Sealing solutions for planners in England and Wales

Out-Law Analysis | 09 Apr 2020 | 12:10 pm | 4 min. read

The coronavirus lockdown presents particular problems for planners wanting to complete on Section 106 Agreements – the documents that restrict developers’ use of land and secure their contributions to local facilities and infrastructure.

A number of solutions are available, from simply witnessing through a window to holding a virtual council meeting to amend how documents are sealed and who can seal them.

The problem

Planning obligations must be entered into by a deed which is sealed and delivered. Sealing of deeds has to be done in the physical presence of a witness. In addition, for many local authorities sealing must be done by one "authorised person" and that sealing to be witnessed by a second "authorised person".

If the planning obligations cannot be entered into unilaterally and so remove the need for the Local Planning Authority (LPA) to seal, then it will be necessary to find alternatives to securing the obligations under s106.

Simple Sealing Solutions if the seal and authorised personnel are available

  • Sealing Days – Authorised LPA officers attend the council offices on a particular day and time to seal and witness the sealing of hard copy documents. As the witness is physically present, albeit maintaining the social distancing rules, the formalities can be complied with;
  • Seal kept at an authorised person's home – The seal is kept at the home of an authorised officer and a second authorised officer visits the home of the 'sealer' to witness sealing in person whilst maintaining social distancing. The witness could observe through a window, which may be preferable to being in the same room, and the document left outside for the witness to collect and sign.

In both instances the journeys made into the office or to a colleague's home can be justified as essential journeys for work purposes.

Authorised personnel not available

Standing orders may give other staff (the Director of Legal or Chair, for example) the right to nominate additional officers.

Where that flexibility doesn't exist it may be possible to amend standing orders to authorise additional officers to seal and to witness sealing. The recent Coronavirus Act 2020 and related regulations will allow for virtual council meetings. This would enable changes to be made to the constitution and standing orders to authorise additional personnel.

If the seal is not accessible

Where the seal is inaccessible it may be possible for the council to amend its constitution for a temporary period via a virtual meeting to replace the corporate seal. The law on what constitutes a seal states it can simply be a circle added to the document with the letters LS (meaning locus sigilli – 'in place of a seal'). It would still need to be sealed by and in front of the proper officers, if that is what the constitution requires.

Electronic Seals

Although the concept of an electronic seal does exist, it is unlikely to be a permitted method of execution within the LPA's constitution, though of course once the councils have their annual meetings under the new regulations this is exactly the kind of change they could make.

If the agreement is time and business critical

The granting of planning permission for major development will be time critical to allow the applicant to start the process of discharging conditions so that work can start on site as soon as Covid-19 restrictions are lifted.

One solution could be to impose a condition requiring a s106 deed to be entered into prior to the commencement of development.

Another solution would be to enter into the s106 agreement as a simple contract. If a s106 agreement is not executed as a deed and it is executed as a simple contract then it would not bind successors in title, but it would take effect as an agreement to enter into a s106. The s106 contract would contain a requirement to enter into a s106 deed as soon as reasonably practicable and prior to commencement of development. The benefits of this are:

  • a contract can be executed by signature. Most standing orders give the Director of Legal, Chair or similar, the authority to direct who can sign contracts on behalf of the authority.
  • it could enable the use of electronic signatures by the LPA subject to its constitution and standing orders (which could be amended, if necessary, to allow for this on a temporary basis).
  • a fully negotiated and agreed confirmatory s106 deed would be appended to the contract giving certainty to all parties on its terms.

The above solutions could be used alone, or in combination. They could also be coupled with a requirement on the relevant site owner to consent to the making of an application to enter onto their title a restriction preventing any disposition of the site unless a covenant from the purchaser had been given to enter into the s106 deed. A unilateral notice could also be entered on the title by the LPA to give priority to the s106 contract.

    Completing an agreement to enter into a 106 – Risks and Practical Tips

The s106 contract solution outlined above is an option where the risk of non-completion outweighs the risk of a challenge based on invalid execution. But the solution is not risk proof because it is unprecedented, but the risk of challenge to the grant of planning permission is small because:

  • the challenge is to the execution of the document not the actual planning decision;
  • these are extraordinary circumstances;
  • the intention of all parties is clear; and
  • it would be very difficult for someone to get this sort of challenge even lodged at the moment

The risk to a LPA of an owner or developer subsequently refusing to enter into the s106 as a deed is also low, as the LPA could seek an order for specific performance and the court is likely to find in favour of an LPA who granted planning permission in reliance on the agreement in these extraordinary circumstances.