The wood through the trees: drafting section 106 obligations

A recent case has shown the importance of drafting s106 obligations carefully and in accordance with the terms of the statute, to ensure that covenants are enforceable and can therefore be taken into account as a material consideration when a planning authority is determining a planning application.

This recent case concerned an application for consent for residential development in a woodland area. Consent was refused on the basis that it would be detrimental to the character of the woodland, albeit that a s106 agreement had been presented in which the developer covenanted to submit a woodland management agreement to the planning authority prior to commencing development, and then to implement the said management plan.

On appeal, the inspector determined that there was no guarantee that such a covenant would achieve the necessary mitigation.

The court dismissed the challenge to the inspector’s decision. It noted that the management activities would have to be carried out on land outside the developer’s ownership and that the s106 covenant did not bind this land – as such, the planning authority would not be able to enforce obligations against the owner of the other land in the future. The court therefore sided with the inspector in deciding that the s106 covenant was not satisfactory.

It is not uncommon for section 106 covenants to refer to land outside the application site, or outside the land being bound by the obligations, but it does require careful drafting to ensure that obligations are properly enforceable, such that a planning authority can take them into account in its determination of the planning application. It may be that the problem in this case could have been resolved if the obligation had been drafted as a restriction on the development or use of the application site, rather than as a positive obligation to submit and implement a scheme.

PNH (Properties) Ltd v Secretary of State for Communities and Local Government [2012] EWHC 1998 (Admin)

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