A section 106 agreement, also known as an s106 agreement, is often required by a local planning authority before planning permission will be granted. Our planning solicitors specialise in advising and negotiating section 106 agreements as well as other development agreements, such as those relating to highways and drainage
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What is a section 106 agreement and what does it cover?
A section 106 (or s106) agreement is a legal agreement between a local planning authority (LPA) and a landowner and often a developer, which relates to a planning permission, and is used to secure obligations which are necessary to make a development acceptable in planning terms.
The obligations vary widely and will depend on the development, and include requirements that a proportion of the houses on a new development be made available as ‘affordable’ dwellings, or that a new school be provided in connection with a large residential development (or a financial contribution paid towards improvements to the local school if a new school is not justified).
section 106 agreements can also be used to ensure that a farm worker’s dwelling is not occupied by anybody other than somebody engaged in agriculture or forestry.
Unilateral undertakings are often used instead of bilateral agreements, most commonly in connection with a planning appeal.
Can a section 106 be discharged?
It is possible to discharge, or vary, a section 106 agreement. The LPA can agree to discharge or vary an agreement at any time; or if five years have elapsed since the agreement was completed, and it no longer serves a useful purpose, the LPA should discharge it on receipt of an application.
If the LPA refuses the application (e.g. because it considers that the agreement still serves a useful purpose), that decision can be appealed.
What are my options if section 106 contributions make a development financially unviable?
If the agreement has not yet been signed, you should, at the earliest opportunity, discuss viability with the LPA, which will almost certainly require viability evidence if it is to agree to reduce the obligations sought.
If the agreement has been signed and the planning permission issued, the LPA will need to agree to the variation of the agreement in order to reduce the obligations.
What happens if you don't comply with a section 106 agreement?
The local planning authority can take action to require compliance. For example, if an agreement requires a £50,000 contribution which has not been paid, the LPA can bring a debt claim in the Court against the person who is liable to pay.
Other methods of enforcement include applications for injunctions, specific performance, or going on to the land and carrying out the work required. The costs of that can be recovered from the liable party.
Because of the contractual nature of section 106 agreements, immunity in respect of breaches cannot be obtained if the Council has not taken enforcement action within a specified period.
What other types of planning/development agreement are there?
In addition to section 106 agreements, developers can be required to enter into other agreements in connection with a development.
These include highways agreements (under section 38 and/or section 278 agreement of the Highways Act 1980) which provide for the local highways authority to adopt and maintain a new or altered highway if the developer builds to an adoptable standard and maintains for 12 months.
Other examples include section 104 agreements under the Water Industry Act 1991 relating to drainage.
How can our planning solicitors help?
We advise on the terms of section 106 and other development agreements, ensuring you know what the obligations are and how and when they need to be provided.
Our solicitors can recommend improvements which may be negotiated with the local authority e.g. pushing back the point at which obligations are triggered, and making it clear when parties to a section 106 agreement are no longer liable (because agreements run with the land as opposed to the original parties) and the circumstances in which the agreement will fall away (e.g. if the planning permission is never implemented).
Our expertise in action:
- Advising a national supermarket chain in respect of various section 106 agreements relating to planning permissions for a number of new stores;
- Advising housebuilders and developers in respect of section 106 agreements relating to a variety of obligations including affordable housing (both on and off site), financial contributions towards education, highways, health, public art etc;
- Preparing and advised on section 106 unilateral undertakings for clients who have appealed planning refusals;
- Advising clients in respect of variations to and discharges of section 106 agreements;
- Acting for farmers in respect of section 106 agreements relating to the occupation of agricultural workers dwellings;
Speak to a planning lawyer
Our team of planning solicitors are highly experienced in providing legal support for individuals, businesses and organisations seeking practical advice on section 106 and other development agreements.
If you would like to discuss your matter further with a member of our team, please complete our enquiry form below and one of our solicitors will be in touch.
