Chancery Lane mulls practice note on s.106 execution amid enforceability concerns

The Law Society is to consider issuing a practice note on due execution of section 106 agreements amid concerns over their enforceability.

Chancery Lane’s legal affairs and policy board was due to look at a draft note last week, but its meeting was cancelled because of the adverse weather conditions.

The note was prepared by the Law Society’s planning and environmental law committee after it came to its attention that the presumptions of due execution of deeds and documents do not normally apply to section 106 agreements.

This is because the relevant legislation in the Law of Property Act 1925 and the Companies Act 2006 talks about a “purchaser”, making it difficult to see how it applies to section 106 agreements.

As a result, a paper before the legal affairs and policy board said, “If the agreement has not been validly executed, it may be, at the least, difficult to enforce the agreement on the party who purported to execute the agreement.”

Concern has therefore arisen that there could be claims against solicitors for negligence where it turns out that the agreement was not validly executed.

As currently drafted, the note looks at the steps that can be taken to verify proper execution where the executing party is an individual, a company or a local authority.

It is understood that the legal affairs and policy board is currently considering how to progress its agenda from the November meeting. It is also looking at resolving an outstanding issue with the draft, so it may take time before the note is approved and issued.