contract and subsequently. The facts were that Mr and Mrs James purchased the property in 2019. They planned to construct a new home on the site to reside in. It was the culmination of years of planning after they decided to move from Essex to Devon. They paid an additional 3% stamp duty surcharge for a second residential property. They sold their house in Essex and moved to Devon and reclaimed the additional stamp duty surcharge. They now owned one house and lived in a caravan on the site during construction. They registered with the local GP and were put on the electoral register. The property was designed to Mr James' personal specification. While they said that, at the time of the contract, they intended to live in the property, they did accept that it was always their intention they would let the property out during holiday periods – about 13 weeks of the year – to repay the financing of the property. The project’s architect, David Plant, who had known Mr and Mrs James for years, had provided a witness statement confirming that they intended to live in the property.
RBH relied on several points:
• Mr and Mrs James did not occupy the property at the date of the contract and never occupied it and had since admitted that they did not intend to occupy it in the future. • Mr James was a property developer. • One of the two owners of the property was a limited development company. Therefore, it could not be a residential occupier, and it was not sufficient that one of two co-owners intended to occupy the property. • Any intention to occupy was conditional upon repayment of the loan – that was not a sufficient intention to satisfy s106. • They intended to rent it out for 25% of the year – that meant it was not ‘principally’ occupied as a residence. • The planning document referred to the property as being for ‘market sale’ as opposed to ‘self-build’, demonstrating the property was intended to be sold. The court did not agree that any or all of these features prevented the James’ from being residential occupiers for the purposes of s106. The court applied Coulson’s ‘common sense’ approach. As to the meaning of the word ‘principally’ in s106, the court found it was being construed out of context and a let for 13 weeks a year would not take it outside the Section. The court said that RBH was ‘on firmer ground’ in referring to the terms of the development loan which enabled Mr and Mrs James to finance the development of the property and in which they agreed not to occupy the property as a residence. However, the court held that this did not make any occupation unlawful (as had been held to be
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