Unpaid Section 106 Agreement - Public forum - Planning Advisory Service (PAS)

Just a thought. A Section 106 is a registered land charge and transfers with ownership. Discuss with your legal section as to enforcing a land charge, it may be a differant way of looking at the problem. There is plenty of case law on property conveyancing which should help. We have the same issue, and are awaiting the official reciever... our differance is that we had issued an invoice and are a creditor.

If they are market units and there are still some up for sale, you could threaten them with an injunction that will either (a) prevent the sale and/or occupation of any of the remaining monies are paid, and/or (b) order them to pay the monies from the sale of the first unit to be sold after the date of the injunction. The Court would most likely be prerapred to grant you a full award of costs if you were sucessful in obtaining the injunction and so it shouldn't cost you anything and has the potential to cost them £5K upwards if they end up having to pay your costs as well as therir own. This potential scenario, together with any ongoing liability for late payment interest within the terms of the Agreement should be focus their minds ?

We had a similar case recently, although none were occupied, the development was completed while the contribution was still outstanding, despite us chasing it through this person and that administrator. Then I'd noticed that some local land searches had been made from individual potential purchasers of the dwellings. I immediately contacted the developers/administrators to tell them that I had notified our land charges department to advise potential purchasers that the S106 had not been complied with and that an individual purchaser would be responsible for paying the contributions to the council under the S106. Guess what....yes they found the money and paid almost immediately to stop us scaring off potential purchasers, it got things moving....harse but effective and we didn't have to go down the injunction/court action route

As a S106 Agreement is a legally binding obligation, enforcement action could proceed including formal notice on any search to the effect that there is a breach and any enforcement would be against all with an interest in the land. Is there also the potential for a claim against the Proceeds of Crime Act? i.e. if legally binding enforcement action to be with the aim of providing x no. affordable units/payment of contribution and if continue after a criminal act claim the profit? Any comments on this would also be appreciated

It's very likely that the S106 Agreement will state something to the effect that Party A does not have to pick up the tab for Party B’s misdeeds when Party A has no say in what is happening at the property. The agreement will also most probably state that the company that started out of the ashes of the original developer (whether a contrived situation or not) will be a separate entity and not have any responsibilty for the obligation unless the trigger for the payment of the obligation was reached whilst they were in ownership of the site. The agreement may allow you to pursue individual owners for a proportion of the agreement, otherwise it would seem that your only option is to ensure that you are registered as a creditor of the company that went into administration.

Any S106 agreement properly registered at the Local Land Charges department is binding upon any owner of the property; it is a land obligation of a special sort enforceable by the Local Authority. In the circumstances, the new owners of the development site are liable for all provisions under the S106 agreement. Indeed when they purchased from the Liquidator they would have been put on notice of the S106 agreement, and the purchase price should have reflected the obligations in the S106. If the purchasers have not put aside a contingency sum for liabilities under the S106 then that is their hard luck; they remain liabie for all its provisions. This is the case even if there is a provision in the S106 that says previous (not subsequent) landowners should not be liable under the S106. The only way they can get out of it is by entering into a deed of modification whereby the provisions of the S106 are amended, otherwise the remedy is an injunction requiring compliance with the S106.