Councils across the country are sitting on around £6billion in unspent s106 monies and a proportion of this is likely to be due to be refunded.
When drafting s106 agreements our team make sure that it is a standard term of every s106 planning obligation by agreement that if the money for an identified project isn’t entirely spent within a defined period any unspent portion must be returned.
What Happens if The Council Has Not Spent The S106 Fund on Delivering Infrastructure?
The principle is simple. The money was required from the developer to make the development acceptable in planning terms; if the council hasn’t spent it on delivering that infrastructure, they cannot hold or spend that money on other projects.
Councils aren’t going to proactively hunt down beneficiaries, but that doesn’t mean that they are relieved of their obligation to account for the money provided to them and spent (or not spent) on the relevant projects – and return the rest when requested to do so.
S106 Funds – Can Landowners And Developers Receive a Refund?
Landowners and developers will want to consider how the s106 payments and refunds were structured. Where the s106 provides for the original landowners to receive a refund, developers aren’t incentivised to monitor spending. At the same time, the original landowners no longer have a link to the site, were paid a market price at the time and up to ten years later may have forgotten that they might be due a refund.
Get in Touch
If you believe that you are due a refund, ask. If you get push back from the planning authority, either in terms of accounting for the funds or making a refund, please do get in touch with either our Planning team or our Property Litigation team for support.