The Department for Communities and Local Government released the Renegotiation of Section 106 Planning Obligations consultation paper on 13 August 2012. The stated purpose of the consultation (and associated proposed regulations) is to alleviate the Government’s growing concerns regarding the extent of stalled development that is attributable to the inability of parties to renegotiate planning obligations contained in s106 agreements.
Currently if a developer wants to modify or vary a planning obligation and the parties to the s106 agreement are unable to reach agreement, the only option is to lodge a formal application to the local planning authority requesting that the obligation be reconsidered (with resultant right of appeal). This application can only be made five years after the obligation became effective.
The proposed regulations (to be introduced as part of the consultation) will allow developers and landowners bound by section 106 obligations to apply to the relevant local planning authority to modify or discharge the planning obligation if it was agreed on or prior to 6 April 2010. (For obligations agreed after 6 April 2010 the period will remain five years.) This date aligns with the date that the new statutory test for planning obligations was introduced via the CIL Regulations 2010. Any amended obligation will still be required to meet the current statutory requirements introduced by the CIL regulations. The existing tests in s106A regarding modification and discharge of planning obligations will also remain in place in that, if deleted it must no longer serve a useful purpose, and if modified, it continues to serve a useful purpose equally well.
Importantly, the proposed regulation will have the effect of also bringing forward the right of appeal under s106A if the local planning authority refuses to modify or discharge the planning obligation (as currently an application (and appeal) can only be made after a period of five years from the date the obligation was entered into).
The consultation document makes it clear that any renegotiation of a planning obligation (including in respect of affordable housing) does not mean that contributions should be automatically reduced or lost; rather the obligations should be tested against the relevant local plan policies.
The closing date for responses is 8 October 2012.