Part V Planning & Development Act 2000:(Artice published pre statutory amendments)

Part V of the Planning and Development Act 2000 is proving to be highly impractical for both local authorities and developers, something which the construction industry anticipated, but which has been publicly illustrated recently by 2 high profile cases. O’Malley construction are currently in negotiation with Dublin Corporation as to how they can satisfy the part V provisions in a development of 7 luxury apartments on Shrewsbury Road, and Liberty Homes have arranged to provide a block of 36 apartments at “Affordable” prices in their 190 unit development at Clarion Quay where prices range from £180,000 to £600,000.

By now you are probably sick to the back teeth of hearing about Part v and the impact it is making, Whether we like it or not, Part V is here to stay and for any developer it has important consequences, both in terms of the value and saleability of your development.

Part V applies to proposed residential developments on lands which have been zoned residential, or zoned for a mixture of residential and other uses. It does not apply to lands not zoned, or zoned for other uses. It also does not apply where an existing building is converted into one or more residential units, providing that at least 50% of the external fabric of the building is retained.

Planning Authorities can only apply the provisions of Part V to your development if they had implemented their housing strategy into the development plan by the date your application for planning permission was received. Therefore it is essential to be aware of the exact date on which the plan was varied to include the housing strategy. If this was after your application was received, the social and affordable housing provisions of Part V do not apply to you, however your permission will be subject to the two year limitation which still applies to permissions granted to such applications.

In certain limited circumstances it is possible to obtain a certificate of exemption, however it must be made clear that the provisions of Part V will apply unless this certificate is applied for and granted. You cannot just claim that the development is exempt; a certificate must be obtained from the planning authority before applying for planning permission. Developments are not exempt unless and until a certificate has been granted.

Exemption certificates may be issued for developments of 4 or fewer houses, or for developments on less than 0.2 hectares of land. When applying for a certificate the developer has to state all his interests in nearby or adjoining land, including prior ownership, therefore it is impossible to divide a large site into smaller plots in an attempt to avoid the Part V provisions.

The Planning Authority must either issue a decision to grant or refuse the certificate, or make a request for further information within 4 weeks of the application for exemption being made. In the event that the Planning Authority do not issue a decision, or a request for further information, within 4 weeks of receiving the application or further information, they are deemed to have granted the exemption. If further information is requested but not supplied within 8 weeks, the Planning Authority shall refuse to grant a certificate.

Should the Planning Authority refuse to grant a certificate, there is a right to appeal to the Circuit Court within 3 weeks of the date of the decision to refuse.

When applying for Planning Permission the developer must state how they intend to comply with Part V, and the authority must have regard to those suggestions when granting the permission. Any application that does not consider, where necessary, how it will comply with part V may be returned to the applicant.

Part V allows the authority to take up to 20% of the land (as detailed in its housing strategy and included in the development plan) for social and affordable housing. Instead of land, the planning authority may agree to the transfer of either completed houses, or partially or fully serviced sites. Where, for reasons such as the size, shape or other attribute of the site, the planning authority consider it impractical for any of the above transfers, they may require payment of a sum of money in lieu of any transfer.

When making applications for permission you should consider what option is best for you, and how to sell that option to the Planning Authority. For example if you want to transfer houses you should find out what the housing need in the area is, i.e. is the need for 2 bed terraces, or 4 bed detached houses? Is there a greater need for housing for the elderly or disabled, or is there a greater need for housing for single parents? If you are involved in a major development could you build a small retirement village or nursing home in respect of the social and affordable requirements and then have more freedom with the rest of your development?

Most local authorities require the maximum allocation of 20%, but some (e.g. Fingal and Donegal) have lower requirements. The proposed allocation of the quota as between social and affordable housing should be specified, as should the location of the sites or houses throughout the development. If serviced sites are being offered, you should specify what type of units the sites are capable of supporting.

Pre Planning consultations should be entered into which will allow you to identify what proposals the authority is most likely to consider and would give a strong indication of what is not agreeable. It will also give you an opportunity to present your development to the authority in the best light before you finalise your planning application. (It is always useful to write to the Planning Authority confirming the record of what is said at pre–planning meetings!)

Once the manner of compliance with Part V has been agreed, the next issue to consider is compensation, and this is a matter for expert negotiation with the Planning Authority.

Compensation for the transfer of land is calculated in two different ways, depending on what date you purchased, or acquired an option in, the site. For arrangements entered into after the 25th August 1999 the rate of compensation is that of the existing use value of the land. If the site was purchased, or a legally enforceable agreement in respect of the land existed, before the 25th August 1999 you are entitled to compensation valued as the price you paid, or have agreed to pay for the land plus interest, or to the existing land use value, whichever is higher.

Land use value is a complex means of calculating compensation and the value of land will differ in every case, However, no account may be taken of the value which would otherwise attach to the land because of its zoning or “development value” or because of planning permission granted on the land.

Where completed units are transferred to the authority compensation is calculated on the site costs (using the basis set out above), together with the building and attributable site development costs as agreed between the Council and the developer, including a reasonable commercial profit on these costs. Similarly, where partially or fully serviced sites are transferred, compensation will be based on the site costs, (using the basis set out above) and the pro-rata attributable site development costs, including a reasonable commercial profit on these costs. The level of services provided on the sites must be agreed with the Planning Authority.

In order to ensure that you are compensated fully for your compliance with Part V, it is essential to put your case strongly to the Planning Authority when discussing these matters. When entering into these negotiations you should always be able to give figures for all the costs attributable to the development, including; Site costs, Substructure costs, Superstructure costs, External works an site development works costs, Indirect project costs/overhead charges, Value added tax on building costs, Design team fees, Value added tax on design team fees, Planning authority fees, charges, development contributions, etc., Fire certificate fees, Capital contributions, utility connection charges, Inflation allowances / financing costs and any other miscellaneous charges that apply.

Where a part V agreement has been made and has not been entered into within 8 weeks of the grant of the Planning Permission, either the developer or the Planning Authority can refer the matter to An Bord Pleanala. The matter has to be referred to a Property Arbitrator if it relates to the amount of compensation to be paid on transfer of serviced sites or completed units to the Council, to the amount of compensation payable for the transfer of land to the Council, or the sum payable to the Council, where for reasons of size, shape or other attribute of a site, the Council (or the Board on appeal) consider that an agreement for the transfer of land, sites or units is not practical and where instead a sum equivalent in value to the transfer of 20% of the land is payable.

This article gives just a flavour of how difficult Part V is proving to be, but in order to survive it the following points should be remembered:

Part V refers only to lands zoned for residential, or mixed, including residential;

Part V applies only to applications received after the Development Plan is varied to include the requirements of the Housing Strategy;

Certain exemptions can be applied for;

There are no hard and fast rules as to how Planning Authorities will deal with the issues; negotiations should be entered into to achieve what is best for you in terms of type of transfer and allocation of land throughout the development;

The percentage which must be allocated for social and/or affordable housing;

The various categories of housing need in the area and how this can be used to your advantage;

That you are entitled to compensation, and that you must be aware of the many factors which will allow you to maximise your compensation;

If you can’t reach agreement, the matter can be referred to An Bord Pleanala or, for compensation issues, to a Property Arbitrator.