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Dispute resolution in S106 Agreements

Section 106 Agreements have long been used by councils to secure funding for the extra infrastructure required to provide for new developments, whether residential or otherwise. However, a lack of agreement can often stall projects which need the agreements in place before planning permissions can be granted.
The Housing and Planning Bill (“the Bill”) was introduced in October 2015 and the latest version includes provision for dispute resolution in relation to negotiating section 106 agreements. Where the parties fail to agree the terms either will be able to ask the Secretary of State to appoint a person to help resolve issues that arise between the parties when negotiations reach a sticking point.
The Secretary of State is not obliged to appoint someone unless they consider that the local authority would not grant planning permission unless a satisfactory agreement was in place. The appointed person will then report to the parties on the unresolved issues and indicate the steps taken since their appointment to resolve the issues. There is an obligation on the parties to co-operate with the appointed person and attend meetings and provide documents where requested to. Once certain planning obligations are recommended by the report and the applicant for planning permission does not enter into those obligations the local authority must refuse the planning permission. Equally, where a report is published and the parties do enter into planning obligations in accordance with the reports recommendations the local authority may not refuse planning permission on the grounds that the section 106 agreement is not appropriate.
The Bill doesn’t cover everything and it’s expected that further regulations will add to the detail but the provisions provide a last resort to applicants and local authorities alike who are struggling to get a development out of the planning stage.