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Building Regulations and Standards: Section 106 time limits

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      CommentAuthordjh
    • CommentTimeMay 4th 2019
     
    When we got planning permission we paid a section 106 contribution (we built before CIL was implemented). I was just reminded of it and have a vague memory that there's some kind of time limit on when the council spends the money. I don't mind having paid it if they've spent it on something half useful but I would object if they're just keeping the dosh around in their bank account.

    Does anybody know whether there is a limit to the length of time they have to spend the money?
    • CommentAuthorcjard
    • CommentTimeMay 7th 2019
     
    As far as I'm aware there's only a time limit if one was built into the undertaking as a contractual wording. I asked for mine to be amended to include such a wording (the boilerplate contract in my neck of the woods doesn't include one, the neighbouring council do include one). I could have pressed harder, got a solicitor involved perhaps but the guy I was co-building with was way more hot headed and insistent that we just sign away 13k as a cost of the build and get cracking.

    My council refused because they claimed there was no credible way of tracking it. I said that was bullshit, as the formula is simple: balance of the collections account now, including my payment, minus the sum of expenditure on 106 projects in the 5 years hence, would determine whether "my" portion of the pot had been used. They didn't accept it - seemed to be claiming (beneficially for them) that money into an account isn't used in the same order when it comes out (first in first out), which I deemed to be arbitrary horseshit. At the time my council hadn't used any of our heir massive 106 pot at all, as was revealed by a huge FOI request done by some journalist back then

    Check your wording, it should say the period (five years is probably reasonable)

    If you do find some legal precendent from a court ruling or central government that overrides, I would be most interested to know..
    • CommentAuthorCWatters
    • CommentTimeMay 7th 2019
     
    Some councils have 5 or 10 years in their standard wording. I know at least one council that maintains a spreadsheet of S106 contributions, the date it was paid and the date it should be spent by - so it is possible.

    In some cases the planners even charge a "monitoring" fee to ensure developer comply with the terms and conditions of the agreement (perhaps even when the agreement just requires the developer to pay up?). At least one court case ruled that monitoring fees weren't lawful because they failed the test that says obligations are 'necessary to make the development acceptable in planning terms'.

    Some council documents say that it must be spent "within a reasonable period, normally 5 years" but I don't know what case law exists to back that up.
    • CommentAuthorCWatters
    • CommentTimeMay 7th 2019
     
    https://www.buckles-law.co.uk/site/blog/planning-and-environment/s106-contribution-to-council-planning-permission

    When is it Refundable?

    The agreement which provided for the S106 financial contribution may have included a refund provision on the local planning authority. You should check the terms of the agreement to see whether an express refund period was provided.

    If an express refund provision was not provided (as would be the case if the S106 financial contribution arose from an undertaking) you may still be entitled to a refund of any unspent contributions. The courts have found that in the absence of an express refund provision then some additional term is required to be read into the document in order to achieve business efficacy by determining what is to happen to any unexpended balance once the purpose for which the contribution was made had been achieved.

    continues
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      CommentAuthordjh
    • CommentTimeMay 7th 2019 edited
     
    Thanks Caius. I searched our agreement and there's nothing there. But then I looked at the council's Supplementary Planning Document that creates the whole mechanism and I see

    If funds remain unspent within the timescale detailed below (commencement being determined from the occupation of the last dwelling on the development) of the development, they will normally be repaid to the applicant, on application to the Council, with any accrued interest.

    Parish Facilities – 10 years

    Ward Facilities - 15 years

    District Facilities – 15 years

    which I think answers my question. It also appears the council is smart enough to have all the data online, so I can see exactly what they've bought with my money so far. :bigsmile:

    edit: cross-posted with you, Colin - I hadn't refreshed my display.

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