Due diligence and Historic Buildings

It is a little known fact that breaches of the Planning (Listed Buildings and Conservation Areas) Act 1990 (the Act) by a property owner can have dire consequences for a subsequent purchaser of the property. At present, there appears to be no professional within the purchasing 'team', who is responsible for protecting a purchaser in this matter. Or, rather, conveyancing solicitors and/or surveyors might be held negligent for failure to properly advise intending purchasers of their liabilities in this matter.

The issue is about to become of greater import as the government, under the Office of the Deputy Prime Minister (ODPM), has commissioned a guidance document for local authorities on taking forward prosecutions for unauthorised works to listed buildings.

The aim of the work is to increase local authority confidence in prosecuting cases, and to ensure that the current system is used to its full potential. This follows an earlier review completed in January 2004 which found that the present level of penalties was satisfactory, but that the powers were not universally exploited.

Encouraging prosecutions

This has also been a matter of concern to the Institute of Historic Building Conservation (formerly the Association of Conservation Officers) which regularly reports on prosecutions in order to encourage conservation officers and their authorities to pursue offenders through the courts.

The most common offences are failure to apply for listed building consent for works that require it, and not complying with conditions attached to a listed building consent. Listed building consent is normally required for demolition, in whole or in part, and for any works of alteration or extension which would affect the character of a building of special architectural or historic interest. It is a criminal offence to carry out such works without consent,

Unlike other elements of the planning acts, breach of the listed building Act is a criminal matter. Therefore, there is no period of limitation. No immunity from culpability can be obtained through time. Also, the responsibility for remedy, via enforcement, runs 'with the land', so although a purchaser will not be criminally liable for the actions of another, they may be enforced to remedy the breach. This can not only be extremely costly but may also result in a consequential reduction in the value of the property.

The Act states that:

A person guilty of an offence under s 9 of the Listed Buildings Act (Offences) is liable -

(a) On summary conviction to imprisonment for a term not exceeding six months or a fine not exceeding £20,000, or both; or

(b) On conviction on indictment to imprisonment for a term not exceeding two years or a fine, or both.

Unauthorised work

The most common cause of problems is variations and amendments that have been carried out during building works, after a listed building consent has been granted. Such matters, which may be deemed 'necessary and contingent' upon the works, still need specific consent, and are enforceable. Recent cases we have been involved in included installation of ubiquitous 'down-lighters', replacement of lath and plaster by plasterboard in walls and ceilings, removal of internal and external walls, additional openings, failure to preserve items that were stored for later reinstatement, and even the removal of an entire roof.

Failure to obtain discharge of conditions attached to listed building consent also leaves a purchaser with enforceable liability. This can include failure to obtain approval for materials and details. In all cases, any works carried out in breach of conditions may have to be removed and/or reconfigured and/or reinstated

Any unauthorised works are usually only discovered when the purchaser applies for their own consent for alterations upon occupation. At this point the conservation officer is likely to consult their file and first inspections will result in discovery of a possible offence. A formal letter will then be issued informing the purchaser of perceived breaches of the Act, and detailing remedial works required. Usually a time is given for these to be carried out on pain of issue of an enforcement notice. An enforcement notice will be registered as a charge on the property, and thus makes it virtually unsaleable. This may have implications in the security for finance.

In addition, failure to comply with an enforcement notice is also a criminal offence and although the purchaser could not be prosecuted for the original unauthorised works, they could be prosecuted for failure to remedy the harm which has been caused.

What can the new owner do?

Having been served with a notice or a letter of intent, the purchaser then has a choice to either remedy the problem as requested by the local authority, or to apply for listed building consent retrospectively, for the works as carried out. If the purchaser is prepared to remedy the breaches, then that is the end of the matter as far as the local authority is concerned, but this may have far reaching and dire consequences for the purchaser, who may end up with a building that differs very materially from that they thought they were purchasing. The purchaser should not in any event remedy the harm without seeking legal advice, especially if the purchaser wishes to bring a negligence claim against his conveyancing team. A negligence claim may fail if it can be shown that retrospective consent could have been obtained for the works as built.

