning permission) the works will never become immune. A failure to comply with a listed building enforcement notice is also a criminal offence.
Solutions where buying with a known breach
If breaches of listed building consent are identified during purchase due diligence, the buyer should not panic (as this is not uncommon and is often minor). The possible solutions will depend on the facts but may include the following:
- Purchase the property notwithstanding the breaches and the risk that enforcement action might be taken in the future - the length of time that the works have been in situ and the nature of the breaches will be important considerations here and it is important to appreciate that this option is unlikely to be feasible where mortgage finance is being obtained.
- Obtain retrospective consent for the works - it could be worth obtaining the opinion of a heritage consultant as to whether retrospective consent is likely to be granted for the breaches. Many sellers will resist an obligation to procure retrospective consent due to the time and risk involved - so this may need to be something the buyer deals with post completion. Again, this may not be an option with finance as a lender is likely to require retrospective consent to be obtained prior to advancing funds.
- Explore whether an indemnity insurance policy can be obtained for a reasonable premium. The seller would usually pay for the policy given this is a defect in their title, but that would need to be negotiated. The insurance would provide financial compensation in the event that enforcement action were taken in the future. Any such policy is likely to be invalidated by future works being carried out to the building and may not therefore be appropriate if works are planned for the future.
In summary: buying a listed building requires enhanced due diligence on past alterations as well as careful consideration of future plans. With the right advice all of this can be easily navigated!
If you require further information about anything covered in this briefing, please contact Jenna Whistler or your usual contact at the firm on +44 (0)20 3375 7000.
This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.
© Farrer & Co LLP, November 2022