What is a Section 106 Agreement?
What are planning obligations used for?
Who can enter into a Planning Obligation?
What are the costs of entering into a Planning Obligation?
How are Planning Obligations secured?
How are Planning Obligations enforced?
How are Planning Obligations recorded?
Can planning permission be issued without completion of a planning obligation?
Section 106 (S106) Agreements are private legal agreements between Local Planning Authorities and developers (and any others that may have an interest in the land) made pursuant to that section of the Town and Country Planning Act 1990 as modified by s.12(1) of the Planning and Compensation Act 1991. They are intended to make acceptable development which would otherwise be unacceptable in planning terms.
In a limited number of cases, where only the applicant needs to be bound by a planning obligation and not the Planning Authority, instead of agreeing obligations through the standard process of discussion (negotiation and agreement) it may be acceptable and advantageous for the developer to make a unilateral offer or "unilateral undertaking" to the Planning Authority to settle obligations relevant to their planning application.
Benefits will be secured either in kind or via financial contributions depending on what is required. The commonest issues that arise are affordable housing, primary and secondary education, urban open space, highways improvements and Healthcare. This list is not exhaustive and any other relevant and necessary matter may be included within a Planning Obligation that cannot be secured through the normal planning process but is required in order for the development to be deemed acceptable in planning terms.
Planning Obligations are usually completed following the resolution to grant planning permission (normally major developments) to secure community infrastructure to meet the needs of residents in new developments and/or to mitigate the impact of new developments upon existing community facilities or infrastructure. They can also be used to restrict the development or use of the land in a specified way or require specific operations or activities to be carried out on the land. It should be noted that the planning permission is only issued after the completion of such obligations.
Planning Obligations are legally enforceable against the owner(s) (including their successors in title) of the land to which they relate. This means that generally only owners can enter into obligations even if a prospective purchaser/developer of the land has applied for the planning permission (although it is possible for prospective purchasers to be party to the obligations where they have exchanged contracts to purchase).
Because planning obligations run with the land (meaning any outstanding obligations will be transferred with the land), all owners, lessees and mortgagees must be signatories. Planning obligations can have significant effects on the use and therefore the value of land. Before anyone enters into a planning obligation we strongly advise that they take independent legal advice or contact the Planning Services Section for pre-application advice.
Since the 6th of April 2015 and the application of the limitation in regulation 123(3) of the Community Infrastructure Levy Regulations 2010, Local Planning Authorities have not been entitled to take into account a financial contribution ‘for the funding or provision of an infrastructure project’ where five or more separate planning obligations have already been sought for the funding or provision of that project from other sources (i.e. financial contributions secured in other Section 106 agreements). All payments, counting back to 6 April 2010, are taken into account.
“Infrastructure” has a wide legal definition in the Planning Act 2008 and includes (but is not limited to) highway projects, open space, educational, sport and health facilities and flood defences.
Despite the 2008 Act specifically referring to Affordable Housing as an infrastructure project type (s.216(2)(g)) this was deleted by application of the Localism Act 2011 and Reg.63 of the 2010 CIL Regulations. As such, pooling arrangements do not apply to affordable housing contributions.
The applicant will be expected to pay the reasonable legal expenses of the District Council associated with the preparation and completion of the Agreement.
The Council is committed to providing good quality advice to all applicants before they submit a formal application. Applicants are encouraged where possible to submit a Pre-application (PREAPP) for complex major applications so that the key principles of the S106 requirements / obligations (or ‘Heads of Terms’) can be identified and agreed as early as possible in the application process, enabling a more straightforward and efficient determination of the formal application. The Council makes a charge for this service.
The pre-application advice charging schedule can be found here Pre-Appllcation Fee Guidance
Planning obligations are secured by a formal deed whether in the form of a Unilateral Undertaking signed by the parties giving the obligations or by Agreement. When it is by agreement, it will also be signed and sealed by the District Council. It will contain covenants (the planning obligations) covering the things the landowner agrees to do and / or agrees not to do.
The planning obligation will detail the circumstances and timescales within which these obligations will occur. It will also contain a plan showing the land to which it relates.
Planning Obligations are enforceable by Derbyshire Dales District Council:
- In the courts by application for an injunction or recovering contributions payable;
- By carrying out any operations required by the Planning Obligation and recovering the cost from the person(s) against whom the obligation is enforceable.
As a Planning Obligation runs with the land to which it relates, it is registered as a Local Land Charge on the Land Charges Register and will be revealed in any search submitted on behalf of a potential purchaser of an individual plot or entire development site. It is therefore important that all obligations are complied with as non compliance may be revealed in a search, which is likely to put off potential purchasers.
No, where it has been identified that a development proposal requires matters to be dealt with by way of a planning obligation in order to enable the development to be deemed as acceptable in planning terms, planning permission cannot be issued until the associated planning obligation has been checked by our Solicitors and subsequently signed and dated by all parties (thereby completed).
Derbyshire Dales District Council
Phone: 01629 761331