Background
Herod Property Ltd converted an office building at 32 Palace Court, Bayswater, into five flats under permitted-development rights following prior approval from Westminster City Council. It began work in late 2023 without submitting a notice of chargeable development, assuming liability or commencement notice. Herod considered that CIL should be nil because there was no uplift in floorspace and the building qualified for the in-use floorspace deduction.
In August 2025, after learning of the conversion and sales of flats, Westminster issued a notice of chargeable development, a liability notice for £294,959.75, and a demand for £380,326.30 including surcharges and interest. The notices mistakenly described Transport for London, rather than the Mayor of London, as recipient of the Mayoral CIL share. Herod sought judicial review, alleging inadequate inquiry, failure to apportion liability among later flat owners, unlawfulness in issuing the notices, and invalidity from that error.
The Court’s Holding
Sir Tim Kerr dismissed the claim. A developer may decide that the zero-CIL exception applies and therefore need not submit a notice of chargeable development or commencement notice. But that decision does not bind the collecting authority. A developer that proceeds without engaging the authority assumes the risk that the authority will later determine liability, use its statutory deeming powers where information is inadequate, and that review and appeal rights will have been lost once development has commenced.
Westminster had acted lawfully and rationally. It was not required to conduct extensive investigations to establish Herod’s claimed in-use deduction or to identify owners not known to it. CIL liability crystallised when development commenced, when Herod was the sole owner; later purchasers of individual flats did not acquire apportioned CIL liability. The misidentification of TfL caused no prejudice, did not invalidate the notices, and would in any event not have changed the outcome. The court also held that the statutory review and appeal route was an adequate alternative remedy.
Key Takeaways
- A developer’s belief that CIL is nil does not prevent a collecting authority from later assessing CIL where the developer has not supplied the relevant evidence.
- CIL liability attaches at commencement, not when a notice of chargeable development or liability notice is later issued.
- Collecting authorities need not investigate extensively to establish an in-use floorspace deduction for a silent developer.
- A non-prejudicial mistake in identifying the recipient of part of CIL will not necessarily invalidate CIL notices.
Why It Matters
The decision stresses the practical risk in commencing permitted development without first resolving CIL with the collecting authority. Developers relying on a nil-liability calculation should provide the supporting plans and occupation evidence before works begin, preserving the statutory review and appeal process if the authority disagrees.
For authorities, the judgment confirms that the CIL regime does not ordinarily impose an open-ended investigative duty to uncover evidence that the developer could have provided.