What is a Section 106 Agreement?
Section 106 agreements are obligations to ensure that additional works related to a development are completed, in accordance with Section 106 (S106) of the Town and Country Planning Act (“TCPA”) 1990, between a local planning authority and a Developer.
They are a means of ensuring a consented development complies with the Local Plan policy with regard to its obligation to provide community facilities either directly or through off-site financial contributions.
These can be through the requirement that a certain portion of housing will be affordable, to provide public open space, or to mitigate the impact through an increase in the public transport/local school provision.
Policy obligations can be varied where it can be proven that the development is not viable with a full range of Plan policy obligations. Viability has to be proven through the submission of a Financial Viability Assessment.
When might a S106 Agreement be required?
This will vary, depending on each Local Planning Authority (LPA).
How are S106 Agreements calculated?
S106 agreements are agreed on a case-by-case basis, set by the relevant LPA.
An LPA cannot enforce S106 agreements to contribute to funding infrastructure which they have already associated to the contributions within the Community Infrastructure Levy.
When do I pay my Section 106 Agreement?
The enforcement will be contained within the agreement itself, stating how much is liable and the timescales in which this needs to be paid.
Can a S106 Agreement be changed?
A S106 can be negotiated between the Developer and the LPA, via a Deed of Variation. This needs to be in writing and signed by all parties.
It is noted that there are also terms of a procedure to renegotiate S106 agreements which are over 5 years old, in line with S106a of the TCPA 1990. However, this is only to the extent that the original agreement serves no purpose or if the new agreement is to serve the same purpose as the original just as well.
Are S106 Agreements binding?
They are binding on the property, unless demonstrated to the LPA that the inclusion of the agreement in its current form will make a development unviable.
S106a allows for both changes and discharging of S106 obligations between the property against which the obligations are enforceable and the LPA, and Section 106B contains an appeal mechanism.
Who is liable for the S106 agreement?
The land becomes liable, rather than the developer. However, it is the active developer’s responsibility to provide the contribution.
If the developer who agreed the S106 obligations no longer continues to build out their scheme, whoever is next to purchase the site will then become liable for any outstanding obligations within the agreement.
What can we do to help?
If you are wishing to negotiate the S106 agreement with the LPA, we can undertake a Financial Viability Assessments to demonstrate the impact the S106 obligations will have on the development.
We have a team able to cover work all across the South West including Cornwall, Devon, Dorset, Somerset, Wiltshire, Bristol, South Gloucestershire, Gloucestershire and Herefordshire.
Our Experience with Section 106
In 2024, we were successful in conversations with an LPA to remove (in full) a 30% on-site affordable housing obligation on a scheme of 60 houses. This was negotiated out on the grounds the developer is providing a serviced plot of land for a new primary school.
If you have any further questions, please get in touch with the Head of our Development team, Steve Maycock ([email protected]).
