How do you vary a planning agreement (and why would you want to)?

How do you vary a planning agreement (and why would you want to)?

As with so many aspects of planning law this is a complex question. But – cart before horse – what is a planning agreement?

A planning agreement imposes obligations on the use of land (positive or negative) which run with the land. A planning agreement can restrict the development or use of land; require works to be carried out on land; require land to be used in any specified way; or require money to be paid.

Planning agreements are usually entered into in exchange for a planning permission.  The rationale is that the planning agreement mitigates the harm that is otherwise caused by the development. So a new dwelling in the countryside is ordinarily against planning policy.  But intrusion into the rural landscape is mitigated by a planning agreement tying the new dwelling to an agricultural unit (so that it cannot be sold off separately) and restricting occupation of the dwelling to those employed in agriculture/forestry.  Similarly, the development of 150 houses causes all sorts of disbenefits – chiefly, greater calls on public sector resources such as schools, libraries, hospitals.

That is likewise mitigated by the payment of money towards those purposes, or the reservation of certain parts of the development for public purposes – providing cultivated or wild public open space and the provision of affordable housing.

Why would you want to vary a planning agreement?

The most common reason for wanting to vary a planning agreement is to reduce or remove the obligations imposed on the land in the first place. Developers will be interested in doing this in order to make a better return (or any return at all perhaps, in the current market) on that investment. But the 1990 Act prevents a landowner from compelling review of a planning obligation for 5 years from the date of the planning agreement. So the council can engage with a renegotiation if they choose to do so, but ordinarily they simply refuse to engage with this and regard the 5 years as being the first occasion on which they will entertain the idea.

This is understandable much of the time: planning agreements are quite hard fought in the first place with councils being under a legal duty since 2011 to be able to justify their requirements.  If the council was obliged to negotiate immediately following grant of consent then obviously developers would be far more likely to attempt to vary immediately.

And on the council’s side of things, they have spent a great deal of time and resource interrogating the developer’s case and assessing their application in the context of relevant local plan policies. Five years gives a reasonable time for the development to be instigated if the market will allow it.  If after five years a developer has been unable to “turn” the site then the council should be obliged to consider a variation – with the developer then being able to appeal to the Secretary of State for a decision if the Council refuses.

So, arguments about viability can be dealt with strictly speaking at any time but for practical purposes after five years – at which point the developer has the “stick” of being able to appeal if the council will not agree to a variation on its proposed terms. That entails the preparation of expert evidence about viability as well as the site history and the efforts that have been made to engage with the terms of the planning agreement as originally drafted.

Away from commercial/ viability reasons for variation there are more complex cases.

The Act allows a variation on appeal where the obligation no longer serves a “useful purpose” or would serve that purpose equally well if modified in a specified way. So back with our example of the dwelling in the countryside, if a planning agreement restricting occupation to farm workers is in an area which has now become heavily developed there is a case to be made that it no longer serves a useful purpose – and the restriction should be removed (or perhaps varied to accommodate equivalent low-income workers in the local economy). Again, that is something that should be capable of resolution via relevant expert evidence from experts and planning/employment in demographics locally.

Much more problematic is the covenant that was volunteered in the first place without enough debate or consideration about its necessity at the time of grant of planning permission. Years later the restriction prevents an entirely reasonable use of land – but the council refuses to let it go. What then?  A client of ours was in this situation most recently in a decision which was ultimately granted in their favour. The original development was housing development which “enabled” a school for autistic disorder (AD) pupils to be built.

The planning permission granted consent for an AD school. But the original planning agreement had gone much further in specifying in quite narrow terms who the operator of that school could be. When the client sought to grant a lease to another AD provider the Council refused absolutely to vary the planning agreement, maintaining throughout the appeal that if the variation was granted the school would fall out of use as an AD school. Such an outcome was prevented in any case by the permitted user of the school under the terms of the planning permission – but the council put the client to the cost, delay and uncertainty of pursuing an appeal for eighteen months, jeopardising plans for that operator to go in while the appeal was lined up in a long queue and eventually subjected to the correct “useful purpose” test, by the inspectorate.  The necessity of recording anything at all about the operator of the AD school should have been thought more carefully about in the first place – this goes back to the importance of interrogating the obligations being sought and ensuring that they are proper ones for the local authority to seek.

How to vary a planning agreement

Although the statute makes clear that no formal application is necessary, many Councils require a formal application to be made to them for them to consult on.  It is always worth trying to simply agree variation of the deed with them direct.  Where agreement cannot be reached (and provided five years have passed) a variation can be applied for with the decision remitted to the planning inspectorate for a determination, in much the same way a planning refusal is appealed.

The inspectorate then decides whether or not the obligation still serves a useful purpose or whether it would serve an equally useful purpose in the terms the applicant has applied for.

Lessons learned

It’s easy to be wise after the event, but varying planning agreements does involve looking back at what was done originally. The most important lessons are probably:

• Rigorously examine all the obligations being sought when the original agreement is being negotiated. Payments of money are obvious ones and tend to be thoroughly scrutinised because of that – but unnecessary user restrictions and the possible implications of these should be thought hard about and if appropriate argued with the Council to avoid any need for a variation further down the line
• Wherever possible try to agree a variation in dialogue with the council – a formal application should only be made where a refusal seems likely
• The council has a legal duty to consider an application to vary after 5 years but that does not mean variation before that time is impossible. Local authorities must act reasonably at all times in any event and if refusing to discuss a variation is manifestly unreasonable in the circumstances they may be under common law duties to consider a variation.

Contact our planning lawyer in Sussex and Kent

Oliver Bussell is Partner and planning lawyer in Rix & Kay’s Commercial Property & Planning Team. For more information, please contact oliverbussell@rixandkay.co.uk or call 01732 448050.