Home Legislation & Tax Section 106 Agreements and Section 73 Applications – A Reminder for Local Planning Authorities

Section 106 Agreements and Section 73 Applications – A Reminder for Local Planning Authorities

by LLP Reporter
2nd Oct 20 2:33 pm

Solicitor Kayleigh Chapman, in Blandy & Blandy’s leading Planning & Environmental law team,looks at why Local Planning Authorities may need to take a closer look at to existing Section 106 Agreements.

A recent High Court decision highlights the need for Local Planning Authorities to carefully examine previously completed Section 106 Agreements in the context of new Section 73 Applications.

As explained in a previous blog, Section 73 of the Town and Country Planning Act 1990 allows developers to make planning applications “for the development of land without complying with conditions subject to which a previous planning permission was granted”. If such an application is granted then the developer has the benefit of two planning permissions, each of which could be implemented and built out by the developer.

In Norfolk Homes Limited v North Norfolk District Council & Norfolk County Council [2020] EWHC 2265 the question before the High Court was whether a Section 106 Agreement completed in respect of a 2012 planning permission could be held to apply in respect of development permitted under Section 73 Planning Permissions granted and 2015.

The Section 106 Agreement completed in 2012 and which related to the 2012 planning permission secured 45% on-site affordable housing and a number of financial contributions. It is easy to see therefore why the Council sought confirmation that those obligations applied to the development permitted under Section 73 in 2015.

The 2012 Section 106 Agreement did not include any express wording which provided that the obligations contained therein would apply to any development permitted under Section 73. Further the 2015 Section 73 Planning Permission made no reference to the 2012 Section 106 Agreement.

The High Court held that “on a true construction of the language used in the 2012 agreement, the obligations it contains are not triggered by the carrying out of development under the 2015 permission”. The Court did not consider it possible to interpret the Section 106 Agreement in a way that would enable the obligations to apply to the 2015 permission, neither did it consider that implying certain wording would be reasonable in the circumstances.

Accordingly, if the developer does not apply for another Section 73 application but instead builds out the 2015 permission the provision of 45% affordable housing would not bite.

Commentary

Some local planning authorities have standard wording in their Section 106 Agreements which confirms that the terms of that Agreement would apply to any development permitted under a Section 73 Application. Other local planning authorities do not follow that approach. In either case it is clear that where a Section 73 Application is submitted local planning authorities should be reviewing any previously made Section 106 Agreement to ensure that any obligations continue to apply, and if not (or if the Section 73 Application gives rise to the need to alter those obligations) then it should ensure that a new Section 106 Agreement or a Deed of Variation is entered into and completed prior to the grant of that Section 73 planning permission.

Where developers have secured a Section 73 permission(s) but have not agreed to any further Section 106 Agreement or Deed of Variation they will undoubtedly be seeking advice as to whether the obligations in the original Section 106 continue to bite in respect of the Section 73 permission.

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