Car parking for new flats? – fine outside London, but a fine in London!

28 / 06 / 2017

New residential developments can place a strain on parking provision, and in urban locations in particular local planning authorities look to section 106 agreements to implement policies requiring new developments to be “car-free”.

The question is whether they can legally do that. The answer has been provided by the recent Court of Appeal decision in R (on the application of Khodari) v The Royal Borough of Kensington and Chelsea Council which has determined that they cannot.

Mr and Mrs Khodari are leaseholders of a flat in Kensington. The freeholders of the block applied for planning permission to convert the existing five flats into eight. The grant of planning permission would have led to the Khodaris’ lease being terminated due to a development break clause contained within it, so they did their utmost to scupper the proposals.

Planning permission was granted in March 2015, and an associated section 106 agreement prevented occupiers of the additional three flats from applying for Council parking permits.

The Khodaris successfully challenged the planning permission in the High Court, and the planning permission was quashed on the basis that the imposition of a planning obligation preventing applications for parking permits was not within the Council’s statutory powers. The Royal Borough of Kensington and Chelsea (“RBKC”) appealed.

The section 106 agreement was entered into not only under section 106 of the Town and Country Planning Act 1990 (“TCPA”), but also a number of other powers including section 111 of the Local Government Act 1972 and section 16 of the Greater London Council (General Powers) Act 1974.

The Court of Appeal considered the scope of the powers contained in section 106 of the TCPA, which, in summary, enables “any person interested in land” to enter into a planning obligation restricting the development or use of land, requiring specific operations to be carried out on land or requiring land to be used in a specified way. The obligations can be enforced against the person entering into the obligation and successors in title.

The Court of Appeal agreed with the High Court and decided that the car-free obligations did not comply with section 106. The Court took the view that it would not be the use of a particular flat that the restrictions would prevent, but the use of the highway for parking, and an application for a parking permit could be made anywhere, on-line or by post, and not necessarily from the land to which the section 106 agreement applied. Accordingly, the obligations did not restrict the use of land or require it to be used in a specific way, so they could not be planning obligations for the purposes of section 106 of the TCPA. Not being a planning obligation, such a restriction could not bind successors in title.

Had it ended there, RBKC would have been defeated and it would have led to the end of car-free restrictions in section 106 agreements. Fortunately for RBKC, the Court of Appeal agreed that the scope of section 16 of the Greater London Council (General Powers) Act 1974 (“GLCA”) came to its aid.

As with section 106 of the TCPA, an agreement under section 16 of the GLCA may be enforced by a local planning authority against a party to the agreement with an interest in the relevant land, and also their successors in title. The difference is that section 16 requires the agreement to be made “in connection with the land”, which has a wide meaning and doesn’t require the agreement to regulate the use of the land itself – that was found to be the problem with section 106 of the TCPA in this case. The Court of Appeal decided that there was a sufficient connection between the requirements imposed by the agreement and the proposed development, and that the car-free restriction was valid under section 16. RBKC’s challenge succeeded and the planning permission was upheld.

The result is that, in London Boroughs, car-free restrictions can continue to be used and enforced, but only if the agreement is stated to be made under section 16 of the GLCA. However, a concern for London Boroughs will be that they are likely to face barriers to enforcing those provisions in existing agreements that are not made under section 16, because successors in title may not be bound.

Outside London, local planning authorities will not be able to impose car-free restrictions on new developments under section 106, and also not under section 16 as the GLCA does not apply outside London.

Great news for developers outside London then? That seems to be the case, although watch out for local authorities circumventing the problem through their Controlled Parking Zone schemes.