Blake Morgan acts in crucial Court of Appeal parking permits case: R (Khodari) v RBKC

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The Court of Appeal has given judgment on 11 May 2017 in R (Khodari) v Royal Borough of Kensington and Chelsea [2017] EWCA Civ 333 in which Blake Morgan acted.  One issue that Khodari was concerned with was the lawfulness and enforceability of the inclusion of "permit-free" obligations within Section 106 Agreements which seek to restrict future occupants from applying for a permit to park on the highway.

Section 106 of the Town and Country Planning Act 1990 empowers any person with an interest in land to enter into a planning obligation restricting the use of "the land".  The Court of Appeal held that "permit-free" obligations do not come within the scope of S106, as the person entering into the obligation does not have an interest in the highway (but only the property actually occupied) and cannot therefore restrict its use by that means. Historically local authorities have sought to use this provision to do exactly that and it was previously open to question whether reliance on that provision was lawful and enforceable or not.

However, the Court also held that such an obligation could be enforceable under Section 16 of the Greater London Council (General Powers) Act 1974 (the 1974 Act).  This enables an owner to enter an agreement "in connection with the land" rather than restricting the use of the land itself.  The Court held there was a "connection" between the development land and the availability of parking permits since permits are available only to residents of the relevant London Borough where the property is situated.  For this to apply the agreement must include in it this specific provision as an enabling power, although not all agreements have historically done this.

This judgment clarifies that parking "permit-free" obligations are not lawful nor enforceable under S106 of the 1990 Act.  It will have substantial ramifications in local planning authority areas outside of the London Boroughs where the 1974 Act is not available as an alternative enabling power. The question as to on what precise basis such obligations might be lawful and enforceable by local authorities has been left open by the Court. Care should be taken to ensure that any relevant enabling powers are included in agreements between planning authorities and developers.

Blake Morgan is available to advise on the implications of Khodari for agreements you have previously entered or are considering entering into and which include parking "permit-free" development obligations.  Our team was led by David Wadsworth, a Partner in Property Litigation, and Mr Meyric Lewis of Francis Taylor Building as Counsel. 

Click here to read the full decision.