The Court of Appeal has recently tackled an issue which has been a knotty problem for residential developers in Greater London over the last few years – the question of parking permits and whether local planning authorities can validly demand that restrictions on applying for such permits are secured in s106 agreements.
On smaller residential schemes around London, planning consent refusals are often down to parking issues. Where a developer requests planning permission for the conversion of flats, consent is often only granted on the basis that the developer signs up to a s106 agreement agreeing that:
- the new occupiers of those flats will not be allowed to apply for parking permits; and
- obliging the developer to put such restrictions in a covenant on the leasehold titles.
Since a 2013 unreported Westminster case there has been significant doubt about the lawfulness of those obligations. In that case, the judge held that such obligations did not fall within the strict terms of s106 Town and Country Planning Act 1990 and therefore could not be enforced against successors in title. Some developers have (before and after that case) nonetheless been willing to agree to those obligations just to unlock their planning consent. For both the local authority and the developer that is a risky business, as it leaves the consent open to challenge on the basis that the restriction has not been secured in perpetuity, leaving a risk of existing parking pressures being exacerbated – and a disgruntled community of potential challengers.
In my experience, there has been some inconsistency in the way in which the Westminster decision has been taken on board by the London boroughs but it is now common to see specific reference in 's106 agreements' to s16 Greater London Council (General Powers) Act 1974. This legislation offers a much wider remit for securing obligations that run with the land than the narrow confines of s106. Whilst s106 only allows you to enter into obligations which require sums of money to be paid to the authority or relate specifically to the development or use of the relevant land, s16 covers all obligations made 'in connection with' the land. It is much easier to see that restrictions on the use of the highway and the imposition of title covenants are 'connected to' the land.
The recent case (R (oao Khodari) v RBKC Council and Cedarpark Holdings Inc  EWCA Civ 333) makes it clear that such obligations can be entered into and enforced against successors in title if they are made under s16, but not if they are made only under s106.
This case did not explore the position outside the geographical remit of Greater London.
It will be interesting to see if s16 becomes more widely used for other obligations which do not fit squarely within the letter of s106 – this piece of legislation is often criticised for being unduly restrictive so we may see the options for securing developer covenants increasing.