Developers need to be aware of the deadline for securing amendments to affordable housing obligations under sections 106BA, BB and BC.
Readers will remember the article we published in December of last year regarding the anticipated repeal of sections 106BA, BB and BC of the Town and Country Planning Act 1990 pursuant to which developers can apply to a local planning authority (which application can be the subject of an appeal to the Secretary of State) to modify or discharge affordable housing obligations, secured through section 106, where such obligations are considered to be onerous.
The ability to review affordable housing obligations where they have the potential to render development unviable was introduced by the Growth and Infrastructure Act 2013. However, a 'sunset clause' inserted into the 2013 Act by the government will mean that, in the absence of an extension or transitional/saving provision, the operation of the abovementioned application and appeal mechanism will cease on 30 April 2016.
Despite last November's joint Spending Review and Autumn Statement announcing that the government would 'extend the ability to appeal against unviable section 106 agreements to 2018', we understand that ministers have now confirmed that there will be no extension to the abovementioned deadline and that the 'sunset clause' in section 7(4) of the 2013 Act will operate so as to repeal sections 106BA, BB and BC on 30 April 2016.
While informal comments from officers at Department for Communities and Local Government (DCLG) have advised that a subsequent appeal in respect of an application made under section 106BA to the appropriate authority before the end of April, will generally still be considered, there would appear to be no legal basis in support of this advice. In the absence of a transitional/saving provision, to which the Secretary of State could have recourse by virtue of section 7(6) of the 2013 Act, the application and appeal mechanism contained in sections 106BA, BB and BC, together with a local planning authority's and the Secretary of State's associated powers of determination, will fall away automatically on 30 April 2016.
Therefore, it would seem that developers with a live application to modify or discharge an affordable housing obligation have two immediate tasks. Firstly, they would be well advised to lobby DCLG for some transitional/saving provisions to be laid as soon as possible. Secondly (and in acknowledgment of the fact that the aforementioned lobbying may fall on deaf ears), they should do everything in their power to ensure that their application is positively determined by the end of the month. Otherwise, if a positive outcome is not secured and the 30 April deadline is missed, the benefit of the section 106BA, BB and BC modification/discharge provisions will be lost and local planning authorities and the Secretary of State will no longer have the ability to accept, consider and/or determine such applications.
Our advice to developers who are currently pursuing a live application/appeal is to act now to try and secure a positive determination in respect of the same by 30 April 2016, after which the sun will set on this useful tool for reviewing onerous affordable housing obligations.
This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.