Speeding Up Section 106 Agreements

It is a rare occasion that you will hear a developer praising their lawyers or a local planning authority for the speed at which their Section 106 was completed following a resolution to grant planning permission. More likely, the experience will be long and drawn out and not entirely painless. There are many reasons why Section 106 agreements take so long and we are often asked to deconstruct the process to avoid a repeat experience. The reasons are many and varied but the usual summary is, that the terms of the agreement could have been considered in a lot more detail much earlier on, with a lot more engagement with Council officers. This is not always a realistic approach but certainly a laudable aim.

What the Government have now come to realise is that delays in completing section 106 agreements are a major blocker on economic development. Despite the aim to reduce the scope of the obligations through introduction of the Community Infrastructure Levy, the need to improve the process remains. DECC have produced a consultation (February 2015) inviting comments on how to speed up the system.

So how will the Government solve the problem of delay? Well, some ideas include standard precedent clauses, statutory timescales for agreement, deemed acceptance of agreements if not agreed within a prescribed period (very much like the deemed acceptance of pre-commencement planning conditions which has just come in under the Infrastructure Act) and the big one, a “planning obligations court”. Apologies, this last one is not actually a new Court, its just our interpretation, the suggestion is merely that there is a disputes mechanism but the consultation asks for comments on which body this should be. The obvious response will be the Planning Inspectorate but expect some replies to be: elected members, the Upper (Lands) Tribunal and independently appointed surveyors or solicitors.

We will be considering a response based on experiences of our clients and would welcome any comments you might have. Our general view is that whatever the outcome of the consultation, either by way of new guidance or legislation (which will be needed for any dispute resolution process) the main result is likely to be that developers will need to start preparing their section 106 agreements much earlier – certainly they should have a draft ready to submit with the application. Council’s will also have to face up to the fact that provided they are presented with a robust agreement, they will have less opportunity to squeeze out marginally justifiable obligations (for example monitoring fees) because they know the developer will pay up in the face of delay.

The consultation has only just opened and closes on 19 March 2015. There is also a question on affordable housing and student accommodation.