Non-payment of S106 sums - Public forum - Planning Advisory Service (PAS)

Here in Gloucester, we have had a small handful of cases where financial contributions have not been paid, and requests ignored or challenged. In these cases a last warning letter by Legal seems to do the trick. We have one stubborn case likely to go to county court and I agree it seems like a lot of unnecessary work to recover. But what other option apart from ensuring that it is registered as a land charge and waiting until the land is sold? - by that time the intended purpose of the money may be redundant! To best ensure court action is not necessary it would be worth putting in arbitration process within the Legal Agreement, and I would also make sure that late payment is subject to interest to further discourage delay. Finally, and off the top of my head, could you include a clause indicating that officer time (and other appropriate) costs will be added to any sum recovered through the court, where necessary? Why would any develop/solicitor refuse this when drawing up the Agreement, unless they are not intending to pay!

At Ealing, we recently had to instruct Litigation to recover £5K due under an agreement after the developers decided it was clever not to pay us. As this was a £5K agreement, it had to be dealt with under the Small Claims procedure, which meant Ealing wouldn't have been able to recover all its legal costs from the developer when the matter reached court, although they paid up once they received the summons. Had it been a penny over £5K, the normal 'costs follow the event' rule would have applied. Suggestion - when you are negotiating any agreements that would have been for £5K anyway, but which provide for payment on commencement/occupation and not on sealing, suggest you make the figure £5001. This will mean you can recover your costs if you have to sue for payment. Mark

I have found making a demand as follows works: 1. Tell the developer that all work on site should stop until the money has been paid as they are in breach of the legal agreement, specifying which covenants have been breached - I usually paste into the letter the relevant clauses, 2. Record the breaches on the Local Land Charges Register against the legal agreement entry advising the developer you have done so. 3. If no response to the above threaten legal action. While this does lead to occassional interesting "discussions" , when they understand the implications of the breach being recorded on the register it usually quickly brings in the money.