non payment of s106 and enforcement on residents - Public forum - Planning Advisory Service (PAS)
Grŵp agored
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Wedi dechrau - Gorffenaf 2012
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Gweithgaredd diwethaf - Wythnos yma
non payment of s106 and enforcement on residents
Planning was granted in 2007 for a development of 14 residential units and 5 commercial units. The s106 was £142,000 and due 12 months from a material start. The Developers built and sold the residential units but have refused to pay the s106 stating that all sales proceeds have been committed to their lender and that there has been no demand for the commercial units. The Developers have now submitted an application for the change of use of the commercial to residential (private not affordable) and that the extant s106 obligation will only be paid if they get consent for the cou and realise funds from sales of the resultant market units. We are nervous that should we pursue the Developer, they will liquidate the company and we could be waiting sometime for a succesor in title. What options are available? could we recover the extant s106 funds from the existing residents? Thanks Duncan
Theoretically there should be no bar on pursuing the current residents, unless the S106 agreement contained a provision preventing this. However as a matter of policy this may not be a very good avenue to go down. There must be a way round this because if a developer could get out of its obligations under a S106 Agreement by simply liquidating its company this would make the whole S106 system a bad joke. Is there any possibility that the lender could be liable - presumably they still have a charge over the remaining property, they would normally have been bound by the S106 agreement. Sorry this is not a practical solution but perhaps it may start an alternative train of thought .
One would need to look at the exact way the section 106 agreement is drafted and what land is actually burdened with the obligations, but planning obligations are enforceable against persons deriving title. So the residential owners would be liable though as Lawrence says that is not a politically attractive option. Liquidation should not destroy the obligation, but you would have to wait for a new owner. I very much doubt that the lender has any liability. I have done a lot of work on this in the past so can help you further. David Brock