What is a Section 106 Agreement?
Max Pickett, the founder of Roscoe Group Chartered Surveyors, explains what a Section 106 Agreement is and how it may affect your property/planning permission.
Section 106 Agreement
A Section 106 Agreement is a legal contract between property developers and local planning authorities that outlines obligations that the developer must undertake to reduce impacts on nearby communities.
Under the terms of a Section 106 Agreement, developers are obliged to make certain commitments in return for planning permission. These may include building a particular amount of affordable housing or ensuring that proposed developments do not cause environmental and social damage to the community.
The Town & Country Planning Act 1990 includes this as part of its procedures for approval in order to not only protect but also maintain an active role from government during development projects that can have significant implications on local communities long after they're constructed.
A Section 106 Agreement may be modified or discharged, however it is important to seek the assistance of an experienced planning expert when negotiating a Section 106 Agreement.
Example of when a Section 106 Agreement is required in planning
When a new residential development is constructed in an area with limited resources, the social and physical infrastructure can be put under extreme pressure. For example: there may not be enough space for new pupils within local schools or hospital beds for all of its residents; traffic on nearby roads becomes unbearable or people are forced into longer commutes due to lack of public transportation options etc.
To ensure that the new development will make a positive contribution to the local area and community, a Planning obligation must take into account how it balances pressure created by this growth with improvements to the surrounding areas.
What will the Section 106 Agreement cover?
When submitting a planning application to the Council, it is important that you take into consideration whether your development would have a significant impact on the area and community.
The S.106 will vary depending on the nature and scope of the development, as well as district needs. The most common obligations include but are not limited to:
Highways
Town Centre Improvements
Health
Public Open Space
Affordable Housing
Education
How long does a Section 106 Agreement last?
Under S106 (A) of the Planning Act, a developer that is bound by an obligation can seek to have it modified or discharged after five years.
The Town and Country Planning (Modification and Discharge of Planning Obligations) Regulations 1992 set out the procedure for making an application to amend planning obligations.
Modifying the obligation set out in a Section 106 Agreement is based on the principle that the process "no longer serves the same purpose or function" or can "continue to serve a useful purpose equally well".
How is a S106 Agreement Negotiated?
Negotiations for a S106 legal agreement are led by an allocated Planning Officer in discussion with the Developer and the Local Council.
Generally your allocated planning officer will negotiate two types of planning obligations to facilitate a proposed development/amendment to a Section 106 Agreement;
In-kind contributions - For example apprenticeships, using local labour and affordable housing.
Monetary contributions - These types of contributions fund interventions that mitigate the impact development has on our environment, such as planting trees and building new amenities for residents.
Section 106 Negotiation Process
We are experts in the field of planning law, and our success rates prove it. We have favourably helped numerous developers throughout the UK negotiate a Section 106 Agreement using the following process;
Stage 1
Financial Viability Assessment
The Applicant begins by instructing us to prepare a Financial Viability Assessment which will be submitted with a planning application to the appropriate Local Planning Authority.
Stage 2
Planning Application
Once the Planning Application has been validated by the council the Local Authority will appoint an independent assessor to review your submitted Financial Viability Assessment. The assessor will produce a response to the Financial Viability Assessment to either agree or disagree with the assumptions adopted in the submitted assessment.
Stage 3
Planning obligations
We will review the response and either agree a position which ensures the proposed level of planning obligations don’t hinder the deliverability of the project. Or we will enter into a period of negotiation during the determination period with the Council’s appointed assessor to reach an agreement on the adopted assumptions to reach an agreed viability position.
The Applicant should allow 4 weeks for this process.
Stage 4
Outlining Agreed Proposition
Once the assumptions are agreed a Financial Viability Assessment addendum will be produced outlining the agreed position.
Stage 5
Planning consent
The application will then be put forward to a committee where members will either approve or refuse the planning consent. Once a proposed scheme has been approved then a solicitor will be appointed to draft the Section 106 Agreement.
Stage 6
Section 106 Agreement
Solicitors will then be instructed to draft the S106 Agreement with the various professional inputs until it is in a final format that the Developer and Local Planning Authority are satisfied with.
Only once the S106 Agreement is signed can planning conditions be discharged and the consented scheme can be implemented.
Need help with a Section 106 Appeal?
If you need help with removing or negotiating a Section 106 Agreement get in touch with Roscoe Group.
We have a fantastic track record of achieving amazing results for our clients. We are experts in Financial Viability in Planning, and can provide you with all the guidance needed to succeed!
We're always happy to answer any questions you may have and advise accordingly. Feel free to contact us directly.
