On 28 February 2013, amendments to the Town and Country Planning (Modification and Discharge of Planning Obligations) Regulations 1992 (‘Regulations’) come into effect.
Previously, section 106A of the Town and Country Planning Act 1990 provided that planning obligations could not be varied or discharged until the expiry of five years from the date they were entered into. A formal application had to be made to the local planning authority (‘LPA’) in which the developer would have to show the obligation no longer served a ‘useful purpose’. In the absence of such evidence, the LPA was unlikely to discharge or adequately modify the planning obligations to overcome financial viability hurdles to development.
Whilst it has always been the case a variation could be negotiated and agreed by deed, the application process was reserved for section 106 Agreements which were at least five years old. The new Regulations now enable applications to vary or discharge planning obligations entered into prior to 6th April 2010 to be challenged and removes the five year moratorium. Note the new Regulations only apply in relation to agreements enforced by English authorities.
One of the problems of the old system was that, even if a developer and LPA agreed the terms of a variation, the practicalities of everyone signing a deed of variation were such that variations were not achieved. The application process avoids the requirement for everyone to sign a deed of variation. However, it does not enable additional burdens to be imposed on another party.
It will be interesting to see whether this slight relaxation to the current provisions actually addresses concerns regarding the high levels of stalled developments caused by section 106 viability issues. The current legal test requiring a developer to show an obligation no longer serves a ‘useful purpose’ remains. Given the broad interpretation of this test through the courts, demonstrating successfully an obligation does not serve a useful purpose remains difficult. This may limit the practical and commercial benefits of the new Regulations.
