Taking a commercial lease before planning is settled

Sign a commercial lease before the planning position is settled and you take on the rent, the repairing obligation and the planning risk together. The fix is a conditional structure: an agreement for lease with a planning condition precedent, a defined standard for an acceptable permission, and a timetable that reflects the statutory determination periods and the appeal deadline rather than the landlord's preferred completion date.

Do the planning checks first, because three of them can kill a deal in an afternoon.

The planning checks to complete before signing

Work through these in order, before heads of terms are agreed if possible.

1. Establish the existing lawful use of the premises from the authority's online planning register, not from the letting particulars or the lease. The two frequently disagree.
2. Read every condition on the most recent permission. Hours of opening, a restriction to a named use class or sub-class, a cap on the number of covers, delivery hours and parking allocation all survive the change of tenant.
3. Confirm whether the use you intend falls within the same use class. A move within Class E is not development, while anything into or out of a sui generis use needs permission.
4. Check for an Article 4 direction covering the premises, which can remove permitted change rights you were relying on.
5. Search for enforcement history and any live notices. A breach of condition notice or an enforcement notice attaches to the land.
6. Check listed building and conservation area status, which changes what the fit-out can do to the shopfront.
7. Identify every element of the fit-out that needs its own consent: extraction, plant, signage, shutters, a new shopfront, mezzanine floors.
8. Separate the licensing questions. A premises licence, a pavement licence and a street trading consent are different regimes with their own timescales, and planning permission does not deliver any of them.

Where the existing use is unclear, a certificate of lawful existing use or development settles it, and the fee and the few months it takes are small against a rent commitment.

Conditional contracts and planning condition precedent

An agreement for lease conditional on planning is standard practice and only works if the drafting is specific.

Define what counts as a satisfactory permission. A permission is not useful if it carries conditions that make the business unviable, so the agreement should list the conditions that will be treated as unacceptable: opening hours shorter than a stated time, a restriction on the sub-class of use, a prohibition on extraction, a cap on covers below a stated number, a financial obligation above a stated figure.

Then settle five mechanics.

Who prepares and submits the application, and who approves it before submission. The party paying for the fit-out usually wants control of the design, and the landlord usually wants approval of anything that binds the building.

Who pays the fees, the consultants and the cost of any obligation.

What standard of effort applies. Reasonable endeavours and all reasonable endeavours mean different things, and the gap between them matters when the application needs an appeal.

Whether an appeal is required, optional or excluded, and who funds it.

What happens at the long stop date, including whether either party can waive the condition and proceed anyway.

Who applies and who owns the permission

Planning permission attaches to the land, not to the applicant. A tenant who obtains permission at its own cost confers a benefit on the landlord's asset, which is worth recognising in the commercial terms.

A tenant applicant must serve notice on the freeholder under the ownership certificate provisions, so the landlord will know about the application whatever the lease says. Most leases also require landlord consent before applying, and a licence to make the application is the cleaner route.

Two points frequently missed. Where the landlord applies, the tenant has no control over the conditions accepted, so the agreement should give the tenant approval rights over the application and over any amendment negotiated with the officer. And where the tenant applies and the deal then falls through, the permission stays with the property, which is an argument for the landlord contributing to the cost.

Time limits for determination and appeal in the contract timetable

The statutory determination periods are eight weeks for a minor application and thirteen weeks for a major, running from validation rather than from submission. Extensions of time are routinely requested by authorities where consultee responses are outstanding, and refusing one usually produces a refusal rather than a decision.

The appeal deadline for most applications is six months from the decision. Written representations appeals take months rather than weeks, and a hearing or inquiry takes longer.

Build the timetable backwards from that. A long stop date of six months from exchange assumes a first-time approval with no extension of time and no appeal, which is optimistic for anything involving extraction, highways or a heritage asset. Nine to twelve months with a tenant break right at six months is a more realistic structure.

Allow time before submission as well. Pre-application advice, a measured survey, an acoustic survey over a working week and an extraction design all take time, and the application cannot be validated without them.

Fit-out works that need separate consent

The use is only half the problem. Fit-out elements commonly need their own permission, and each has its own lead time.

• Extraction and odour control where food will be cooked, supported by a Ventilation/Extraction Statement giving the discharge point, termination height, filtration and fan noise.
• External plant: condensers, chillers, air handling units, with an acoustic assessment against a measured background level.
• A new or altered shopfront, which in a conservation area or on a listed building is usually the hardest consent to obtain.
• Illuminated signage, which needs advertisement consent as a separate application.
• Security shutters, which are often resisted in solid form on a retail frontage.
• A mezzanine, which can constitute development where it adds floorspace above a threshold.
• Internal alterations to a listed building, which need listed building consent regardless of how minor they appear.

Where the premises are being taken for a different trading format, the planning tests can shift in ways that are not obvious from the use class alone, as cash and carry to trade counter shows. Reusing a vacant retail unit for a leisure format raises its own frontage questions, covered in indoor golf and simulator venues in vacant retail.

Enforcement risk inherited with the premises

Planning liability follows the land and the person in control of it. Take a lease over premises operating in breach and you become the person the authority serves notice on.

Three risks are worth pricing.

An existing unauthorised use. Immunity for a change of use arises only after the relevant period of continuous breach, so a use established three years ago is still enforceable against, and the tenant inherits that exposure.

An unauthorised structure. A flue, a plant enclosure or a mezzanine installed without consent may have to be removed, at the tenant's cost if the lease puts alterations and compliance obligations on the tenant.

A breach of condition. There is no appeal to the Planning Inspectorate against a breach of condition notice, so the position cannot be argued out later.

A landlord indemnity is worth having and is not a substitute for diligence, because an indemnity from a special purpose vehicle with no assets is worth what the vehicle is worth.

A practical pre-signature checklist

• Planning register printout for the premises and the two adjoining units, dated.
• Copy of the most recent decision notice with the conditions highlighted.
• Written confirmation from the authority of the lawful use, or a certificate application in progress.
• Article 4 and designation check completed by address.
• Enforcement enquiry answered in writing.
• Schedule of every fit-out element with the consent it requires and its lead time.
• Licensing timetable mapped against the planning timetable.
• The agreement for lease defining a satisfactory permission, with the unacceptable conditions listed.
• A long stop date with a realistic allowance for an extension of time and an appeal.
• Agreement on who applies, who approves, who pays and who appeals.

A short Planning Statement prepared while the lease is being negotiated usually sharpens the commercial discussion, because it forces both sides to say what the application will actually ask for.

This is general guidance, not legal advice. Check the position with your local planning authority or a qualified professional before relying on it, and take legal advice on the lease documentation.

Enter the unit's postcode on PlanScope to see which documents a change of use and fit-out are likely to need. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.