Karen Jones (pictured left) and Tatiana Zanré (pictured right) in Blandy & Blandy’s planning & environmental law team, discuss Section 106 Agreements and their role in obtaining planning permission for development.
What is development?
Development is defined in section 55(1) of The Town and Country Planning Act 1990 as ‘the carrying out of building, engineering, mining or other operations in, on, over or under land, or the making of any material change in the use of any buildings or other land.’
What is a Section 106 Agreement?
A Section 106 (s106) Agreement is a legal agreement between developers and local planning authorities (LPAs) that require developers to contribute towards a range of infrastructure and services, such as community facilities, public open space, transport improvements and/or affordable housing.
They bind land and are enforceable against successors in title to the original party. They 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. s106 agreements are a useful means of allowing planning permission to be granted by mitigating or addressing any potential negative consequences of development.
Where the LPA is unwilling to enter into a s106 Agreement, the developer can still use a planning obligation to overcome objections to the grant of permission by offering a unilateral undertaking to bind the land. This is made by the landowner or developer and given voluntarily to the LPA. It is important to note that unilateral undertakings are more common at a planning appeal, if it transpires that the LPA will not take part in a bilateral agreement, and are used to address reasons for refusal given by the LPA in refusing the permission. Due to their unilateral nature, the developer or landowner making the unilateral undertaking will not receive any obligations or agreements from the LPA in return.
When might the local planning authority require a s106 Agreement?
Regulation 122 of the Community Infrastructure Levy Regulations 2010 states that a planning obligation cannot be a reason for the grant of planning permission unless it is;
- Necessary to allow the proposed development to be acceptable from a planning perspective
- Related directly to the development proposed
- Reasonably and fairly related in both kind and scale to the development proposed
What planning obligations can be agreed under a s106 Agreement?
The provisions of s106 of the Town and Country Planning Act 1990, provide that the following obligations can be secured under a s106 Agreement;
(a) restricting the development or use of the land in any specified way;
(b) requiring specified operations or activities to be carried out in, on, under or over the land;
(c) requiring the land to be used in any specified way; or
(d) requiring a sum or sums to be paid to the authority on a specified date or dates or periodically.
S106(9) states that planning obligations and any modifications to the obligations must be entered into by way of a deed, (either unilaterally or bilaterally). They must:
- State that the obligation is a planning obligation
- Identify the land concerned
- Identify the person entering into the planning obligation
- State the interest that the person entering into the planning obligation has in the land identify the LPA with the power to enforce the planning obligation
If these requirements are not satisfied in the legal drafting the obligations will not be effective to be offered to overcome objections to the grant of planning permission.
Are there time limits for entering into a s106 Agreement?
There are no statutory deadlines imposed but often deadlines arise to enter into s106 agreements to meet LPA timeframes or to accommodate appeal time limits. It is important to establish any timescales involved to ensure that an appropriate agreement can be completed ahead of the deadline, to prevent further complications in obtaining planning permission and enabling development.
Who is bound by the s106 Agreement?
Once a s106 Agreement has been completed, it will bind both the current landowners and others with an interest in the land (who must be a party to the S106 obligations) who enter into the Deed and once completed will continue to bind successors in title to the land in question. As a result, the s106 Agreement must be executed to bind anyone who has an interest in the land, such as developers with option arrangements registered at the land registry, mortgagees or tenants of the land/property, who must all be included as parties to and sign the s106 Agreement. It is therefore important that sound advice is sought when negotiating or producing s106 Agreements, to ensure all obligations are properly drafted and understood.
For further information or legal advice, please call 0118 951 6800 or visit www.blandy.co.uk.
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