Planning Contribution Refunds
McGrigors urges developers to review planning agreements as past financial contributions to local authorities could provide a source of cash today.
What are planning agreements?
As part of the planning process, developers and local authorities may agree certain infrastructure, public facilities or other works relating to the use of the property once developed to off-set any planning disadvantage of the proposed development. These benefits are usually recorded by planning agreements known as a Section 106 Agreement in England & Wales and as a Section 75 Agreement in Scotland.
Why should planning agreements be reviewed?
Developers will typically pay a cash contribution in return for the local authority undertaking the infrastructure works required by the agreement. If the local authority does not implement the work, or starts it later than expected, or constructs it for less than the developer paid, the developer may be due a refund of the whole or part of its contribution.
What does this mean for housebuilders and developers?
John Curran, Head of Housebuilding (UK), comments:
"As housebuilders and developers review current and future costs, they should look back and review historic planning contributions and question whether these contributions have been used either as intended by the local authority or within the timescales contemplated within the planning agreements.
Planning agreements sometimes include clawback provisions setting out the circumstances under which the developer can call on the local authority to return any payments along with interest.
McGrigors can help developers and housebuilders review their contracts and recover these contributions."
Contacts
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John Curran Partner Tel. +44 (0)1224 408 551 john.curran@mcgrigors.com |
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Alex O'Connor Partner Tel. +44 (0)207 054 2590 alex.oconnor@mcgrigors.com |
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