Section 106 query when selling home.

[TheFungle]

I'm currently in the process of selling my first house, it's a bog standard 3 bed semi built in 2008 on a nice estate and the purchasers nor myself have a chain so it should be super straightforward, or so you would think.

The purchasers solicitors have asked that all 'obligations under the S106' have been met. This has come rather late in the process and frustratingly the local council charge £90 and a 28 working day turnaround time. S106 info has been provided but it doesn't give the answers they appear to want.

As a seller, I'm I obligated to provide this info? A quick Google would suggest that any issues with the S106 are with the developer and not individual households.

http://www.pas.gov.uk/3-community-infrastructure-l...

I'm getting increasingly frustrated with this as the purchasers solicitor appears to be asking 'incorrect' questions, this is just another delay that I don't need!

[Tom_C76]

Depends. If the developer went bust before completing the general estate works (landscaping of public spaces for example) the council could in principle come round to do the work and surcharge the residents of the estate for the costs.

[V8RX7]

Tom_C76 said:

Depends. If the developer went bust before completing the general estate works (landscaping of public spaces for example) the council could in principle come round to do the work and surcharge the residents of the estate for the costs.

Can anyone give an example of where this has happened ?

[barryrs]

Normally these items would be protected by a bond in the form of a cash payment or insurance backed so im not aware of any cases of residents having to pay.

[Ean218]

TheFungle said:

As a seller, I'm I obligated to provide this info?
I'm getting increasingly frustrated with this as the purchasers solicitor appears to be asking 'incorrect' questions, this is just another delay that I don't need!

I've just been through similar, you aren't obligated to answer anything, especially when you have no idea of the answer. The solicitors can ask whatever stupid questions they like and it messes up the deal for the poor sod buying the house.

[TheFungle]

barryrs said:

Normally these items would be protected by a bond in the form of a cash payment or insurance backed so im not aware of any cases of residents having to pay.

My understanding is that the S38 deals with the adoption of roads and the quality of estate works; there is a bond placed against the development until such time as the road is adopted by the council.

The S106 deals with the allocation of social housing and other conditions of the development and to my mind, as a resident, is something that I and the future owner should have no involvement in.

Awaiting final answer from my solicitor tomorrow but will no doubt be stumping up the cash.

[blueg33]

S106 nearly always run with the land (occasionally there is a housebuyer carve out, but these are rare). So the owner of the land is responsible, that's why the solicitors are asking the question and its a reasonable question.

When the OP bought his solicitor should have asked the same question if he didn't he needs shooting! If he did, then the answers should be available.

The original purchaser's contract with the developer should have obligated the developer to discharge the S106 obligations, so somewhere there should be evidence that these have been discharged.

Where it all goes wrong is if the developer went bust. All bets are off and the Council can almost certainly look to the current landowners to satisfy the S106 obligations.

OP, how long have you lived in the house? Were you the first purchaser? What does the S106 say, quite often obligations fall away after a time period, but some may last in perpetuity. If you were the first purchaser, your replies to enquiries and purchase contract should give you the answers. If you are not the first purchaser then you need to find the replies to enquires your solicitor made when you purchased. If you solicitor didn't ask the questions then he has some bigger questions to answer as I believe that he has been negligent.





Footnote. IANAL I am a developer and have run land and planning for 30 years, I have negotiated countless S106 agreements.

[TheFungle]

blueg33 said:

S106 nearly always run with the land (occasionally there is a housebuyer carve out, but these are rare). So the owner of the land is responsible, that's why the solicitors are asking the question and its a reasonable question.

When the OP bought his solicitor should have asked the same question if he didn't he needs shooting! If he did, then the answers should be available.

The original purchaser's contract with the developer should have obligated the developer to discharge the S106 obligations, so somewhere there should be evidence that these have been discharged.

Where it all goes wrong is if the developer went bust. All bets are off and the Council can almost certainly look to the current landowners to satisfy the S106 obligations.

