Property

Four’s your limit…

My blog entitled “Lights out…” told the sorry tale of a planning permission quashed after it had been implemented and the development was complete. The risks of having a permission quashed were ratcheted up another notch on 6 April, when regulation 123(3) of the Community Infrastructure Levy Regulations 2010, as amended in 2014, came into force.

Government policy discourages planning authorities from using s106 obligations “in competition” with CIL; once a CIL charging schedule is in force. So Reg. 123(3) in effect prevents a S106 planning obligation containing an obligation to fund or provide infrastructure if five or more separate planning obligations (relating to permissions granted within that authority’s area) already provide for the funding or provision of that infrastructure.

Confusingly, such an obligation is not expressly prohibited. The regulation provides that an obligation that offends it “…may not constitute a reason for granting planning permission…” This is planning-speak. In plain English, it means that a permission granted on the basis of such a S106 obligation is vulnerable to being quashed, because the authority has taken into account something it ought not to have.

To offend reg. 123(3) the infrastructure in question must be something that is either identified in the charging schedule to be funded by CIL or, if no infrastructure is so identified, any infrastructure that could be funded through CIL.

Part of the developer’s problem is that it may be difficult or impossible to find out whether or not any particular s106 provision offends reg. 123(3). One problem is that it may be necessary to go back as far as 6 April 2010 to check how many relevant contribution obligations already exist. A cautious developer may in future insist that its s106 agreement contains a warranty by the authority that none of the developer’s obligations offends reg. 123(3). Quite what remedy the Courts would award for breach of such a warranty is an interesting question; but at least the attempt to negotiate its inclusion would ensure that the point is addressed before the s106 agreement is made and the permission granted.