The provisions of the Planning etc (Scotland) Act 2006 as they relate to planning agreements have now come into force, with effect from 2 February 2011. A much expanded Section 75 has been inserted into the Town and Country Planning (Scotland) Act 1997 replacing the previous provisions.
The main changes include:
- Unilateral Agreements
A developer can now enter into a Section 75 Agreement without the local authority being involved. The idea is to allow a developer to lay out a “planning gain” package to the local authority which the developer would be willing to provide should planning consent be granted. This concept has existed for some time in England. Whether these packages will be used in Scotland remains to be seen but it is anticipated that they may provide a useful bargaining tool where matters have dragged on for some time or negotiations have stalled.
- Clarification as to use of Section 75 Agreements
There has been uncertainty for a number of years as to whether such agreements can impose on the developer positive obligations such as to pay certain sums of money. It is now clear that an obligation to make payment of a specified sum or a sum (to be determined by way of a formula) is both competent and lawful.
- Power to enter land
The new provisions allow a local authority to enter onto land subject to the agreement and carry out works which the developer has failed to do in terms of the Section 75 Agreement. The costs of doing so are recoverable from the developer. Whether a local authority exercises such a power may, of course, be dependant on the likelihood of their recovering any costs, particularly in the current economic climate.
- Execution prior to ownership
A developer can now enter into a Section 75 Agreement prior to becoming the owner of the land in question. This will enable a Section 75 Agreement to be negotiated in situations where Missives have been concluded but are conditional on the grant of planning permission. The current owner need not be involved in such negotiations.
- Modification of Agreements
The new provisions allow for an affected party (the party against whom an agreement is enforceable) to apply for modification or discharge of a Section 75 Agreement. Previously, any discharge was registered against the title deeds but would not necessarily result in the deletion of the original agreement. Instead, Land Certificates could become clogged up with obligations which were discharged and it would fall to the conveyancer to be satisfied that each of the original obligations had been adequately discharged by the subsequent entry.
- Developer bound after sale
Outstanding obligations under a Section 75 Agreement can now continue to affect the developer even after he has sold the land, unless the agreement says otherwise. Previously, a developer could avoid his obligations by selling the land affected to another. Now, the new owner will be proportionately liable with the developer and will have a right to reimbursement of any sums spent in meeting the obligations.
Clearly, some of these changes will have implications for developers and land owners alike, particularly in negotiating contracts for the purchase and sale of land. It is important that appropriate legal advice is taken at the earliest opportunity.