OP, how long have you lived in the house? Were you the first purchaser? What does the S106 say, quite often obligations fall away after a time period, but some may last in perpetuity. If you were the first purchaser, your replies to enquiries and purchase contract should give you the answers. If you are not the first purchaser then you need to find the replies to enquires your solicitor made when you purchased. If you solicitor didn't ask the questions then he has some bigger questions to answer as I believe that he has been negligent.





Footnote. IANAL I am a developer and have run land and planning for 30 years, I have negotiated countless S106 agreements.

Thanks

I've got our pile of solicitors letters from when we purchased the house so I'll have a read through them.

To clarify, I'm the first owner of the house and we've owned it since 2008.

At what point in a development would you expect that all conditions have been discharged?

[blueg33]

TheFungle said:

blueg33 said:

S106 nearly always run with the land (occasionally there is a housebuyer carve out, but these are rare). So the owner of the land is responsible, that's why the solicitors are asking the question and its a reasonable question.

When the OP bought his solicitor should have asked the same question if he didn't he needs shooting! If he did, then the answers should be available.

The original purchaser's contract with the developer should have obligated the developer to discharge the S106 obligations, so somewhere there should be evidence that these have been discharged.

Where it all goes wrong is if the developer went bust. All bets are off and the Council can almost certainly look to the current landowners to satisfy the S106 obligations.

OP, how long have you lived in the house? Were you the first purchaser? What does the S106 say, quite often obligations fall away after a time period, but some may last in perpetuity. If you were the first purchaser, your replies to enquiries and purchase contract should give you the answers. If you are not the first purchaser then you need to find the replies to enquires your solicitor made when you purchased. If you solicitor didn't ask the questions then he has some bigger questions to answer as I believe that he has been negligent.





Footnote. IANAL I am a developer and have run land and planning for 30 years, I have negotiated countless S106 agreements.

Thanks

I've got our pile of solicitors letters from when we purchased the house so I'll have a read through them.

To clarify, I'm the first owner of the house and we've owned it since 2008.

At what point in a development would you expect that all conditions have been discharged?

In terms of when the S106 obligations are discharged depends solely on the wording of the s106. Normally certain works and payments are linked to things like start on site, number of occupations, last occupation etc. A well negotiated one will have a longstop date by which time if not fulfilled the obligations fall away (these are normally linked to an action by the planning authority).

If you are the first owner, your solicitor and the purchase contract should have covered off the s106 obligations so that the developer carries liability.

Do you mind if I ask which developer and where in the UK?

[TheFungle]

blueg33 said:

In terms of when the S106 obligations are discharged depends solely on the wording of the s106. Normally certain works and payments are linked to things like start on site, number of occupations, last occupation etc. A well negotiated one will have a longstop date by which time if not fulfilled the obligations fall away (these are normally linked to an action by the planning authority).

If you are the first owner, your solicitor and the purchase contract should have covered off the s106 obligations so that the developer carries liability.

Do you mind if I ask which developer and where in the UK?

Not at all.

Originally it was Stamford Homes who later became/merged with Linden Homes and the development is in Lincolnshire.

[blueg33]

Ok so Linden still exist, now owned by Galliford Try (if I remember correctly), I wonder if the entity named on the S106 still trades? Developers often use SPV's to ring fence risk. Linden are professional so I would expect the S106 stuff to be sorted. Risk to the buyer is very low.

Hope you find the answers in the paperwork

[Rangeroverover]

If you are using the same solicitor as when you bought the house the answer will already be in the file, if he didn't ask it at time of your purchase he certainly should have done.

As the previous answer says, don't lose any sleep over it its more likely to have shergar in the garage

[MrBarry123]

Bumping this as we are selling and the buyer’s solicitor is requesting the same regarding the S106.

I’ve asked our solicitor (the same solicitor we bought through in 2019) and their response was “we may have done but can’t rely on information from 6 years ago”.

Eh?