Use Class F2 & Sui Generis Properties

Use Class F2 covers a range of property uses aimed at serving the local community. Specifically:

• Shops: These are shops selling essential goods to local residents. To qualify under Class F2, the shop’s premises must be within 280 metres square and not have another similar facility within a specified radius of 1000 metres.
• Community Halls: These are spaces primarily intended for community gatherings, meetings, or events.
• Outdoor Recreation Areas: This includes spaces designated for outdoor sports or recreational activities. These areas typically exclude activities involving motorised vehicles or firearms.
• Swimming Pools and Skating Rinks: Both indoor and outdoor facilities for swimming or skating are covered under this class.

Determining the fair market value of a property falling under Use Class F2 varies based on each specific property. Here are some tips:

• Location Analysis: Evaluate the property’s location. Properties within Use Class F2, such as community halls or outdoor recreation areas, derive much of their value from being centrally located within a community. Consider proximity to amenities like residential areas, transport links, and other community facilities.
• Income Potential Assessment: Since Use Class F2 properties serve community needs, assess their income-generating potential. This may include rental income from community events, membership fees, or usage charges. Recognise any underutilised spaces that could be monetised for additional or increased income streams.
• Cost Approach: Use the cost approach method to determine the property’s value. Factor in the cost of land acquisition and any construction, taking into account any unique features or structures specific to community use. While this method provides a baseline, it may not fully capture the property’s intrinsic value to the community.
• Comparable Sales Analysis: Conduct a thorough analysis of similar properties sold or available in the area. Look for properties with comparable community-focused features and amenities. While direct comparisons may be scarce due to the unique nature of Use Class F2 properties, identifying similar community assets can provide valuable insights into market trends.
• Per-Unit Valuation: For properties divided into multiple units, such as community halls or meeting spaces, consider a per-unit valuation approach. Evaluate each unit’s value based on its unique characteristics and potential contribution to community engagement. Multiply this value by the total number of units to determine the property’s overall worth.

By considering these factors, you can arrive at a fair market value for Use Class F2 properties. It’s important to work with an experienced commercial estate agent familiar with local market dynamics and community needs as they will perform this assessment for you and can offer advice and answer any questions you may have.

When negotiating the purchase or lease of a property falling under Use Class F2, there are several factors you should consider that may help you in negotiations. Here are some key considerations:

• Community Use Restrictions: Given the property will be used for community purposes, it’s essential to clarify any restrictions on use. Ensure that this intended use aligns with local regulations and community guidelines. Additionally, consider any limitations on commercial activities or alterations that may impact the property’s community-focused function.
• Accessibility and Inclusivity: Consider the importance of accessibility and inclusivity within the property. Ensure that the space is designed to accommodate individuals with disabilities and diverse community demographics. Think about the ability to incorporate features such as wheelchair ramps, accessible parking, and inclusive facilities to create a welcoming environment for all members of the community.
• Maintenance and Upkeep: Clarify responsibilities for property maintenance and upkeep between the landlord and tenant or buyer. Given the property’s communal nature, there may be shared responsibilities for maintenance tasks such as landscaping, facility repairs, and cleanliness. Define clear protocols for addressing maintenance issues promptly to uphold the property’s functionality and appeal to the community.
• Community Engagement Initiatives: Ask about any opportunities to integrate community engagement initiatives into the lease or purchase agreement. Consider provisions for hosting community events, workshops, or recreational activities within the property to increase its value as a community asset. Collaborate with local stakeholders to identify potential opportunities and establish guidelines for community use of the space.
• Flexibility for Adaptation: Consider how the needs of the community may change over time and build flexibility into the agreement to accommodate future adaptations where necessary. Consider provisions for modifying the property’s layout or amenities. It’s important to build a relationship with all stakeholders to ensure there is open communication between all parties involved in decision-making when it comes to any adaptations that may be necessary in the future.

In most cases, the landlord is responsible for obtaining permits or approvals for modifications to use class F2 premises. This is because F2 properties are typically intended for specific community uses, and any modifications could potentially impact the suitability of the space. The landlord is likely to want to ensure any changes comply with regulations and maintain the property’s designated use class.

However, the responsibility will be determined by the provisions in the lease, and it is imperative you are aware of your responsibilities prior to signing a lease agreement, if in doubt, your lawyer can advise. In most cases you must also discuss any potential modifications with the landlord before you carry out work to avoid misunderstandings, ensure you aren’t breaking the rules of your agreement, and ensure everyone is clear on the responsibility and costs of obtaining permits.

Since a Use Class F2 property covers a variety of community spaces, the specific insurance needs will vary depending on the exact use. However, there are some general types of coverage you’ll likely want to consider:

• Buildings insurance: This covers damage to the physical structure of the property from events like fire, flood, or vandalism.
• Public liability insurance: This insurance safeguards you in the event of legal action arising from injury or property damage sustained on your premises.
• Loss of rent insurance: This covers you for lost income if your property is unusable due to a covered event.

