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Dust off those Section 106 Agreements says Michael Green of Jones Lang LaSalle, Southampton.

wantspacegotspace.co.uk - Dust off those Section 106 Agreements says Michael Green of Jones Lang LaSalle, Southampton.A new Bill aimed at fast-tracking large-scale business and commercial projects could help to unlock major pieces of land says local development experts, Jones Lang LaSalle.

The Growth & Infrastructure Bill is now in its final stages in the House of Lords and has been proposed by the government as part of it’s ongoing drive to stimulate physical development to aid economic recovery.

Whilst many are getting excited by the Bill's recommendation for developers to be able to go direct to the Secretary of State to bypass local authorities, Michael Green, a Director at Jones Lang LaSalle says that what he finds more interesting, is the Bill's new proposals for S.106 agreements which picks up on the latest buzzword in planning - viability.

The Growth & Infrastructure Bill proposes new action on stalled developments, allowing developers to require Local Authorities to reconsider their Section 106 Agreements agreed in more prosperous market conditions.

"For landowners and developers, this is the element of the Bill that could make a real difference," says Michael Green.

 "Realistically nobody wants to go to battle with local authorities and bypass councils and this element is now being watered down and restricted to those councils which show a consistent failing to determine applications within statutory time limits.

"What most interests Jones Lang LaSalle, relates back to a ministerial statement on Housing and Growth (September 2012) which states that

 'it is vital that the affordable housing element of Section 106 agreements negotiated during different economic conditions is not allowed to undermine the viability of sites and prevent any construction of new housing.' "

At present there is no obligation for Section 106 agreements to be revisited for a period of up to five years, unless local authorities agree to it.   Under the proposed new Bill, this would change and S.106 obligations relating to affordable housing regardless of their age can be renegotiated if they make a scheme economically unviable.

"This shows a pragmatic approach from the Coalition government to seek to enable land owners and developers to renegotiate affordable housing obligations where they are unviable.  Whilst many Local Authorities have taken a fairly lenient position on the five year rule in the past and allowed the S.106 to be renegotiated in advance of this deadline, the provisions of the Bill, as currently drafted, would place a statutory duty on the local planning authority to reconsider affordable obligations entered into through a Section 106 agreement.

“Local Authorities often have unrealistic aspirations in nrespect to S.106 payments, which are essentially an additional paymenyt from a Develop in return for planning permission being granted. Whilst they were tolerated when market conditions were buoyant, schemes now are at best marginal, and Local Authorities need to take a pragmatic approach to ensure that development can take place, benefitting the local economy and creating jobs.. This is a very welcome move.”

Posted by The Editor (wantspacegotspace) on 11th May 2013 (updated 17/05/2013)

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