Court rules that a new planning permission does not overrule existing section 106 provisions

The Court of Appeal has recently ruled that the grant of a new planning permission does not automatically bring an end to obligations in an existing section106 agreement. We look at the recent case R (on the application of Peel Land and Property Investments PLC v Hyndburn BC ).

In a recent case, R (on the application of Peel Land and Property Investments PLC v Hyndburn BC), it was held that the grant of a planning permission did not automatically have the effect of releasing the parties to a section 106 agreement, previously entered into in respect of the same site, from the obligations in that agreement.

This was an interesting case concerning a large retail park in Lancashire. There was a proviso in an existing section 106 agreement (which restricted the type of goods which could be sold at the various units) stating that nothing in the agreement was to prohibit or limit the right to develop any part of the site in accordance with any planning permission, granted (whether or not on appeal) after the date of the agreement. Later planning permissions were duly granted for subdivision works and the insertion of mezzanine floors. Peel argued that new chapters in the units’ histories had been created, such that the section 106 restrictions no longer applied, or alternatively that by virtue of section 75 the units could be used for the purposes for which they were constructed – ie, open A1 retail use. The court did not agree with this view and declared that the section 106 obligations still had to be complied with.

It was held that a new chapter begins only when there is a radical change in the nature of the buildings on the site or in the uses to which they are put. That was not the case here.

Note, however, that there is currently an appeal outstanding to the Court of Appeal.

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