Our November planning and development club covered the following topics; • selling developments to investors; points to note - Kassra Powles • working with the public sector - Alex Kynoch • planning update - Dmitrije Sirovica For further advice and training visit our webpage - https://www.brownejacobson.com/

1. 28 November 2018
Planning and
development club

2. 28 November 2018
Ben Standing
Planning law update

3. Topics
— Modification of Section 106 agreements
— Restrictive covenants
— Section 73 applications
— Public Sector Equality Duty
— Consultation on developer contributions
— Lawful development certificates and nil use
— Interpretation of planning conditions
— Neighbourhood development orders
— Green infrastructure, use of satellite imagery
— More NPPF changes?

4. Modifying a S106 Agreement
— S106 (A) of the Town and Country Planning Act 1990
• Two methods:
 By agreement: S106A(1)(a)
 By application: S106A(1)(b)
• The local authority may determine according to S106A(6) that
obligation can be discharged if it no longer serves a useful purpose,
or would serve that purpose equally well if modification allowed.
• Can appeal to SOS – S106B

5. The uncertainty of S106A(6)(b)
— “useful purpose” meaning?
— Recent case law: R(oao Mansfield District Council) v SoSHCLG
[2018]

6. R(oao Mansfield District Council) v SoSHCLG
[2018]
— 1998 permission for mixed use development given
— MDC agreed to carry out highway works and the developer would pay
75%.
— MDC carried out highway works, but development did not take place.
— 2011 – new PP granted for 215 dwellings. Subject to S106 agreement
that developer agreed to pay the same sum. Developer paid
£160,000, no development took place.

7. R(oao Mansfield District Council) v
SoSHCLG
— Developer applied in 2016 to modify the obligation to release the
developer from paying outstanding sums. MDC failed to determine
application. The developer appealed to SoS
— Planning inspector determined that the highway contribution was
not necessary to make the residential development acceptable, it no
longer served a useful purpose and should be discharged.
— MDC judicially reviewed inspector’s decision. Useful purpose was
recovering public funds.

8. R(oao Mansfield District Council) v
SoSHCLG
Judgement
Four questions to consider:
– What is the current obligation?
– What purpose does it fulfil?
– Is it a useful purpose?
– If so, would the obligation serve that purpose equally well
if it was subject to the proposed modifications?

9. Restrictive Covenants
— New case: Veee Ltd v Barnard and others [2018]
— Property owner gained planning permission to build house in
garden. But restrictive covenants stopping the development.
— The owner applied to the Upper Tribunal (Lands Chamber)
under section 84(1) of the Law of Property Act 1925 to
discharge
— Did the covenant prevent the reasonable use of the property?

10. Restrictive Covenants
— When deciding if the covenant prevented the reasonable use
of the property the Planning Permission was highly persuasive.
— Needed to show that the covenant didn’t not secure the
objectors “practical benefits of substantial value or
advantage” or if it did, that those benefits could be
adequately compensated in money.

11. Restrictive Covenants
— Covenant to have plans for development approved by the
developer. Developer was dissolved. In this case the covenant
was discharged.
— Covenant not to build in the garden
— Court looked at harm caused. Should only be used for
practical benefits not ransom. Could not impose an order that
was effectively a ‘profit share’
— Found that did not secure any practical benefit of substantial
value or advantage to the objectors

12. Section 73 applications
— Finney v Welsh Ministers [2018]
— On an application to vary a condition to a previous planning
permission under the Town and Country Planning Act 1990 s.73, a
different condition could be imposed if it did not amount to a
fundamental alteration of the original proposal.
— Issues to be considered on section 73 application are a) could
condition be lawfully imposed on original planning permission b)
fundamental alteration of original permission?

13. Public Sector Equality Duty
— Equality Act 2010. Applies to public bodies.
— Avoiding discriminatory practices
— R(oao Buckley) v Bath and North East Somerset Council and
Another [2018]: Does the Public Sector Equality Duty apply to
outline planning applications? – Yes
— Developers should consider whether a scheme affects those with
protected characteristics. Specific impacts must be given due
regard.
— A record should be kept.

14. Government response to supporting housing
delivery through developer contributions
consultation.
— 5 March 2018 Government published consultation
— Response 29 October 2018
— Proposes the following:
– Remove the current statutory requirement for two separate
rounds of consultation on charging schedules

15. Developer consultations
— Lift section 106 pooling restrictions
— Make changes to the penalties associated with the failure to
submit a commencement notice prior to starting work on
exempted development
— Consult on indexing CIL rates to house prices
— Remove restrictions in regulation 123 relating to regulation
123 lists
— Introduce a Strategic infrastructure Tariff.