If application is made for retrospective listed building consent for the unauthorised works, enforcement or other action is usually suspended until the outcome is known. If consent is granted, the matter ends. If not, the applicant can appeal against refusal of listed building consent, and again procedures will usually be suspended until the outcome of the appeal is known. Failure to comply with the appeal decision, will result in enforcement action. At the present time it can take over a year to have an appeal heard, so this can also have a profound effect upon intended development, or proposed further sale of the property.

Negligence claims

So, how can this situation be avoided? The simple answer is to not buy a listed building. However, various studies carried out over considerable time show that listed buildings, both commercial and residential, can attract significant premium values both in rent and in resale prices, provided the character is maintained sympathetically. The initial property searches will reveal if the building is listed, and/or in a conservation area. (A current case we are involved in involves the failure of the conveyancing solicitor to inform the purchaser that the property was in conservation area and therefore the intended development, involving total demolition, is in jeopardy.) Searches through the planning file will reveal any listed building consents that have been granted (and applications for consents that have been refused) and what conditions have been imposed. In addition, the conveyancing solicitor will usually obtain confirmation from the vendors that they have carried out no unauthorised works. However, this will not address the issue of any works which were carried out prior to the vendors' ownership. Attempting to bring a claim against the vendor for misrepresentation if he did carry out unauthorised works can often be very difficult. To reduce the risk of costly problems, the listed building consent details should be compared with the building on site.

This may be achieved either by a surveyor qualified in historic building conservation including this duty additionally to the usual structural survey; or the property should be examined by a conservation architect or other suitably qualified professional consultant.

Conservation professionals

The conservation professional should immediately know whether there are suspicious alterations that have been carried out, and can then examine the drawings, schedules and specifications attached to the consent to verify that these have been properly completed on site. This is the only method of reducing the risk. Even so, this may not be foolproof as there are many ways of concealing or disguising 'the unauthorised works'. Although there are many 'generic' alterations that would be generally forbidden in listed buildings, detail is dependent upon each conservation officer's interpretation of PPG 15, the central government guidance on the Act.

It may also be appropriate for surveyors and solicitors to include an appropriate caveat in their reports, specifically stating that they offer no opinion as to whether works carried out upon the property comply with any listed building consent and the Act. Further, if it is known that works have been carried out by the vendor, solicitors acting for purchasers may wish to obtain an indemnity from the vendors for the remedy of any possible unauthorised works.

Ideally, a conservation professional should be engaged to examine the property at the earliest possible time prior to purchase. They can not only appraise the building for possible unauthorised works, but can also advise of acceptability of any proposed alterations by the purchasers, and what steps may be needed to achieve the desired result. This may be fundamental to many decisions to purchase and perceived values, of both commercial and residential properties, can be profoundly affected if purchasers discover that they are unable to achieve their original considered objectives.

Finally, there are still many professional advisers '“ and their clients - who believe that the listing designation is limited to certain aspects of the building only, and that this is somehow related to the grade. Actually, the Act makes no mention of grades at all. The grading system is an administrative convenience originally formulated by the Office of Works and is a guide to status and significance. There is absolutely no substance in the common misconception that the grade II listing refers to the exterior only, nor that the features specifically mentioned in the listing notice are the only items requiring preservation. Everything, in all buildings of all grades, is protected, unless it can be demonstrated that the feature or element is of no significance and does not contribute to the special interest of the building. This applies to buildings or structures attached to the main listed building and to independent structures within the curtilage, if erected prior to 1948. It is essential that professional advisers inform their clients of the status of a protected building and what their responsibilities and liabilities may be, at the earliest stage in the purchase process.

Stephen Levrant is the principal architect of Heritage Architecture Ltd. He would like to acknowledge the invaluable contribution of Mark Harnett, partner at Fladgate Fielder, solicitors, who specialises in conveyancing and planning legislation with respect to listed buildings