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Invalid Planning Agreements – Secretary of State’s decision quashed because the s.106 wasn’t a s.106.

eric picklesA planning agreement has been found invalid and the planning permission it supported has been quashed in the recent case of Westminster City Council v. Secretary of State (27th March 2013). It is a salutary case.

The SofS granted permission on appeal. There was a deed submitted and claimed to contain planning obligations. They were:

1              Not to apply for a parking permit

2              To notify prospective owners that they will not be entitled to apply for a parking permit

3              That leases of the property will contain a covenant in favour of the lessor and Westminster City Council not to apply for a permit, and

4              To send the council a copy any lease granted.

In an admirably clear and short judgment the Court held this was not within s.106(1) and was therefore not a planning obligation. Nor of course would it run with the land.

As a consequence the permission was quashed as the Secretary of State had taken it  into account.

So the lesson for applicants and appellants is to ask whether the promises you want to put into your planning agreement do fall within s.106. For example, will that promise to comply with a travel plan fall within s.106?

Planning authorities will want to ask themselves the same question. In the Westminster case, it is interesting that the validity point was not taken at the planning appeal. It was not raised until they made the High Court challenge.

But there are also lessons for the Secretary of State.  His Inspector granted permission in his name on the basis of a set of promises which were not s.106 obligations. They were unenforceable against successors in title. The Inspector spent time checking that they met the  old policy tests in Circular 5/05, now unhelpfully turned into restrictive legal tests by Reg 122 of the CIL regulations. But he failed completely to consider the basic point: were they actually under s.106 at all?  Because if they weren’t they would be unenforceable once the property was sold. But if s.106 had not been rewritten in 1991 by the Planning & Compensation Act this problem would not have happened. The previous wording, in s.106 as enacted in 1990, and its predecessor, s.52 of the 1971 Act, was much wider.

It is over 10 years since I raised points like these in “Planning obligations, ideas for reform” and the Law Society’s Planning and Environmental Law committee has raised them several times, recently urging the Government to include reform in the latest planning bill.  But DCLG and its predecessors resolutely refuse to address the problem. Their current view is that planning authorities and applicants should get proper advice,  and if they make mistakes that is their own look-out. But this ignores the uphill struggle experienced by those who get and give proper advice. They are faced with surprise and incomprehension when they raise the question of whether the promises are within s.106 and try to draft to keep within its boundaries.  And when drafting within the boundaries it is not always easy to produce something which is workable.  The judge in the Westminster case was shown drafting which did meet s.106’s constraints and commented that the result was draconian. It required use of the dwelling to cease if anyone applied for a car-parking permit. The judge doubted the court would eject a family for such a breach.

DCLG also keeps saying that ministers are not interested in s.106 as we now have CIL.  But CIL does not totally replace s.106.  Planning agreements are still appropriate and needed for on-site issues and not all councils – 25%I recall – are expected to introduce CIL

The Inspectorate itself, staffed by experienced planning professionals, has failed to spot a fundamentally flawed planning agreement. Westminster City Council also failed to spot it until the last minute.

The result is the waste of several thousands of pounds of taxpayers money in legal fees quashing the Secretary of State’s decision.   Westminster’s costs will of course have to be met by DCLG.

The failure of DCLG to amend s.106 wastes the time and money of landowners, developers, planning authorities and now Central Government which will have to pay Westminster’s costs.  Surely DCLG will now see the wisdom of addressing the problems of the straitjacket which is s.106.

4 comments to Invalid Planning Agreements – Secretary of State’s decision quashed because the s.106 wasn’t a s.106.

  • […] The case is R (oao Khodari) v. The Royal London Borough Council of Kensington and Chelsea, reported at [2015] EWHC 4084. decided on 18th November 2015. It was less than three years earlier that the same point came up, with the same result, in Westminster City Council v. Secretary of State. I posted about it here. […]

  • Steve Monmouth

    Where a Local Authority intends to impose a S106 but fails to reference it as a condition within the associated Planning Decision, whether or not it’s ‘entered into’ is it still valid?; I think I’ve recently stumbled across one that falls into this category.

  • Steve Monmouth

    Take the London Borough of Richmond. There, s106 Agreements and (to a lesser extent) Unilateral Undertakings are widely used to impose Parking Permit restrictions. I can easily check the numbers, but at a guess (and a conservative one I’m sure) there might be some 100 agreements covering say 400 residences. Are these all now invalid?

  • Very interesting and a lesson for all concerned, for my sins I took a dislike to the way some LPAs impose local occupancy restrictions via S106 and now spend half my time taking them apart, sometimes with the assistance of a planning inspector who in my opinion should engage a lawyer such as yourself.

    Is an occupancy restriction a planning obligation?

    Are price and tenure controls a planning obligation?

    Would anybody like to read some of the agreements I am sent by owners who struggle to sell or buy these dwellings?

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