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Let's talk about section 106, baby…
Real Insights - Property Update

Real Insights - Property Update

Author
Lucy Langley
Date
29 April 2016

A recent Government consultation 'Implementing Technical Changes to the Planning System' highlighted proposals to introduce a section 106 dispute resolution procedure. The aim is to break deadlocks in planning agreement negotiations.


Let's talk about section 106, baby…

A recent Government consultation 'Implementing Technical Changes to the Planning System' highlighted proposals to introduce a section 106 dispute resolution procedure. The aim is to break deadlocks in planning agreement negotiations.

The procedure will apply to any planning application where the local planning authority would be likely to grant planning permission and there are unresolved issues relating to section 106 obligations. The Government's hope is that the proposals will speed up the planning process. It is argued that smaller developers are particularly affected by section 106 delays, and will benefit from the proposed changes.

The consultation suggests that the applicant, local authority or other person (to be defined by the regulations) will be able to initiate the process following the lapse of the statutory determination period for the planning permission. Under the dispute resolution procedure, an appointed person would review the disputed wording or obligation and produce a report outlining the recommended obligations and wording to be included in the section 106 agreement. This report would not be strictly binding, but it would constrain the decisions that an authority can make and would be a material consideration for an inspector on any appeal.

It is anticipated that the section 106 dispute resolution system will be self-funding with the fees being shared between the disputing parties. The process is likely to be cheaper than the cost of a full planning appeal, but we would hope that the fees will still be sufficient to incentivise meaningful conversation before the dispute procedure stage – especially since the planning authority will be liable for its own costs rather than these being met by the developer.

The consultation closed on 15 April 2016 and we will wait to see whether the final regulations provide a workable system for dispute resolution. Ideally the new procedure will provide some 'bite' to negotiations when wording has previously been recommended by an appointed person. We will also be interested to see if the new procedure gives the Law Society's precedent section 106 agreement the weight that it sometimes lacks in the section 106 negotiation world.