Advice - Section 106, 104, 38

dave4343

Hi,

Hoping someone can advise me on the following.

Buyer's solicitor/lender has requested a copy of Section 106, firstly what is a Section 106 and how would I obtain a copy.

Likewise a Section 104 and 38 has been requested, what are these how would I obtain them.

Background of my sell, house is freehold, on new build development approximately 5 years old. Was purchased as a normal sell, no part ownership / shared equity etc etc involved.

Background to purchaser - lives on same development, next road, porting his mortgage across.

Would be most grateful if anyone can explain is simple terms of what these are and how to obtain.

Thanks

Dave

whalster

the documents or undertakings should have been with your original purchase pack the 104 and 38 may be supported by a paper bond by the developers bank to the local authority (highways)and the water authority of your area, the 106 should be also on record with the planning in the council area or a copy from the finance dept. of that council . If the 106 is not able to be paid by the developer for whatever reason gone bust, or whatever then they usualy have a claus for it to pass to following owner or a proportional split this is why the solicitor has asked for them .

dave4343

Many thanks for taking the time to respond.

I have lost the original purchase pack, is there anyway I can obtain duplicates of 104 and 38 - contact the developer for copies?

106 I can progress with the local council, thanks for the advice on this.

Many thanks

Dave

Richard_Webster

You should be able to get copies of all these form the Council at a cost - typically they may charge around £20 per document - but it varies from Council to Council.

General point - anyone buying new builds needs to keep all the apparently boring stuff their solicitors send them because it will usually be wanted when they come to sell!

dave4343

Many thanks Richard.

General point taken - at a cost!

Thanks

Dave

dave4343

Richard,

Why are they requesting the Section 106?

When I have googled this it appears always to be associated to affordable housing, my house is not this was a straight purhase.

Is it the norm to request a Section 106?

Thanks

Dave

Flat_Eric

dave4343 wrote: »

Richard,

Why are they requesting the Section 106?

When I have googled this it appears always to be associated to affordable housing, my house is not this was a straight purhase.

Is it the norm to request a Section 106?

Thanks

Dave

The Buyer's solicitor has to investigate the Title fully hence their request for a copy of the Section 106 Agreement. Can be frustrating but if the boot was on the other foot and you were buying - you would want to be sure that all was well with your proposed purchase.

Going back 5 years, the developer/the builder of your house would have had to apply for planning planning. Such approval would (more than likely) have been given on the proviso that the developer complied with certain obligations including in some instances financial obligations - this in a roundabout way is my explanation of a Section 106 Agreement. Richard will probably be able to give you a better answer than me.

Whilst it might not apply to your house individulaly, it would apply to the whole developmment and would be relevant to any buyer. (they would want to know that the obligations had been satisifed) and that they weren't taking them on those obligations themselves.

Affordable housing is a factor when Local Authorities consider applications for planning permission. Usually they stipulate that a certain percentage of the houses being built are made available for affordable housing.

Richard_Webster

s106 agreements can say all kinds of things.

Very often once the development has been there for some yaers they are pretty academic - but not always and that is why some solicitors want to see them.

Sometimes they just say that the builder has to pay the Council £100,000 towards providing a roundabout on a nearby main road and 10 years down the track whether they did or not doesn't have much to do with the property being purchased.

Other times they say things like that the properties can only be occupied by those who have lived in Devon for 5 years or make some other similar restrictive condition. It is this latter kind of restriction, which (although rarer), is the real reason why solicitors want to see them - to check there isn't anything potentially nasty like that which could affect resale.

dave4343

Flat Eric and Richard - many thanks for this, all becomes clearer now, was mind boggled this morning!!

Once again thanks for your help.

Dave

Flat_Eric

PS for future reference - if buying a new build in the future - worth getting your solicitor to find out what percentage are going to be affordable housing properties from the developer's solicitor.

terrierlady

Flat_Eric wrote: »

PS for future reference - if buying a new build in the future - worth getting your solicitor to find out what percentage are going to be affordable housing properties from the developer's solicitor.

remember this can change if the developer fails to sell normal homes they can then convert to social housing.