In some urban areas new residential development adds unwanted congestion to the roads and controlled parking zones may be stretched to their limit. The use of car-free residential developments tied up by s.106 planning obligations is a relatively new response to the problem. In this article, Ben Garbett examines the legalities surrounding this issue.

What are section 106 agreements?

Section 106 agreements and unilateral undertakings, otherwise known as ‘planning obligations’, are typically (but not always) documents entered into between local authorities and landowners / developers to cater for the impacts of development. This is a way of making proposed development acceptable, as a condition of granting planning permission.

These restrictions may take a variety of different forms, but one typical arrangement is to prevent the future occupants of residential development from applying for car-parking permits. This may be coupled with a one-off monitoring-fee payment so that the local authority can police the obligation.

For developers, the first question will always be deciding whether such restrictions are necessary in planning terms. And that issue depends on a variety of local factors which will need to be fully tested.

But is it legal?

Case study

In R (on the application of Khodari) v Kensington and Chelsea RLBC, a claim was brought by a disgruntled tenant of an existing flat development who would be dispossessed if the permitted re-development was allowed to go ahead.

At first the claim succeeded, and the permission was quashed; however, giving judgment on 11 May 2017, the Court of Appeal has now reversed that decision.

The Court decided that section 106 of the Town and Country Planning Act 1990 could not be used to prevent occupants from applying for car-parking permits, but this was legally enforceable under the ambit of another statutory power: section 16 of the Greater London Council (General Powers) Act 1974. And while the monitoring-fee payment did constitute a lawful section 106 planning obligation in principle, it had not been identified as a specific reason for granting permission, and so the additional hurdle of legal compliance with regulation 122 of the CIL Regulations did not arise.

Comment

The judgment brings some clarity to these issues but does so in a rather unsatisfactory way given that obligations made under section 16 (of the 1974 Act) will avoid the usual statutory tests under Regulation 122 (i.e. obligations which are necessary, fair and reasonable if they are to constitute a reason for granting planning permission). Arguably, this blows a large hole in common assumptions about how the planning code is intended to work, but that argument was rejected by the Court.

It also still leaves open the prospect that such agreements may be invalid and unenforceable outside the London Boroughs where the 1974 Act does not apply. In other cases, the validity of the monitoring fee may also require further scrutiny, depending on how that issue is treated in the officer report and committee debate.

The overriding lesson here is that section 106 agreements are often used as the ‘dumping ground’ for a variety of potentially unlawful requirements. Such obligations should not be accepted blithely, for a host of reasons. It would also be prudent to review one’s options by taking expert legal advice where an unlawful section 106 agreement might have already been entered into.