16. Lawful development certificates
— Used by LPA to certify that existing use or proposed use of a
site is lawful
— Application submitted for certificate to demonstrate nil use
for a 10 year period
— LPA said that could not grant as only could certify an actual
use
— Appealed to secretary of state

17. Courts interpretation of planning
conditions
— R. (on the application of Network Rail Infrastructure Ltd.) v
Secretary of State for Environment, Food and Rural Affairs [2018]
— Interpretation of planning condition requiring re-routing of footpath
— Could not continue with development until either rerouted or
application refused
— SoS refused to confirm order, because the development would
continue whether footpath was diverted or not and so not
‘necessary’

18. Courts interpretation of planning
conditions
— High court quashed SoS decision
— SoS appealed
— Court of appeal disagreed
— Important that courts try and given effect to a planning
condition where possible

19. Neighbourhood Development Orders
— Deems planning permission to have been granted for specific
development or specified classes of development within all or
part of a neighbourhood area
— Third one in England granted in Broughton
— Grants outline permission for up to seven homes on a site
currently used as a BT telephone exchange and has a lifespan
of six years

20. Green infrastructure
— Plan on including green infrastructure into national planning
policy and guidance
— Heatwaves during summer: 38.5C by 2040
— Defra and the Ministry of Housing, Communities and Local
Government will work together

21. Access to satellite image
— Free access
— Aim: to have a high level of detail
— Pilot projects already used by Bournemouth Borough Council
— Data: available for up to three years
— Boost of the UK’s space industry

22. More changes to the NPPF?
— New consultation
— Seeks views on changes to planning practice guidance relating
to the standard method for assessing local housing need
— Policy clarifications relating to housing land supply, the
definition of deliverable and appropriate assessment.
— Closes 7 December 2018

23. Questions?

24. 28 November 2018
Alex Kynoch
Working with the public sector

25. Objectives
– Understanding public sector drivers
– Understanding public sector restrictions
– Timescales
– Politics

26. Public Sector Drivers
— Housing targets
— Revenue (direct and indirect)
— Capital
— Job creation
— Members’ agendas

27. Public Sector Restrictions
— Internal governance and decision making
— Internal resources
— Public procurement
— State aid

28. Governance and Decision Making
— Complex internal decision making processes with input from multiple teams
— Fixed slots for decision makers’ meetings (e.g. cabinet/committees)
— Call-in
— Delegation of limited decision making powers
— Internal divisions: members, officers and departments
— Planning vs regen/housing teams

29. Public Procurement
— Regulated processes
— Services: £181,302
— Works: £4,551,413
— Internal standing orders
— Land transaction vs works contract - Faraday

30. State aid
— Rules restricting ‘support’ public sector can give to the
private sector
— Includes overly ‘generous’ deals
— Q: would the proposed deal be acceptable to a private
landowner/developer enter? Cannot factor in public sector
considerations
— Recipient at risk as aid must be repaid with interest

31. Timescales

32. Timescales
— Approval windows
— Internal resources / size of authority
— Input from multiple stakeholders
— Purdah – April/May

33. Politics
— Are directors or members:
– Sponsoring/driving the project?
– The ultimate decision makers?
— Know where to apply pressure to deal with blockages
— Understand the authority’s objectives
— Change in political control

34. 28 November 2018
Kassra Powles
Selling developments to
investors: points to note

35. What is for sale?
Sale of SPV or land sale?
— Land Sale
– Freehold or Leasehold sale?
– Third Party Consents
– Title defects?
– UK registered landowner
— Share Sale
— Who is your buyer?

36. Terms of Sale
— Sale price
— Any conditions of sale?
– Practical Completion of works
– Grant of Leases
— Deferred consideration?
– Overage
– Retentions

37. Planning
— Compliance with planning
conditions
— Discharges from planning
authority
— Section 106 / CIL Payments
— Building Regulations Certificates

38. Construction
— Building contract and professional appointments
— Warranties
– Can they be assigned?
– New ones need issuing?
— Sub-contractor warranties
— Product guarantees
— Tenant works – any warranties?
— Residential: NHBC or LABC available?

39. Estate Management
— Management Company:
– Do shares need transferring?
– Consent required / deed of
covenant
— Service Charge:
– Tenant payments up to date
– Sinking funds to transfer
— Management Information
— Insurance
— Service Contracts

40. Tenancies
— Rent Position:
– Apportionments
– Arrears
– Rent Free Periods
— Ancillary Documents:
– Rent Deposits
– Agreements for Lease
– Licences to Alter
– Guarantees
– Legal Opinion Letters

41. Completion
— Rent Authority Letters
— EPCs
— Original deeds and documents
— Plans, manuals, etc
— Tax:
– VAT election
– Capital Allowances

42. Q&A

43. Thank you
Kassra Powles
Associate
t: 0115 908 4806
e: kassra.powles@brownejacobson.com
Ben Standing
Associate
t: 0115 976 6200
e: ben.standing@brownejacobson.com
Alex Kynoch
Associate
t: 0115 976 6511
e: alex.kynoch@brownejacobson.com