A blog about planning, planning law and planning policy


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Consultation on speeding up section 106 agreements

sign here pleaseThe Government issued this consultation last Friday, 20th February. The period closes on 19th May, so a rapid response is necessary.

The proposals in brief are:
1 Issue new guidance emphasising the need for speed, early engagement and use of standardised clauses.
2 A system for resolving disputes about s.106 agreements.

It is good to see encouragement on the use of standardised clauses. The Law Society issued a model s.106 agreement in 2006, followed by a second edition in 2010. The 2006 edition was endorsed in Circular 5/2005. It would be good to see new official encouragement to use the model.

What about dispute resolution? I want to highlight two things – the consultation asks whether resolution of the planning agreement should include the grant of planning permission and which bodies would be appropriate to adjudicate.

Can you resolve the s.106 without resolving the application? The terms of the permission and its conditions are often affected by what is in the s.106. Some matters can be dealt with by either mechanism, for example a restriction on opening until a construction contract is let. That was in a s.106 in the case of Derwent Holding v. Trafford BC (1), but where demolition of listed buildings is concerned the statute says use a condition to ensure a construction contract is let. If it is needed it needs to be in one or the other and what we don’t want is inconsistent provisions in both. In complex developments, clauses in s.106s are used in combination with conditions to resolve difficult issues. So the two need to be settled together.

But more importantly, what is to happen if the permission issued is different from what the parties expect, or indeed is delayed, or not issued at all? The Law Society’s model is largely conditional on the issue of the permission in a form attached to the s.106, and also conditional on implementation of the permission which can help. But that is in the context of “agreement”. In a case where the planning authority “loses” the dispute resolution, there is a stronger possibility of a non-compliant permission, or delay, or refusal. The applicant has a right of appeal against refusal, whether express or deemed, but there will be delay and in the meantime circumstances may have changed. The s.106 agreement however will have been signed, perhaps many months before, and given that the parties have just fought an appeal, the desire to renegotiate it is not likely to be found on both sides.

If we are to have a dispute resolution mechanism for s.106s, who should adjudicate? There are two areas of conflict; content and legal drafting. Lawyers are used to addressing both. Planning solicitors draft s.106 agreements day in, day out, and we should recognise that some of the delays come from having to draft in the current unhelpful statutory framework. They should hold the necessary expertise, especially members of the Law Society’s Planning Panel, and be the first choice for dispute resolution.

Section 106 agreements are used much more now than they were 25 or so years ago, when s.106 was last given a fundamental overhaul by the Planning and Compensation Act 1991. Government needs to recognise that they are not simple documents. They affect the title to the land and need to be negotiated and drafted properly. The 1991 reform introduced quite unnecessary complexities which are still causing problems for practitioners (see my comments on Savage v. Mansfield (2) for a recent example).

Regulations 122 and 123(3) of the CIL Regulations 2010 making the policy tests law and restricting pooling have made matters even worse. The Planning Inspectorate has found it necessary to require confirmation that s.106s are properly executed, which reflects concerns about whether the presumptions of due execution lawyers rely on in sales and purchases apply to s.106 (there is no obvious “sale” particularly not of a planning permission). It is not possible to carry out a search of the Land Registry with priority either, as priority is not conferred where there is no purchase of land. And there are some problems which are not well known. These issues need to be addressed.

But as everybody knows it is the negotiation of affordable housing provisions which regularly delays and complicates s.106 agreements. The 1991 reforms limited what can be done in a s.106 and they make it difficult to draft for affordable housing. If these provisions could be turned into money payment provisions that would greatly speed things up. But that is not attractive to developers who when on-site can build more cheaply than an affordable housing provider. And as long as the State is not going to build housing itself, is not attractive to local or central government.

These documents secure important benefits for authorities, and if they are not right, the community will lose out, and the planning permission will become voidable.

The consultation is open until 19th March and can be read here.

(1) [2011] EWCA (Civ) 832
(2) [2015] EWCA Civ 4

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