The Growth and Infrastructure Act 2013 (“the GIA 2013”) amended the Town and Country Planning Act 1990 (“the TCPA 1990”) by inserting sections 106 BA, BB and BC which provided a mechanism to enable landowners and developers to apply to local planning authorities (LPA) to modify or discharge affordable housing requirements in Section 106 agreements (and Unilateral Undertakings) where these could be demonstrated to be rendering a scheme economically unviable.

To date, the modification procedures have been embraced and for the first time this month, the provisions were considered by the High Court as a result of an earlier decision by the Secretary of State to remove an affordable housing contribution relating to 332 residential units in Chatham Quays in the case of Medway Council v Secretary of State for Communities & Local Government & Byrne Estates (Chatham) Ltd & Chatham Quays Residential Ltd & Chatham Quays Commercial Ltd [2016] EWHC 644 (Admin).

Despite these welcomed amendments and the optimistic comments contained within the Spending Review and Autumn Statement published in October 2015 announcing that the government appeared to be committed to ‘extend the ability to appeal against unviable section 106 agreements to 2018’, we understand that ministers have now confirmed that there will be no extension to the deadline and that the ‘sunset clause’ in section 7(4) – (6) of the GIA 2013 will operate so as to repeal sections 106BA, BB and BC on 30 April 2016.  The Secretary of State was granted by virtue of section 7(6) of the GIA 2013 the power to substitute the date or make transitional or saving provision. However, there has been no evidence that these powers have been utilised to date.

While informal comments from officers at Department for Communities and Local Government (DCLG) have advised that a subsequent appeal in respect of an application made under section 106BA to the appropriate authority before the end of April, will generally still be considered, there would appear to be no legal basis in support of this advice.

In light of the above, our advice to developers and landowners with concerns of economic viability on their sites that have planning permission but are subject to affordable housing requirements need to be utilising the modification procedure contained with sections 106 BA,BB,BC as soon as possible to obtain a positive determination. Furthermore, by way of a reminder, the GIA 2013 did not replace to provisions contained within section 106A of TCPA 1990 which allows for the modification of a section 106 agreement by agreement between the parties or, following the expiry of 5 years since the section 106 obligation was entered into, by application to the relevant authority.