The revised National Planning Policy Framework permits isolated homes in the countryside in limited circumstances. One of these is that there is an essential need for a rural worker, including those taking majority control of a farm business, to live permanently at or near their place of work.
The planning permission for the new agricultural dwelling will have a condition attached to it, restricting the occupation of the dwelling to an agricultural worker and their dependants. The model form of Agricultural Occupancy Condition (AOC) restricts the occupation of the dwelling to:
"a person solely or mainly working, or last working, in the locality in agriculture or in forestry, or a widow or widower of such a person, and to any resident dependants."
The problem for landowners is, of course, that an AOC radically limits the potential market for a property and depresses its value (on average by 30%). If the AOC has been breached for many years, the Local Planning Authority (LPA) may not be able to require the landowner to comply with it. However this ‘immunity’ from enforcement is subject to conditions and limitations.
If there is no immunity to enforcement action, as an alternative, the landowner may be able to show that the AOC does not serve a useful purpose and should therefore be removed.
Breaching an AOC
If an AOC is being breached and the LPA becomes aware of this, it may take enforcement action and require non-conforming occupants to vacate the dwelling. If the AOC has been breached for a continuous period of ten years it is advisable to obtain a certificate of lawfulness (commonly known as a CLEUD), to guard against any such enforcement action.
The application for the CLEUD should be submitted to the LPA with sufficient evidence to demonstrate a continuous breach in the preceding ten-year period, working back from the date of your application. The breach should also be subsisting on the date of the application. One of the most common reasons to refuse such an application is where there is a gap in the ten-year period, either because the property is vacant (which may constitute compliance with the AOC) or because it is occupied by a person able to satisfy the AOC.
Unfortunately a CLEUD only confirms that enforcement action cannot be carried out at the time of the application. Therefore, even if you do obtain a CLEUD, the AOC will become enforceable again if it is complied with in future. Remember that a period of vacancy could make the AOC enforceable again.
To ensure the AOC is removed and no longer enforceable, a landowner will need to apply to the LPA to vary the planning permission and remove the condition. If you have breached an AOC continuously for ten years, you would normally apply for a CLEUD and to remove the condition at the same time. You could use the grant of the CLEUD as justification that the AOC is no longer necessary, and the LPA could then remove the condition.
Removing an AOC
However, this twin-tracked approach may not be open to a landowner if, for example, the landowner is not eligible for a CLEUD (eg where there is no continuous breach over the last ten years) or the LPA considers that a CLEUD is not sufficient to remove the AOC. In these cases, a landowner will normally need to carry out a marketing exercise to demonstrate there is no potential buyer who satisfies the AOC. The marketing exercise usually includes advertising the property for sale or rent, making it clear that occupancy is limited to those who comply with the AOC. The sale or rental amount will be at a discount to reflect the AOC. The marketing exercise is normally sustained over a period of twelve months. Each LPA will have its own specific requirements, so you should check what these are before you embark on the marketing exercise. An application can be refused if the LPA considers that the exercise was inadequate, for example where the advertised purchase price was too high. Determining the right price at which to market the property is therefore of crucial importance.
A landowner’s marketing exercise was criticised in Re Cefn Betingau Farm (2012). The criticisms included insufficient comparison with other similar properties to demonstrate the price reduction, not advertising in the specialist farming press and a failure to make price changes to reflect fluctuations in the wider property market.
In a recent 2018 decision, an Inspector removed an AOC from a planning permission even though he criticised the market testing exercise. Planning permission was granted in 1981 for the construction of a dwelling and garage subject to an AOC. The Inspector agreed with the Council that additional land included with the property for the purpose of marketing had inflated its price and the discount was too low. However, even if the property was valued with a more realistic discount and without the additional land, it would still have been around £850,000. The Council confirmed that the only class of people likely to satisfy the AOC criteria for a property of this value in the area would be retired farmers with considerable financial resource. The inclusion of the additional land would make little difference to this very limited class of people and the AOC was unnecessary for such a high value dwelling.
So – there is hope for estates with high value properties subject to an AOC. The lesson to be learnt is to follow the LPA’s requirements for the marketing exercise to reduce the risk of being refused and to maximise your chances of a successful appeal.
If you require further information about anything covered in this briefing note, please contact Jay Sattin, 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, January 2019