All commercial properties are covered under the Town and Country Planning (Use Classes) Order 1987, which splits all business properties and land into a category – or ‘class’ - depending on how it is to be used.
Before any commercial transaction, it is important to see what class a premises falls under so you can see which use is allowed at the site, and if any changes to another use class will be required. If the class is determined, a business can avoid being shut down or having their opening delayed if reclassification is required from the local council.
Buyers will oftem find that the majority of neighbouring businesses will have different classes. For example, an estate agent in a shopping centre will fall under Class A2 (financial services), even though its surrounding shops will be under class A1 (retail stores).
Here is a summary of all the commercial property classes, and what changes can be made without any planning permission being needed by the local council:
It is important to note that nothing listed below is definitive; classes are continually changing, therefore, it is important to do as much research as possible and seek professional advice whenever in doubt.
A1
Class: Shops
Retail stores, travel agents, post offices, dry cleaners, domestic hire stores, hairdressers, cold food bars, internet cafes and retail warehouses.
What can this class be changed to? Not allowed except for a mixed use of a shop and a flat, or vice versa.
A2
Class: Financial Services
Financial institutions such as banks, building societies and bureau de change, betting shops, estate agents, employment agencies and professional services (except health or medical services).
What can this class be changed to? A1
A3
Class: Restaurants and cafes
Restaurants, cafes and snack bars.
What can this class be changed to? A1 or A2
A4
Class: Drinking establishments
A pub or bar; the primary use being the sale and consumption of the alcoholic drink on the premises.
What can this class be changed to? A1, A2 or A3
A5
Class: Hot food takeaway
Sale and consumption of hot food on premises.
What can this class be changed to? A1, A2 or A3
B1
Class: Business
Offices outside of Class A2, research and development laboratories, studios and the lighting industry.
What can this class be changed to?
B8 if no larger that 235 sq m (the UK government is currently working for the C3.
B2
Class: General Industrial
General Industrial if not classed in B1 B1, or B8 if no larger than 235 sq m B8 Storage and distribution Storage and distribution centres.
What can this class be changed to? B1 if no larger that 235 sqm.
C1
Class: Hotels
Hotels, guesthouses and boarding houses.
What can this class be changed to? Not allowed
C2
Class: Residential Hospitals, nursing homes, residential schools and training centres.
What can this class be changed to? Not allowed
C2a
Class: Secure Residential
Prisons, young offenders institutions, detention centres, secure training centres, scure hospitals, local authority accommodation, military barracks, short-term holding centres or custody centres
What can this class be changed to? Not allowed
C3
Class: Dwellings
Places for individuals and families to live; no more than six people.
What can this class be changed to? Not allowed
D1
Class: Non-residential institutions
Medical and health services, education and training centres, creche, day nursery, libraries, public halls, museums, art galleries, exhibition halls, places of worship and law courts.
What can this class be changed to? Not allowed
D2
Class: Assembly and Leisure
Cinemas, concert halls, bingo halls, sports halls, swimming baths, skating rinks, gymnasiums, and any other indoor and outdoor sport facilities.
What can this class be changed to? None allowed
General
Any other commercial sites such as petrol stations, arcades, nightclubs, theatres, hostels, casinos, laundrettes and scrap yards.
What can this class be changed to? None allowed except casinos to D2
When is planning permission required?
If you want to change the class of a commercial property, you will need planning permission. If the property has planning permissions, it will be detailed out in the Heads of Terms (HOTS), which is exchanged in a commercial property transaction to identify and highlight the requirements of both the seller and the purchaser of the property.
If the property does not have planning permission for the use you would like, and the class cannot be altered, then you need to formally apply for planning permission from your local council.
On a side note, if the lease for the property has been signed, and the local council is not allowing the business to operate due to the wrong class use, the landlord still has a legal right to receive rent from the tenant.
The planning application process takes a minimum of eight weeks to process (often considerably longer to complete).
Even though the change of use application itself is quite simple, a full planning application may need professional input, such as highway or asbestos surveys.
If you are making major changes to the property, other professional services you may need include architects, planning experts, structural engineers, building contractors, space planners and surveyors.
Local zoning laws
Another factor to consider is the local zoning law around the property. Also called ordinances, these laws will state what activities can be carried out in a specific region, area or municipality.
This means that areas in a city can be zoned for industrial, commercial or residential use and development. Before even applying for planning permission, you need to see what the local zoning laws are in your property's location, as they could limit what you can achieve.
Your local council will regulate land use through planning permission. There are 421 Local Planning Authorities (LPAs) in the UK, and they are usually a local borough or district council. For mining, minerals or waste disposal, county councils will manage matters in rural areas, while national park authorities regulate planning permission in national parks.
It is worth checking your local council's website as many of them often have information and zoning ordinances online. Contact your council and ask for a zoning map, which will make it clear what laws are in place for your property. Be sure to ask any questions you have about the laws and how they may affect you.
If you are planning a business that goes against zoning laws, you can get an exception, known as a 'variance'. You may need to meet a zoning officer and have a specific timeframe, so see what options are open to you.
