The Government has recently launched a consultation about changes it proposes to make to the planning obligation regime in order to make it easier for developers to require local planning authorities to renegotiate section 106 obligations where they are no longer viable
At present a planning obligation can only be varied with the agreement of the local planning authority if it is less than five years old. This means that if an authority refuses to renegotiate there is little that a developer can do to force the issue during the first five years. The only option open to a developer in such circumstances is to submit a new planning application and, if necessary, appeal a refusal of the application on viability grounds. Such an option is both time-consuming and expensive and so unattractive, not to mention also having an adverse impact on a scheme's viability.
The situation is different for planning obligations that are more than five years old. In respect of such agreements a developer has a legal right to require an authority to reconsider its terms and a right of appeal if agreement cannot be reached.
In a further attempt to kick-start development of stalled sites, the Government is now proposing to extend the legal right to have the terms of planning obligations reconsidered to any obligation entered into before April 2010. Its intention is to enable developers to renegotiate planning obligations that are making deveopment unviable in situations where the authority is refusing to renegotiate without having to wait for the fifth anniversary of the date of the obligation.
The rationale behind an April 2010 cut-off is that this was the date when Regulaton 122 of the Community Infrastructure Levy Regulations took effect and imposed new legal tests on what could be sought from developers under section 106. One of the questions posed in the consultation is whether this is an appropriate date for a cut-off.
Full details of the consultation, which runs until 8 October 2012, are available at www.communities.gov.uk.
Comment: This is a particularly important consultation for any landowner or developer with a stalled site where the planning obligation is making the development unviable, although it will also be of interest to local planning authorities. Coming so quickly on the heels of the National Planning policy Framework, it is further evidence of the importance that the Government places on house building as a means of kick-starting the economy.
It is also, perhaps, recognition that despite clear Government guidance about the need for local planning authorities to be open to approaches from developers seeking to renegotiate planning obligations where viability is an issue, some authorities are still reluctant to properly engage with the issue.