Depending on the specific use of your property, you might also need additional coverage, such as:

• Employers’ liability insurance: This is required if you have employees, such as cleaners or security personnel.
• Cover for specialised fixtures and fittings: This could be necessary for features specific to your property’s use, like glass windows in a community hall or equipment at a sports facility.

Consult with a qualified insurance professional can ensure you have the most suitable coverage for your property.

Sui Generis refers to buildings or uses that don’t neatly fit into any existing Use Class categories within the planning system. These categories define the type of activity that can take place in a particular building.

Because Sui Generis properties don’t fit neatly into existing Use Class categories, changing the purpose of a building to a Sui Generis use often requires a planning application. This application process allows the local authority to carefully evaluate the proposal, considering factors like potential noise generation, traffic impact, and the overall effect on the surrounding area.

Here are some examples of properties that fall under the Sui Generis use class:

• Entertainment Venues: Places like theatres, cinemas, concert halls, bingo halls, and nightclubs typically fall under Sui Generis. These properties have unique uses that don’t fit neatly into existing categories like offices or retail.
• Petrol Stations and Car Washes: These facilities involve activities with specific storage and safety considerations, making them distinct from general commercial uses.
• Bookies, Casinos and Gambling Establishments: Casinos and betting shops have a unique purpose and potential social impacts, placing them in the Sui Generis category.
• Large Houses in Multiple Occupation (HMOs): While smaller HMOs (with up to 6 occupants) fall under Class C4 (residential), larger HMOs with 7 or more occupants are considered Sui Generis due to the potential for increased occupancy and impact on the surrounding area.
• Other Unique Uses: Properties like amusement arcades, waste disposal facilities for hazardous materials, and taxi businesses can also fall under Sui Generis depending on their specific activities and potential impact.

It’s important to note that this is not an exhaustive list, and the specific categorisation of a property can vary depending on local regulations.

Use Classes do offer flexibility, but there can still be situations within Use Class E (commercial, business and service) or F (learning and non-residential institutions) that might require a formal change of use application. Here are some specialist uses to consider:

• Material Change of Use: Even within Use Class E or F, a significant change in the character of the use might require a planning application. This concept is called “material change of use.” For instance, a small office converting to a large call centre with significant noise generation could be considered a material change.
• Conditions on Existing Permissions: Sometimes, previous planning permissions for a property within Use Class E or F might have specific conditions attached.  If your proposed use conflicts with these conditions, you might need to submit a new application.
• Impact on Listed Buildings or Conservation Areas: If the property you’re considering a change of use for is located in a conservation area or is a listed building, even minor alterations within Use Class E or F might require planning permission. This ensures the proposed use doesn’t negatively impact the historical or architectural character of the area.
• Sui Generis Uses Within Use Classes: While uncommon, there can be specialist uses that fall under Sui Generis even within the broad categories of Use Class E or F. For example, a large crematorium within Class E (though technically a business service) might be considered Sui Generis due to its unique operational needs and potential impact on the surrounding area.

You should always check with your local planning authority or a planning expert for any specific requirements or considerations related to your intended use, even if it falls within Use Class E or F.

We provide comprehensive services for landlords looking to lease properties for specialist uses. We understand the unique requirements of this niche market and tailor our approach to maximise the appeal of your property to specific tenants. Here’s how we can assist:

• Marketing Strategies: We develop targeted marketing strategies to attract specific tenants, using our extensive network and expertise. This includes creating tailored marketing materials highlighting the unique features and suitability of your property for specialist uses.
• Tenant Matching: We use our database of applicants and contacts to match your property with potential tenants seeking specialist premises. This includes reaching out to relevant organisations, charities, and individuals looking for properties for specific purposes.
• Off-Market Opportunities: We actively seek off-market opportunities and approach our network of applicants to identify potential matches for your property. This proactive approach often leads to successful deals that may not have been otherwise available through traditional channels.
• Negotiation and Deal Structuring: We handle negotiations with prospective tenants, ensuring terms are favourable to you while meeting the needs of the tenant. This includes structuring lease agreements to accommodate specific requirements and arrangements for specialist uses.
• Consultancy: We offer consultancy services to landlords seeking to redevelop or repurpose properties for specialist uses while retaining community benefits. Our expertise in understanding the needs of occupiers in terms of space, feasibility, and specific requirements can be invaluable during the planning process.
• Full Support Through Completion: From initial appraisal to completion, we provide full support and guidance to landlords, ensuring an efficient leasing process. Our team is dedicated to maximising the value of your property while meeting the demands of the specialist market.