Article

Section 106 agreements and conditioning planning permission

Delays in obtaining planning permission is a serious problem for developers at the coal face as they seek to meet the government’s drive to provide more housing in the south-east. Much of this frustration occurs where a resolution to grant planning permission is granted pending the conclusion of a planning agreement under section 106 of the Town & Country Planning Act 1990. Nearly all s.106 obligations arise as a result of requirements of the planning authority in determining planning applications. The developer will know that without the s.106 agreement, his application is likely to be refused. The benefit of s.106 obligations to the local planning authority is that they secure certain benefits which cannot be secured by way of planning conditions such as financial contributions towards highway improvements, community facilities or new schools. The problem with this is that it makes the planning process dependent upon private interests because the s.106 agreement has to be completed by all persons with
a relevant interest in the land. In other words it will not necessarily be the planning applicant who negotiates and concludes the planning agreement. Persons with an interest in land may include not just the landowner, but any tenant of the landowner and their respective mortgagee. Furthermore, on a large site assembly, there may be multiples of such interested parties inevitably delaying the grant of planning permission even though the conditions attached to the planning permission will already be known.

To expedite the planning process, some planning authorities have started to issue planning permissions conditioned to cater for the subsequent completion of a planning agreement. In other words, planning permission is granted with a condition that a s.106 agreement be completed afterwards. But is this legal? Section 72 of the Town & Country Planning Act 1990 contains a general power to impose conditions on permission regulating land for development or use of land. Although couched in wide
terms, this power has been curtailed by judicial decisions, so that a planning condition:

(a) Must be imposed for a planning purpose;
(b) Must fairly and reasonably relate to the development permitted by the permission;
(c) Must not be so unreasonable that a reasonable planning authority could not have
imposed it.

Guidelines on planning conditions are also contained in circular 11/95 and most local authorities adopt the model conditions set out in the circular. Paragraph 13 of circular 11/ 95 advises against obliging a land owner to complete a s.106 agreement by way of a planning condition. The guidance in paragraph 13 is unambiguous implying that conditioning planning permission in this way must inevitably fail. Certainly, the imposition of a positive obligation on a landowner would be unlawful, but what about a negative obligation?

In Grampian Regional Council v City of Aberdeen DC in 1984, a condition that required certain off site highway works to be carried out to a certain course level before implementing the planning permission was held to be lawful. In other words, a condition precedent had to be satisfied before planning could be
commenced. So what is the difference between this example and a planning condition that says that there is to be no development until a planning obligation under s.106 relating to the land has been made and is lodged with the local planning authority in a form approved by the local planning authority? Such a condition does not oblige the landowner to enter into a planning agreement; it merely stipulates that a planning agreement must be concluded before the planning permission is implemented. Furthermore, provided the condition satisfies the tests of enforceability and precision required by paragraphs 26 and 30 of circular 11/95, then there would appear to be no reason to challenge the grant of planning permission. On a cautionary note, however, although any initiative to expedite the planning process should be warmly applauded, it will not be until the conditioning of planning permission is challenged in the courts that we can be certain that such consents are lawful. If the planning applicant requires
certainty, then he should insist on planning permission only being granted once the planning agreement has been completed, with all the delays and frustration this causes.

For further enquiries please contact Nick Horton (view full profile) on 01892 701313 or email nhorton@ts-p.co.uk.

You will require the Adobe Acrobat Reader to read PDF files, this is free to download if you do not already have it. Get Adobe Reader