Unilateral Undertaking (s106) Planning Obligation not executed

28 Jan 2022
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United Kingdom
Good Evening,

This is a little more complex than a usual question on here and I'm looking for guidance on the best approach to take to minimize ruffling of feathers whilst maximising protection of me in the long term.

I'm buying a freehold house on a small private road (5 houses). These houses were built in 2020-2021. 1 large property is still up for sale by the developer. I am buying one of the smaller properties second hand. They're moving due to a change of circumstances and I do genuinely believe this is entirely separate to the issue I'm highlighting here.

The road is relatively small and won't meet highway standards so is therefore unadoptable in terms of the Tarmac. Consequently - im happy to contribute to repair/replace as needed.

However when looking through the planning documents for the site. They had to implement a relevant surface water drainage solution to satisfy a planning condition. This solution resulted in attenuation tanks that sit under 3 of the 5 properties driveways which is used to reduce sudden storm flow into the public sewer. The planning documents show the Utility company mentioning 'the applicant has opted not to apply for adoption for this site' or something along these lines. I assume the developer was cutting costs…...or maybe they were being nice...ha...and trying to avoid us having to have build over agreements for simple extensions. (On a side note - when the govt forced adopted of all shared drainage in 2011 - im very confused as to why they did not make this an ongoing requirement?)

Subsequently to cover the planning condition of ongoing drainage maintenance - the developer appears to have written and signed a Unilateral Undertaking (s106) with the planning authority.

This document states. Before any houses are disposed of a management company must be formed. This company will repair and replace the drainage as necessary. Each household should hold a share in company. The management company shouldn't own the land. All seems very sensible. Whilst annoying - I am relatively content with the way its written as it looks like the residents can control things.

Now this is where the twist comes in. As I found the above out - I enquired to the vendor if there was a management company, what does it cover, who it was, what's the current cost, how it can increase etc? I received a signed letter from their solicitor stating there was no management charge or company associated with the property. Each house owns the road in front of their house and you basically end up paying 20% of road and drainage repair costs as and when needed as detailed in the deeds.

As I'm pretty confident from researching that s106s stay with the land until retrospective planning is applied for or you wait 5 years and you can apply to discharge them if there's no longer a requirement for it. I can't see another planning application nor has it been 5 years since the s106 agreement was signed. Therefore as far as I can tell - its still active. Is it possible that this unilateral undertaking detail has been missed by 4 independent conveyancer's?

Following on from this - as the topic suggests - if the Unilateral Undertaking (s106) Planning Obligation has not been executed/implemented - what are the downstream implications?

-Is this technically a planning breach?
-Would an indemnity cover this?
-If this undertaking ends up getting retrospectively applied and a management company set up - won't all the deeds have to be voluntarily modified to reflect that they need to pay a management company? It sounds like a legal nightmare that I would want resolving before I purchase.

I am obviously following this up with my conveyancer. But I'm conscious of not investing too much money into this before getting solid clarification. Are there any definite do's/don'ts I should follow up here. I.e. should I enquire with the council if an alternative agreement was made?
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You need to understand if the company was formed and then wound up or if the developer is in breach. You need to ask your solicitor about possible step in rights the council may execute. You may also ask the vendor if they acquired any indemnity from the developer or contractual undertaking and if this can be transferred. Developers tend to create specific legal entities for such projects so that they can wash their hands of any future responsibility by winding the company up.
Thanks for the response motorbiking - will chase up these queries in particular.

I will ensure to post back my progress should anyone else struggle with something like this in the future.
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