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Court of Appeal Confirms “Permit Free” Obligations Not Within Section 106 – but May be Saved in London by 1974 Act

Meyric Lewis

The Court of Appeal has confirmed in R (Khodari) v. RB Kensington and Chelsea [2017] EWCA Civ 333 that “permit free” obligations (ie restrictions on the ability of owners/occupiers of residential developments to apply for parking permits) do not come within section 106 and so such restrictions cannot be imposed under them.  However, where the obligation is also subject to the provisions of section 16 of the Greater London Council (General Powers) Act 1974 then that will be effective to render the obligation enforceable.

In relation the section 106, the Court of Appeal held that

“The powers given by section 106 are powers to restrict the use of “the land” or to require “the land” to be used in a specified way. The difficulty with fitting the parking permit requirements into these powers is that the use which RBKC seeks to prevent is not use of any particular flat in 31 Egerton Gardens, but use of the highway for parking. Moreover an application for a parking permit (if it cannot be made on-line) can no doubt be made by post in a letter posted from anywhere or by personal application at the town hall. It does not have to be made within 31 Egerton Gardens itself. None of this seems to me to be use of 31 Egerton Gardens. Nor do I accept that provisions about how flats are marketed regulates the use of the flats themselves. The imposition of a covenant in any lease of a flat takes the case no further, because the subject-matter of the covenant is not the use of the flat”.

Clearly, this case will have significant ramifications in areas outside Greater London.  The Court of Appeal did suggest that measures such as excluding properties from the instrument creating a controlled parking zones could be adopted elsewhere.

But the immediate reaction of property owners subject to existing restrictions which are not also made under section or which apply outside Greater London remains to be seen.

Meyric will be organizing a breakfast briefing to discuss the topic in the near future.

Meyric Lewis appeared for the appellant, Mr Khodari, instructed by David Wadsworth of Blake Morgan LLP.