Developing property is never a simple process, but negotiating Section 106 agreements doesn’t need to be scary. This guide breaks down what Section 106s are, how they work, and what to expect as a homeowner or developer involved in the planning process. Let’s get started!
What are Planning Obligations?
Planning obligations, also generally secured by Section 106 agreements, which is a legal agreement that local authorities use to ensure new developments addresses any impacts of the development. Through obligations, councils can require things like affordable housing, road improvements, or financial contributions towards local services or improvements to an area. Don’t worry, as long as you understand the process, obligations don’t need to slow you down.
When are Obligations required?
Each council publishes guidelines on what size/type of projects trigger obligations. Check your local planning policy documents or give the council a call. In general, larger developments that significantly impact infrastructure will require obligations, but smaller projects may slip under the radar. Know your council’s thresholds up front to budget appropriately.
How are Obligations secured?
The two big mechanisms are Section 106 agreements and unilateral undertakings. S106s involve contracts between you, the council, and any other stakeholders. Unilateral undertakings are simpler documents just between you and the council. Both clearly lay out your obligations – just pick the right option based on your project’s scale. Take a look at our Practical Guide Planning Obligations for further information.
What can Obligations Cover?
Common obligations include affordable housing contributions, upgrading nearby roads or parks, and financial contributions for things like new schools or doctors’ offices. But Councils have flexibility – obligations must directly address your specific development’s impacts and can be negotiated. Use pre-application meetings to understand exactly what your project may trigger.
Trigger Points & Payment Schedules
Obligations are triggered on thresholds or milestones like starting construction, home occupancy rates, or phased deadlines. With the right preparation, developer obligations need not derail your dreams of development. Invest time up front understanding the process, and obligations can actually help your project gain local support while solving infrastructure needs. Let us know if you have any other questions!
Calculating Contributions
Contribution amounts are calculated based on factors like:
- Number/size of units: scale costs per bedroom, apartment, house etc.
- Number of new occupants: which could put pressure on existing services.
- Infrastructure impacts: Costs estimated for road, school, healthcare impacts potential bad on estimated trip rates.
- Housing need: Developers provide discounted homes or capital funding for affordable housing.
Benefits for Developers and Communities
s106 agreements balance development needs with community impacts. Benefits include:
- Infrastructure improvements: Road upgrades, new schools, healthcare centres.
- Affordable housing provision: Budgets help make homes accessible.
- Streamlined planning: Conditions lead to faster decision timeframes.
- Managing growth impacts: Cost sharing supports new residents’ needs.
Used properly, 106s revitalise areas through coordinated public-private infrastructure investment. Both sides achieve their goals through willingness to negotiate reasonably.
With open communication and an understanding of 106 processes and rationale, planning applications need not be intimidating for any party involved. Developers and residents alike can find satisfying solutions through cooperative approaches to developer contributions like Section 106.
Finding the Perfect Section 106 Agreement Template
As any developer knows, drafting a s106 agreement is a crucial part of obtaining planning permission. These complex legal contracts specify obligations that must be met in exchange for permission. While each agreement is unique, templates can help streamline the process. Many local authorities make s106 agreement templates available on their planning websites. This allows developers to get a head start in formatting obligations correctly. If your council lacks templates, try searching online – other planning departments may share templates that can be adapted.
Submitting a draft ‘Heads of Terms’ document with your planning application is also recommended. This outlines proposed obligations at an early stage. Some councils require Heads of Terms for applications to be validated. To assist in drafting Heads of Terms, Planning House have created a TEMPLATE you can use as a starting point. While not comprehensive, it covers common obligation topics to get your proposal discussion started.
Of course, proper legal counsel is still essential when finalising any s106 agreement. Developers must also ensure obligations won’t undermine a project’s financial viability. With templates providing structure and early talks establishing expectations, negotiations can progress more smoothly toward permission. Let me know if you need any other s106 tips!
How can Planning House Help?
A town planner can provide you with the guidance you need for a smooth transition please feel free to CONTACT US to discuss your situation.
If you’re not sure we’re the right fit for you then take a look at our blog on When to Hire a Town Planner and our download on choosing a Town Planner to help you find a town planner that’s right for you.
Related Content
More information about Planning Obligations / s106 Agreements can be view in the National Planning Practice Guidance.
Take a look at our eBook: CIL & s106 – which gives the basics on CIL (Community Infrastructure Levy) and developments which may trigger the need for additional works or financial contribution (via s106 agreement). It’s better to know in advance what the financial implications might be.
If you are in a situation where you need to look at modification of a s106 Planning Agreement take a look at our Practical Guide: Modification of s106.
