Section 106 planning obligations

Planning obligations, often referred to as section 106 agreements, are a key mechanism in the planning system for making development acceptable which would otherwise be unacceptable in planning terms. They are used to achieve planning objectives, lessen the impact of development and/or compensate for loss or damage caused by development. Whilst planning obligations are unlikely to be required for all kinds of development they can nevertheless be requested on a development of any size or type.

The term 'planning obligation' can relate to two things:

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  1. a bilateral (two parties) or multilateral (multi-party) agreement between a party/parties with an interest in the land (the “developer”) and the Council whereby all parties agree to do certain things;
  2. a sole undertaking made by the developer where just the developer agrees.

In both cases the planning obligation must be formalised and shall identify:

  • the land in which the person entering into the obligation is interested;
  • the person entering into the obligation and their interest in the land (all parties with an interest in the land concerned should be party to the planning obligation);
  • the local planning authority by whom the obligation is enforceable; and
  • that the obligation is a planning obligation for the purposes of section 106 of the Town and Country Planning Act 1990.

A planning obligation runs with the land, which means that successive owners are bound by the terms of the planning obligation. As a consequence, the obligations may be enforced against both the original covenantor and against successors in title.

Legally a planning obligation must be:

  • Necessary to make the proposed development acceptable in planning terms;
  • Directly relate to the proposed development; and
  • Fairly and reasonably relate in scale and kind to the proposed development.

The use of planning obligations is governed by the fundamental principle that planning permission may not be bought or sold. Obligations cannot be used as a means of securing a share of the developer’s profit or to solve existing problems, however, they can be used to help resolve an existing problem if the proposed development would make the situation worse.

There are three general aims to planning obligations which will vary relative to the circumstances involved. These are as follows:

  1. achieving planning objectives – e.g. securing the provision of affordable housing, in-line with policies from the Development Plan.
  2. lessening the impact of development – e.g. if a new development would give rise to pressure on the existing education infrastructure then contributions could be sought towards a new education facility. 
  3. compensating for loss or damage caused by development – e.g. offset through substitution, replacement or regeneration, i.e. a landscape feature of biodiversity value, open space or a right of way.

For more information about how Section 106 contributions for open space are maximised please see our Public Open Space Section 106 Contribution Allocation Protocol and our Application for Section 106 funding for Amenity Spaces form.

Pre-application advice

A strong emphasis is now placed on the increasing importance of pre-application discussions and front-loading the planning process as a method of creating a faster, more responsive and transparent planning system.

A pro-active development management system requires the process of negotiating planning obligations to be done at the earliest opportunity and in an open, fair and reasonable manner.

Agreeing draft heads of terms

In order to address and agree issues that would need to be covered by planning obligations at an early stage; the Council will require, as a minimum, draft heads of terms to be submitted as part of the planning application. If the development proposal is such that a planning obligation is required and the planning application is not accompanied by an agreed draft heads of terms it might not be registered.

The draft heads of terms should set out clearly the obligations that the developer/landowner is willing to be bound by, in order to meet the needs generated by the development that are not going to be met as part of the development scheme itself. The draft heads of terms should also include the agreed timing/triggers for satisfying the obligations. A draft section 106 template is available on the Council’s website to assist applicants.

It is important to note that where a proposal is such that a planning obligation is required, planning permission will not be granted until the Council receives a planning obligation completed to its satisfaction.

Whilst planning obligations are private contracts negotiated between the landowner/developer and the Council, their content is shaped by the planning policies which inform them.

When a planning application is submitted and a planning obligation is required, the content of the draft head of terms will be available for public view alongside the submitted plans, application form and any other associated information that has been submitted with the proposal. Residents and other interested parties can comment on the content of the obligation relative to the applicable planning policies.

Planning obligations are rigorously monitored by the Council’s planning obligation monitoring officers. Once a planning obligation is completed, it is recorded on a database in order to facilitate the monitoring process. It is vital that all parties understand their obligations so that they know what is required of them and when. Should you have any questions relating to your obligations, you should contact your planning obligations monitoring officer.

Where schemes have been closely monitored the community contributions expected from the development have been secured. This has had the twin benefits of the helping the existing community more readily accept the new development and made it easier at the transaction stages when confirmation has been sought that compliance has been made with the obligations.

If a breach of an obligation occurs, the relevant party will be given an opportunity to remedy the breach, failing which, the matter will be investigated and, if not resolved, may be enforced against.

The Council can enforce planning obligations in two ways;

  1. through the courts by application for an injunction;
  2. by carrying out any operations required in the planning obligation and recovering the cost from the person(s) against whom the obligation is enforceable.

Planning obligations are registered as local land charges and will be revealed in any local land charges search until such time as they may have been discharged by way of formal application to the Council, in which case the local land charges entry may be removed from the Register. Consequently, if land is subject to a planning obligation which has not been (or is not being) complied with, it may become difficult to dispose of the land given that obligations pass to successors in title.

A section 106 planning obligation may be modified (Deed of Modification) or discharged in two ways:

  1. within five years of the date of the completion of the obligation, at any time by agreement between the Council and the person or persons against whom the obligation is enforceable;
  2. after five years beginning with the date the obligation was legally completed (or a later date specified in the obligation itself).

In case 1, a request for agreement can be made through the Council's pre-application advice service, setting out clear reasons why this is necessary.

In case 2, the proposal for modification or discharge should be submitted to the Council as a formal application. The Council must then decide the application in one of the following three ways:

  1. if the obligation is no longer needed to serve its original intended purpose, it may be discharged
  2. if the Council considers that the obligation is still needed to serve its original intended purpose, but that this can be achieved by modifying the obligation in the way proposed in the application, the Council can agree to modify the obligation
  3. if the Council consider that the obligation still serves a useful purpose, it can refuse to discharge the obligation

A full list of fees for section 106 planning obligations can be found in our Fees and Charges document

N.B. These do not include any legal charges that may be incurred and the cost of any application to modify or vary a planning obligation.