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Section 106 agreements

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Planning obligations under Section 106 of the Town and Country Planning Act 1990 , commonly known as section 106 agreements, are a mechanism by which impacts of a development can be mitigated by legal agreement. Developers can offer, through these documents, items such as financial contributions to infrastructure, public open space and other mitigation works.

There are limitations on what kinds of obligations can be entered into, which are set out in the Community Infrastructure Levy Regulations 2010. The parameters are that, to be taken into account by the Local Planning Authority, the obligations must be:

  • necessary to make the development acceptable in planning terms;
  • directly related to the development; and
  • fairly and reasonably related in scale and kind to the development.

In most cases, all those with an interest in the development land are required to sign the section 106 agreement. This is because it automatically binds successors in title, i.e. those that may later buy the land or part of it. In some circumstances some parcels of land may not need to be bound (if there is little or no development on the land, and/or the owners either cannot be found or will not sign).

Section 106 agreements can be varied once entered into by using  section 106A of the Act. This allows for variations of existing agreements either by agreement at any time between the authority and the persons against whom the obligations are enforceable, or by application to the Local Planning Authority after 5 years where it is considered that the planning obligation no longer serves a useful purpose.Where modifications to planning permissions are made under section 73 of the Town and Country Planning Act 1990, where the permission is tied into an existing section 106 agreement, a supplemental agreement must be entered into. 

Ashfords has extensive experience in drafting and negotiating section 106 agreements on behalf of developers, local planning authorities, affordable housing providers, landowners and mortgagees.

Click here to read more on Planning obligations and legislation.

Specialisms

  • Advice on type of planning obligations
  • Modifying or discharging section 106 agreements
  • Section 73 applications
  • Community Infrastructure Levy (CIL)

Frequently Asked Questions

  • Are planning obligations negotiable?

    There may only be limited opportunity to negotiate site specific items required to mitigate the impact of the development such as road improvements. Planning obligations should however only be sought by a Local Planning Authority where they are necessary to make the development acceptable in planning terms. Where local planning authorities are requiring affordable housing obligations or contributions to infrastructure, the guidance says that Local Planning Authorities should be flexible in their requirements and they make take viability information into account.

    Ashfords can advise you further on any contributions required by a Local Planning Authority.

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