Section 106 council agreement

Savingn

Hi there,

I am a first time buyer and in April we put an offer on a repossessed flat in a shared ownership developement but we would own 100% of it. The estate agent told us we need to complete in 21 days... It has now been 5 months and we have not even exchanged contracts. The reason it seems to be taking so long is because the banks solicitor isn't being helpful so our solicitor has been trying to gather the paper work.

We thought we were nearly ready to exchange last week when our solicitor mentioned 106 council agreement. Our solicitor said they had to contact our lender and in response our lender is not willing to proceed unless the agreement is removed or complied?

Does anyone know if this is possible to have the agreement removed? What is the pros and cons of having this on a property?

This all so new and we really wanted this flat but feels like it's slipping away.

Any advice or help would be appreciated.

Emmzi

no linky posts on this board please Harriet - referrals board only! Can you take down your link to save us reporting it? Ta

nikki1520

We had a similar problem when buying a repossession - the lender didn't have a copy, and the council took forever to find it. However, 10 minutes of messing around with Google, and a combination of "council name" "street address" and S106 agreement later, I had found it for myself. Seeing as this had held us up to the point of the lender wanting to list the property at auction, and our solicitor advising us not to exchange until we had it (over 3 weeks of to and fro!) I did wonder to myself why a professional conveyancing solicitor couldn't find it on the internet, also in 10 minutes (or less, given the fact that I'm an amateur!) and what, exactly, I was paying them for.

Anyway, worth a try if you have 10 minutes to spare

DVardysShadow

HRR-MPP wrote: »

Hi there Savingn

A little about Section 106 agreements:
Section 106 (S106) of the Town and Country Planning Act 1990 allows a local planning authority (LPA) to enter into a legally-binding agreement or planning obligation with a landowner in association with the granting of planning permission. The obligation is termed a Section 106 Agreement or toherwise known as 'planning contributions'.
These agreements are a way of delivering or addressing matters that are necessary to make a development acceptable in planning terms. They are increasingly used to support the provision of services and infrastructure, such as highways, recreational facilities, education, health and affordable housing.
The scope of such agreements is laid out in the government’s Circular 05/2005. Matters agreed as part of a S106 must be:

• relevant to planning
• necessary to make the proposed development acceptable in planning terms
• directly related to the proposed development
• fairly and reasonably related in scale and kind to the proposed development
• reasonable in all other respects.

Apologies if you already knew all of the above, but i feel it is important for you to understadn what they are for. If your potential new house has a S106 agreement on it, it's worth finding out what it was for. It might be something simple - which you could offer to pay off (obviously if it's a neglible amount). It might be a small amount that holding things up. Alternatively if the agreement was out in place for a planning permission that has not been built then it might not be necessary at all.

I hope this helps. I would be happy to help you further. I am contable on here and my website spammoronsRus.co.uk

Best of luck. Harriet

useful content preserved, spam button clicked

Savingn

Thanks for the replies.

Our solicitor sent us this reply "your mortgage company advising that they are not willing to proceed on the basis of a Section 106 Agreement not being complied with and have requested that the same is complied with and removed before proceeding." With that reply we're not sure where it leaves us, is it possible to remove it by the sellers solicitor or is it upto the council to decide?

I'm off to do some hunting on google...

patman99

It would be very unusual for an S106 to be placed on a flat. In Colchester, they built a 160-flat development near to my M-i-L and there was no S106 levied (despite several of the flats being 5 or 6 bedrooms). They only applied a S106 to the 30-odd houses that were built as part of the same development.
From memory, this was £30k per house. This was paid upfront by the developer, then divided-up and added to the sale price of every property.

The lack of S106's on flats is the main reason so many get built in Colchester.

HRR-MPP

Hi there Savingn

A little about Section 106 agreements:
Section 106 (S106) of the Town and Country Planning Act 1990 allows a local planning authority (LPA) to enter into a legally-binding agreement or planning obligation with a landowner in association with the granting of planning permission. The obligation is termed a Section 106 Agreement or toherwise known as 'planning contributions'.
These agreements are a way of delivering or addressing matters that are necessary to make a development acceptable in planning terms. They are increasingly used to support the provision of services and infrastructure, such as highways, recreational facilities, education, health and affordable housing.
The scope of such agreements is laid out in the government’s Circular 05/2005. Matters agreed as part of a S106 must be:

• relevant to planning
• necessary to make the proposed development acceptable in planning terms
• directly related to the proposed development
• fairly and reasonably related in scale and kind to the proposed development
• reasonable in all other respects.

Apologies if you already knew all of the above, but i feel it is important for you to understadn what they are for. If your potential new house has a S106 agreement on it, it's worth finding out what it was for. It might be something simple - which you could offer to pay off (obviously if it's a neglible amount). It might be a small amount that holding things up. Alternatively if the agreement was out in place for a planning permission that has not been built then it might not be necessary at all.

I hope this helps. I would be happy to help you further.

Best of luck. Harriet

HRR-MPP

Sorry everyone - i'm new to this and had not read the rules properly. The offending site reference has been removed. Rules now read and noted.

chesneyoctopus

Some s106 agreements state specifically that any obligations imposed in them will not appply to purchasers of individual plots used as single private dwellinghouses or flats.