Section 73 Affordable Housing Renegotiation Post-Finney, Norfolk Homes and Armstrong

 

What you can (and can’t) do with Section 73

There has been much recent consideration of the appropriate usage and limitations of section 73 applications.

In recent case law, three particular cases stand out. We will not rehearse their full implications at length as many will be familiar with these, but briefly summarise key points relating specifically to our services and include links to each below:

Finney v Welsh Ministers & Ors [2019] EWCACiv 1868 (05 November 2019)S73 cannot be used to amend the description of development, or lead to a permission inconsistent with said description.

Norfolk Homes Ltd v North Norfolk District Council & Norfolk County Council [2020] EWHC 2265 Deals with the common misconception that S73’s are amendments somehow linked to the original permission, rather than an independent, new permission. A previously signed S106 agreement therefore does not automatically carry over to the S73 permission (unless wording is included in the original deed to this effect); a new S106 agreement must therefore accompany the S73 if a planning obligation is necessary, and it is appropriate to reconsider any obligations at the date of said S73 application.

Armstrong v Secretary of State for Levelling Up, Housing and Communities [2023] EWHC 176 (Admin) There is nothing in the legislation limiting S73 applications to ‘minor material amendments’ as suggested by PPG, or to non-substantial or non-fundamental alterations. Meaning should not be ‘read into’ legislation. Unless there is a conflict with the ‘operative’ part of the permission (i.e. the description of development following Finney) then a change can be considered under S73.

So, what does this mean for viability and affordable housing delivery?

All of the above accord with S106 Management’s historic approach to S73 applications, wherein an S73 application is absolutely an appropriate route to reconsider, and if necessary and justified renegotiate, planning obligations.

 

Recently, prior to the Armstrong judgment, we saw an uptick in misunderstandings about the nature of S73, with some approaches attempting to limit the operation of S73 by ‘reading in’ meaning to the legislation, as in the Armstrong case.

 

In relation to delivery of affordable housing contributions and viability, S106 Management assist a significant number of applicants who require renegotiation of previously consented affordable housing delivery and S106 contributions under different economic circumstances, which have now become unviable and undeliverable.

In many cases when the original permission was granted the proposed affordable housing delivery was viable, but following increased build costs and falling values this is no longer the case. The above case law finally puts to bed any ambiguity as to this approach to S73.

 

We have many successful examples of Section 73 applications being used appropriately to reduce or remove previously agreed contributions on the basis of viability, but the most recent provides a post-Finney, Norfolk Homes and Armstrong decision.  

 

For clarity this applies to schemes which have been consented and signed a previous s106 agreement, but not been substantially completed.

Recent appeal

S106 Management acted for the applicant on viability, affordable housing and advised on the appropriateness of the S73 application in recent appeal ref APP/Q5300/W/22/3294731.

 

This is perhaps the first unambiguous and specific testing of the Norfolk Homes decision in relation to affordable housing delivery in particular following the above cases, and the Inspector’s judgment is clear and well reasoned on this matter, concluding:

Further extracts below discuss the linkage between S73 changes, viability, planning obligations and S106 at some length:

Para 16 provides clarity on S73 being an appropriate route to delivering revised planning obligations.

Costs up and values down? We can assist.

If circumstances have changed since your original permission was granted and you need assistance revising or renegotiating your s106, affordable housing or developer contributions via a Section 73 application, call us today for an initial free consultation.

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