The Department for Communities and Local Government (DCLG) has published guidance for section 106 renegotiations.
A section 106 agreement is a bilateral agreement between a developer and a local planning authority (LPA) under section 106 of the Town and Country Planning Act 1990. This agreement imposes conditions on developers in return for the LPA granting planning permission, including the requirement for the developer to provide affordable homes or to make financial contributions towards local facilities and infrastructure.
The Growth and Infrastructure Act 2013, which received Royal Assent on 25 April 2013, inserted new sections 106BA, 106BB and 106BC into the Town and Country Planning Act 1990. These new provisions enable developers to apply to the LPA if the affordable housing requirements under the section 106 agreement meant that the development is no longer economically viable. The LPA is then able to modify or remove the affordable housing obligation.
The guidance states that any application to the LPA to review the planning obligations should contain a revised affordable housing proposal. A developer will need to demonstrate that the current affordable housing obligation makes the scheme unviable in the current market conditions and that the revised proposal delivers the “maximum level of affordable housing consistent with viability and the optimum mix of provision” (see paragraph 12 of the guidance).
If the affordable housing obligations are revised following an appeal, the modified requirements will apply for three years. However, if the LPA does not support the developer’s revised proposal, the developer is able to appeal to the Secretary of State.
In a related development, the Government recently introduced amendment regulations that enable developers to submit applications to modify or remove planning obligations that were entered into before 6 April 2010 – click here for full details.
