Councils could lose out on developer contributions due to Section 73 permissions

By Ellen Nicholson

In a High Court decision last month it was determined that a housing development previously granted two new permissions under Section 73 of the Town and Country Planning Act 1990 is not bound by the Section 106 agreement that formed part of the original consent.

North Norfolk Council originally granted outline consent to developer Norfolk Homes for up to 85 homes in June 2012. The permission was subject to a s106 agreement which included the provision of affordable housing. Under s73, applicants can apply to change or withdraw planning conditions attached to an existing consent without a full review of the whole application. Using this process, Norfolk Homes were granted two new permissions for the scheme in September 2013 and September 2015. In September 2018, the Council refused the developer’s request seeking confirmation that the latest permission could be lawfully implemented without triggering the section 106 obligations under the original 2012 agreement, which prompted this legal challenge.

The changes made by the developer under the s73 applications were relatively minor but ultimately, they were new permissions. In both instances, Norfolk Council fail to instigate a deed of variation or a new s106 agreement to tie into the new permission. Therefore, the new consent had no s106 agreement attached to it and no affordable housing obligation!

Central to the Norfolk Council’s defence was the ‘Lambeth judgement’ published by the Supreme Court last year. This ruled that a retailer was still bound by a condition in their original consent which was not explicitly reiterated in a subsequent s73 permission. Norfolk council’s argument suggested you could similarly interpret the s106 in light of the subsequent s73, but Lambeth provided no support for the council in this case and the two cases are completely unrelated.

This judgment could have a range of implications for both developers and councils. As well as no longer being obliged to go through with future planning obligations, developers could find that an already agreed obligation to, for example, maintain part of the land as public open space will cease to apply, and likely be unenforceable by the council. The case highlights the importance of checking the terms of an original agreement to check if it needs to be varied. A permission granted under s73 is a new permission, any obligations associated with the original consent do not necessarily just carry forward. It is possible to draft s106 agreements with specific clauses which also apply to any subsequent s73 permissions. There is little doubt this is not the only instance of this error in the grant of s73 permissions and is something we will monitor closely moving forward!

Share With Friends