At a glance
- Always check the environment plan before assuming a commercial property can be put to another use.
- A change to residential use often requires an extensive environmental and planning permit process, including environmental assessments.
- Consult the local authority early: informal pre-application discussions save time and costs later.
Why changes of use are a current issue
Outdated offices in car-oriented locations and vacant retail premises in secondary locations are often no longer marketable in their original use. Conversion to residential accommodation, small-scale commercial premises or hospitality use can significantly increase the value of such a property.
Step 1: consult the environment plan
The local authority's environment plan determines which uses of a property are permitted. Check whether the intended new use complies with the rules, or whether an amendment to the environment plan or an environmental and planning permit for a departure from the permitted use is required.
Step 2: environmental and surrounding-area assessments
- Soil investigations, particularly for sites previously designated for industrial use.
- Noise and odour assessments when changing to a more sensitive use, such as housing.
- An asbestos survey for properties built before 1994.
- Parking standards: a different use often entails different parking requirements.
Step 3: pre-application discussions with the local authority
Informal pre-application discussions with the local authority provide early insight into feasibility, the assessments required and the expected timescale. This prevents you from discovering only after purchase that the intended change of use is not feasible.
Financial considerations
Weigh the costs of assessments, the permit process and conversion works against the increase in value resulting from the new use. A change to residential use can increase the value considerably, but the timescale and uncertainty are also greater than when selling or letting the property in its existing use.
Frequently asked questions
How long does a change-of-use procedure take?
This varies considerably: a minor departure may be permitted within a few weeks to months, while an amendment to the environment plan can take six months or longer.
Can I buy a commercial property subject to a change of use?
Yes, this can be included as a termination condition in the purchase agreement, allowing you to withdraw from the purchase without cost if the intended use is refused.