25 September 2017

Council caught out over parking permits

The news that London had breached its annual air pollution limits just five days into 2017, swiftly followed by the final warning issued to the United Kingdom by the European Commission for failing to address repeated breaches of air pollution limits, is a sobering reminder of the price we continue to pay for freedom on four wheels.

One of the ways in which the Government has sought to counteract the harmful emissions from vehicular transport is to reduce reliance on private cars through planning policy.  At local level, councils often seek to manage demand for on-street parking by requiring new residential development to be 'permit-free'.  This is usually secured by way of a planning obligation in an agreement made under section 106 of the Town and Country Planning Act 1990 (the 1990 Act) which puts the onus on the owner of the land not to allow occupants of the new development to apply for a parking permit.

This practice was called into question in the case of Khodari[1], in which the leaseholders of a flat within the Royal Borough of Kensington and Chelsea challenged the grant of planning permission for the conversion of 31 Egerton Gardens from 5 flats to 8.  One of the grounds of challenge was that the permit-free obligations in the associated section 106 agreement did not fall within the scope of section 106 itself.  The relevant clause in the agreement contained a covenant by the owners and lessees "not to apply to the Council for a parking permit in respect of the permit free residential units…and if such a permit is issued…it shall be surrendered to the Council within seven days of written demand."  The agreement also contained a requirement for all marketing material for the residential units to notify prospective owners/occupiers that they would not be entitled to apply for a parking permit; and for every lease for the new units to impose a covenant in like terms.

Section 106 of the 1990 Act affords local planning authorities the power to enter into agreements which meet certain requirements, and, crucially in this case, any agreement made is only enforceable to the extent the requirements are met.  One of the statutory requirements is that the agreement must restrict the development or the use of the land in any specified way, and it was on this provision that Mr and Mrs Khodari sought to rely.  They argued that the permit-free obligations did not restrict the development or use of the land which benefitted from the planning permission because the permit-free obligations related to the highway, rather than 31 Egerton Gardens itself.  The Court of Appeal accepted this argument and held that an obligation not to apply for a parking permit was not capable of being a valid planning obligation under section 106.

Unfortunately for Mr and Mrs Khodari, but fortunately for the Council, the permit-free obligation was saved by another clause in the agreement which set out the various statutory powers under which the agreement had been made.  These statutory powers included those contained in section 16 of the Greater London Council (General Powers) Act 1974, which allows a local authority to enter into an agreement with the owner of land where the agreement is "given or made under seal in connection with the land".  The Court held that the phrase "in connection with the land" has a wide meaning and that there was a connection between the residential use of the land and the potential grant of new parking permits.  The permit-free obligations were saved by section 16 but it is not the panacea for all parking-permit ills.  As its title suggests, the Greater London Council (General Powers) Act 1974 applies only to Greater London.  This leaves councils outside of Greater London without the ability to create permit-free planning obligations for new residential units.  Reliance on section 16 also creates a potential loophole, in that planning obligations which might have failed the tests under Regulation 122 of the Community Infrastructure Regulations 2010 (the obligations must be necessary to make the development acceptable in planning terms; directly related to the development; and fairly and reasonably related in scale and kind to the development) would still pass muster under section 16.

The Court did pause to consider whether it would be right within the confines of a national planning system to create a situation where different powers existed depending on geographical location, but observed that this is the case already, citing the use of residential premises as temporary sleeping accommodation which is a material change of use in London but not elsewhere in the country.  An alternative solution that has already been upheld by the Courts was mooted, namely to exclude each new flat from the schedule of streets within a controlled parking zone, but this is unlikely to have wide practical application given the additional administrative burden it would place on councils.  Another alternative may be to link the possession of a parking permit with a restriction on occupation of the residential unit.  However, the enforcement of such obligations is so unpalatable to councils that they may well refuse to explore this alternative in any event.   How councils outside Greater London will now secure permit-free development lawfully remains to be seen.

[1] R. (on the application of Khodari) v Kensington and Chelsea RLBC [2017] EWCA Civ 333

Claire is a Senior Associate in our Planning team.

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