Section 106 Agreements

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. 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.
• 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 - 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.

Where modifications to planning permissions are made and where the permission is tied into an existing section 106 agreement, a supplemental agreement must be entered into as well.

We have extensive experience 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.