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CIL AND AFFORDABLE HOUSING RELIEF

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REBECCA STADDON, modified 2 Months ago.

CIL AND AFFORDABLE HOUSING RELIEF

Advocate Posts: 100 Join Date: 05/09/13 Recent Posts

Hi all, I have a situation where a developer was granted 100% affordable housing relief for a site, commenced work and then mothballed it. The site has now been purchased by a different developer. I understand from the regs. that in an ideal world the original developer would have contacted us to advise of a disqualifying event and we would have served them with a Demand Notice for the full amount of CIL including late payment interest from the date of commencement. However, in the real world we have heard nothing from the original developer but the new developer has emailed us with a CIL Form 2 to assume liability to pay the CIL and advising us that they wish to continue with the build as open market dwellings. Would you issue the CIL Demand Notice for immediate payment, including late payment interest and a surcharge for failure to notify a disqualifying event, to the original developer or the new developer? This seems rather harsh on the new developer as he hasn't technically breached any CIL Regulations. I'd be grateful for your help with this one. 

DA
David Attmore, modified 2 Months ago.

RE: CIL AND AFFORDABLE HOUSING RELIEF

New Member Posts: 9 Join Date: 30/03/20 Recent Posts

We've not had anything similar here, but it does sound quite tricky. Did the original developer submit a CIL Form 2? 

SA
Simon Anstey, modified 2 Months ago.

RE: CIL AND AFFORDABLE HOUSING RELIEF

Enthusiast Posts: 74 Join Date: 17/07/15 Recent Posts

If the second developer now owns the site then presumably they were aware of the CIL liability from the local land search? If they have assumed liability then I would just treat them as a new applicant and start the CIL process from scratch giving them the  opportunity to pay by instalment and no penalties for errors they have not made. I would suggest that you have missed the opportunity to chase the original developer for CIL payment and penalties. Had the new developer been more savvy they could have refused to buy the site until the original developer paid all the CIL for them. If the new developer intended to claim social housing relief the situation would have been more complex and you wouldn't have been able to award an exemption. You are now in the postion that you will get CIL income on a site where you weren't expecting any.

SA
Simon Anstey, modified 1 Month ago.

RE: CIL AND AFFORDABLE HOUSING RELIEF

Enthusiast Posts: 74 Join Date: 17/07/15 Recent Posts

Rebecca, If you are adopting this approach, then in my view what you can do is pursue the original developer for the CIL payment and surcharges. In reality, I think that you will have a long battle and won't get the money from them. The usual sanctions eg stop notices will have no leverage. Your other option is to recover the payments from the current owners as they have (a) assumed liability and (b) own the land and will be really affected by such actions as a stop notice. You say it seems very harsh, I guess you mean to impose the sanctions on the new owner when it appears they are willing to make the CIL payments. That is why I would adopt the more flexible approach of letting them pay CIL due without taking on responsibility for surcharges and interest for actions over which they had no control, although strictly speaking they have assumed liability for these.

Although David's post above is the 'correct' way to handle transfer of liability, submission of Form 4 requires both parties to combine to agree to transfer liability. Clearly this was not a situation discussed by them and the Form 2 from the new owner shows them willing to assume responsibility. By not submitting Form 4 I suggest that the original owner has left themselves more open to the recovery action I mentioned at the start of this post.

CB
Claire Burton, modified 1 Month ago.

RE: CIL AND AFFORDABLE HOUSING RELIEF

New Member Posts: 18 Join Date: 12/08/13 Recent Posts

I would agree with Simon.  One of the unfortunate points in the regs.  The key point is you will still receive the levy and correctly by the person who really has not been at fault, assuming they have contacted you directly on purchase.  The other way round will be a lot of extra work with no real gain, especially when considering officer time.  You cannot force form 4 Transfer to be completed.  However we have on a number of occasions contacted both parties to state to do this or the consequences of leaving both parties as liable and that has done the trick