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Section 106 Agreements - a note for anyone developing land

18 January 2019

When granting planning permission for development, local planning authorities often impose planning obligations on the party promoting the development. These obligations are usually contained in what are known as Section 106 Agreements or Planning Agreements – separate legal agreements that sit alongside the planning permission. Those agreements will, generally, bind the land to which the planning permission relates – so anyone who owns that land will be bound by the obligations.

The negotiation of planning obligations, and the Section 106 Agreements in which they sit, can be a protracted and frustrating process for all concerned. We set out in this briefing some tips on achieving a more pain-free process.

What is a Section 106 Agreement?

Section 106 of the Town & Country Planning Act 1990 provides that a local planning authority (LPA) may enter into an agreement with any person interested in land in their area for the purpose of restricting or regulating the development or use of the land. That, in a nutshell, is a Section 106 Agreement.

From a practical point of view, a Section 106 Agreement enables a developer to obtain planning permission. If the circumstances allow, without it the LPA could simply refuse to grant planning permission – on the basis that no mitigation is (or can be) provided to offset the downside of the proposed development (such as increased demand for school places in an area).

Any planning obligations must, however, relate to the proposed development. Frequently encountered obligations include:-

  • the provision of affordable housing;
  • a financial contribution towards social, education or recreational facilities;
  • the construction of recreational facilities – such as a playground;
  • the provision of car club facilities;
  • a requirement to include renewable energy sources within the development;
  • local employment and business initiatives;
  • a requirement to develop and monitor a travel plan for the development.

Please click 'download files' to read the full PDF.

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