Amenities abandoned as struggling firms fail to honour building promises

A Yorkshire Post investigation has found that so-called Section 106 agreements worth more than £5.3m are on the books of local authorities across the region, which represents money supposed to be spent on public projects.

But in many cases planning officers are struggling to collect the cash, either because builders have gone bankrupt in the recession or are struggling to find the funds as their profits dwindle.

At the height of the property boom, developers signed hundreds of Section 106 agreements with councils as a condition of receiving planning approval for major projects such as apartment blocks and large housing developments.

Some of the agreements were signed more than a decade ago, with several dating back to the , but many have not been paid and council lawyers in some areas have been unable to track down those responsible for paying out.

Cash has been earmarked to pay for public open space projects, public art or play facilities, and in a desperate attempt to save projects some councils are even considering chasing what is known as the “successor in title”.

This means that if a private homeowner has bought a house on a site which is still subject to a Section 106 charge, they may be asked to stump up a share of what is owing to a local authority to pay for a new park or sculpture.

Leeds Council confirmed that its agreements under Section 106 did contain a clause which allows the authority to chase anyone who has bought property from a developer which later defaults on obligations under the legislation.

A spokesman said: “A standard provision is made within all S106 agreements stating that any party named in an agreement includes the successors in title – indicating that any outstanding debts owing, for example should a debtor go insolvent, would be passed on to the successor.”

Planning campaigners yesterday said that councils should have asked for cash upfront, rather than waiting until a development was under way.

Specialist planning and property laywers added individual homebuyers should take extreme care before signing, because such statements raise the spectre of councils chasing innocent people for money they did not know they were responsible for.

Kathryn Lawrance, of specialist local authority lawyer Bevan Brittan, said people considering property on new developments should “exercise caution” and ensure that conveyancing solicitors check for unpaid section 106 land charges.

• More details and background report in Saturday’s Yorkshire Post