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Option - planning condition |
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A developer was given an option to buy land on the grant of planning
permission for redevelopment. The option was to expire on 31 December,
but was extended beyond that date if a ‘planning obligation’ was required
either as a condition of the grant of planning permission, or where it was
‘otherwise necessary that a development obligation shall be completed to
enable the development to be carried out’.
Whilst the planning application was made in time, it was refused and the appeal was not dismissed for a further two years. The developer argued that the option had not expired, but should survive until he had used all possible avenues of appeal against the
refusal of planning consent. He argued that until all legal remedies had been
tried, it did remain possible that a planning permission might be granted
requiring a development obligation.
Not surprisingly, the CA disagreed. In its view, such a clause would only extend
the option period if before 31 December, if the planning authority had either
granted planning permission (or resolved to grant planning permission), with
that being conditional upon completion of an s106 agreement.
Needless to say, such option provisions are not unusual (even though the
best advice is always to spell out quite clearly the extent to which time can
be extended by the use of appeals, judicial review etc). Also relevant is the
case of Castlebay [2005], noted previously, where an option
could be deferred pending a ‘decision in respect of a planning application’,
with it being held that this only applied to an application for full or outline
permission; it did not cover an application for approval of reserved matters
on an outline permission. Once again, the moral is to anticipate these
problems and use precise wording in the option agreement. Malkinson v
Secured Orchard [2005] EWCA Civ 1509.
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April 2006 |
