I have a planning scenario where my local planning authority are
asking for a S106 Unilateral undertaking Deed to be signed by
both myself and my Bank. Unfortunately there is an issue on one of the clauses.
The local planning authority require the following:
The Mortgagee consents to the Owner entering into the obligations
contained in this Deed and acknowledges that the Land shall be
bound by the restrictions and obligations contained in this Deed
and that it’s security shall take effect subject to this Deed
PROVIDED THAT the Mortgagee (and any other person who acquires
an interest in the Land only as a mortgagee) shall not be liable
in respect of any breach of the terms of this Deed unless and
until it takes possession of the Land or the Development is
continued by or at the instigation of a receiver, administrator,
liquidator or other agent appointed by the Mortgagee (or other
mortgagee) or with its consent.
Whereas the bank are asking for the following:
The Mortgagee consents to the Owner entering into the obligations
contained in this Deed and acknowledges that the Land shall be
bound by the restrictions and obligations contained in this Deed.
The Mortgagee shall only be liable for breach of this Deed if such
breach is committed by the Mortgagee itself whilst in possession
of the Land and shall not be liable for any pre-existing breaches
prior to taking possession of the Land.
From my understanding the key difference is that the local planning
authority say that the Bank would be liable for any pre existing
breaches if and when it takes possession of the property. Whereas then
bank wants it to be clear that it would not want to be liable for any
breaches that it did not commit.
I did some research and it appears to me that the version of the
clause that the bank are asking for is fairly standard as I have seen
multiple examples of it on the web. My local authority has said the
version they use is standard as well. To be honest I believe the
version that the local authority are using is a customised version
and not standard.
I’m now stuck between two rocks and don’t known what to do, does
anyone have any suggestions here?
Thanks
IA
