This is Beverley Firth's Typepad Profile.
Join Typepad and start following Beverley Firth's activity
Join Now!
Already a member? Sign In
Beverley Firth
Recent Activity
I agree the position is not clear - and that, from the point of view of the LPA, the value of securing a developer's interest under an option is not that great in any event. I would take the view that if you have the freeholder bound, then even if there is a developer with an option which already exists, that developer will be bound when he acquires via the option (whether or not he was a party to the 106). I see this recent move by PINS and the Daventry Inspector (probably mirrored in other decisions) as taking things in a slightly different direction by saying that a developer with no more than an option (and therefore in their view having no "s 106 interest") cannot enter into a s 106 and some other power eg s 111 must be used instead. There could be problems, following that through into applications which are to be granted by the LPA, if an LPA were, for whatever reason, placing reliance on a developer's covenant under 106 (with or without the freeholder being bound). Also, landowners like to see developers with options entering into s 106s (alongside the landowner as freeholder) and one still sees clauses seeking to put liability on the developer rather than the freeholder (I won't go down that route in this post!). They may take a different view if they appreciated the doubt over the vires of a developer with no more than an option even entering into a 106
1 reply
Very interesting comments thank you. I think a lot of us would have sympathy with the view expressed by the Court in R(Loader)v Poole BC (supported in other cases)because there will be many examples of failure to comply with Reg 22 which are indeed minor. However, I do often see in practice a complete failure to observe the requirements (often out of a lack of appreciation of what is needed and the potential risks). Why take the risk?
1 reply
i havent seen this argued in practice but have always taken the view that provisions in a 106 (commonly seen) saying that terms will change in the future depending on circumstances, cannot work to vary the original 106 unless the variation is clearly set out and also the circumstances which give rise. This would then work as a condition. In the example you give, i would not regard that as making any automatic modification - rather there could be 2 overlapping obligations so that a discharge would need to be negotiated
1 reply