A Planning Application Responsibility clause addresses who must pay the costs associated with submitting and processing planning applications with local authorities. This includes application fees, professional fees for planning consultants and architects, environmental impact assessments, traffic studies, and other technical reports required to support the application. The clause matters because planning application costs can be substantial—ranging from thousands to hundreds of thousands of pounds depending on project complexity—and these costs are often incurred before any revenue is generated or the project is approved. By specifying payment responsibility upfront, the clause prevents disputes about cost-sharing and ensures both parties understand their financial obligations. It also clarifies whether costs are reimbursable if the application is refused or whether they represent a sunk cost borne by the responsible party.
This clause is particularly important in development agreements where one party (typically the developer) incurs significant upfront costs to advance a project that benefits both parties. The allocation of these costs directly affects project economics and each party's return on investment.
If you are the developer or party driving the project forward, you should typically bear planning application costs as part of your development risk—this is market-standard practice. However, negotiate clear limits: specify which costs are included (application fees, standard consultant fees) versus excluded (costs for additional studies requested due to the other party's requirements). If the landowner or other party requests additional studies or modifications that increase costs, require them to reimburse those incremental costs. Include a cap on total planning costs or require the other party's written approval before incurring costs above a specified threshold. If the application is refused due to factors beyond your control, clarify whether you can recover costs or whether they are entirely your loss.
Frequently Asked Questions
What does this clause mean in simple terms?
A Planning Application Responsibility clause addresses who must pay the costs associated with submitting and processing planning applications with local authorities.
Why should I care about this clause?
This includes application fees, professional fees for planning consultants and architects, environmental impact assessments, traffic studies, and other technical reports required to support the application.
What are my options?
The clause matters because planning application costs can be substantial—ranging from thousands to hundreds of thousands of pounds depending on project complexity—and these costs are often incurred before any revenue is generated or the project is approved.
How does this affect small businesses?
By specifying payment responsibility upfront, the clause prevents disputes about cost-sharing and ensures both parties understand their financial obligations.