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Planning & Development

Negotiating planning obligations for residential development

Our viability appraisal was pivotal in renegotiating a Section 106 agreement for a residential development.

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After a small amount of negotiation, the clarity of our evidence meant that the Council agreed the Section 106 Agreement should be waived.

Challenge

Section 106 Obligations

Our client had obtained a Residential Planning Consent for three bungalows in the Richmondshire District Council area.  Due to Richmondshire’s overriding rural character, in some instances the Council impose Section 106 obligations on single unit developments.

Our client had been asked to sign a Section 106 Agreement which tied the developer of the units to pay a commuted sum of £11,800 and for one of the units to be sold at a value of 20% below Market Value. This would have had a significant impact on the viability of the project.

Our client instructed us to undertake a Viability Appraisal to negotiate this commitment.

Solution

An expert appraisal

Following our instruction from the client, we reviewed the Section 106 Agreement and initially made contact with the Council to discuss their views on the submission of a Viability Appraisal. The Council confirmed they were happy for us to submit a Viability Appraisal and agreed that following our submission they would consider whether the Section 106 Agreement was appropriate.

We produced a Viability Appraisal, which was approved by our client and was then forwarded to the Council Policy Officer, who we are in regular contact with.

Outcome

Providing clarity

The Council’s Policy Officer agreed that our Viability Appraisal demonstrated that the Section 106 Agreement and the costs within it would not be appropriate. After a small amount of negotiation, the clarity of our evidence meant that the Council agreed the Section 106 Agreement should be waived.

As a result, the commuted sum and affordable housing obligations were both removed, saving our client a significant sum of money, and greatly increasing the marketability and viability of the site.

Your dedicated
GSC Grays Advisor

Calum Gillhespy -GSC Grays

Meet our GSC Grays
Director

Calum Gillhespy

MRICS


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GSC Grays team

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