The Consultation on the Renegotiation of the Section 106 Agreement

    The Consultation on the Renegotiation of the Section 106 Agreement

    The Government is set to further reform the planning system, with two separate changes to legislation designed to tackle developments which have stalled due to unviable Section 106 agreements.

    As it currently stands, applicants and local planning authorities are free to negotiate changes to Section 106 agreements where both parties are in agreement.  However, only after a period of five years can a formal application be made to the local planning authority to discharge or modify obligations within a Section 106 agreement.  If the application is refused there are legal provisions to appeal against the decision of the local planning authority.

    The recently published consultation on the ‘Renegotiation of Section 106 Planning Obligations’ proposes changes to the Regulations governing the time periods for formal applications for the discharge or modification of Section 106 agreements.  The draft Regulations would enable the submission of a formal application for the discharge or modification of Section 106 obligations in agreements which were signed on or before 6 April 2010.  For those after this date the existing five year rule still applies.

    The fundamental principles that will underpin negotiations relating to the modification of section 106 planning obligations will remain as set out in Section 106A, i.e that the obligation must ‘no longer serve a useful purpose’ or that ‘it continues to serve a useful purpose... equally well’ if it is to be modified.

    In a further proposed change outlined in a Written Ministerial Statement by Eric Pickles on 6 September 2012, the Minister announced that new legislation would be introduced in early 2013 which “will allow any developer of sites which are unviable because of the number of affordable homes, to appeal with immediate effect”.  In what appears to be a very bold statement of intent the Minister goes on to state that “the Planning Inspectorate will be instructed to assess how many affordable homes would need to be removed from the Section 106 agreement for the site to be viable in current economic conditions. The Planning Inspectorate would then, as necessary, set aside the existing Section 106 agreement for a three year period, in favour of a new agreement with fewer affordable homes.”

    The changes proposed will open the door for the renegotiation of Section 106 agreements on a number of schemes which did not previously qualify.  Ministers have claimed that the move could unlock 75,000 homes in projects that are currently stalled, and judging by the very robust language in his Written Statement, it is clear that that Secretary of State is committed to supporting the delivery of existing planning permissions.

    Consultation on the ‘Renegotiation of Section 106 planning obligations, consultation’ document published by the DCLG August 2012 runs from 13 August to 8 October 2012. The document can be accessed via the following web link:
     
    http://www.communities.gov.uk/documents/planningandbuilding/pdf/2196058.pdf

    The Written Ministerial Statement can be accessed at:

    http://www.communities.gov.uk/statements/corporate/housingandgrowth

     
     

    Key contacts

    Nick Matthews

    Nick Matthews

    Director
    Planning

    Savills Bristol

    +44 (0) 1179 100 364

    +44 (0) 1179 100 364

     
     

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