Section 106 Agreements

What are they and what is their purpose?

The term Section 106 refers to that part of the Town & Country Planning Act 1990.

Section 106 of the Act, in conjunction with Department of Environment Circular 5/05, allows for Local Planning authorities and persons interested in land to agree contributions, arrangements and restrictions as Planning Agreements or Planning Obligations.

Applicants can offer such agreements unilaterally or negotiate and agree them as support for their application to make it accord with local planning requirements, but without some of the rigorous controls of Planning Conditions under s 70(1).

It relates to monies paid by developers to Local Planning Authorities in order to offset the costs of the external effects of development. For example, if a developer were to build 100 new houses, there would be effects on local schools, roads etc., which the Local Authority would have to deal with. In that situation there might be a Section 106 agreement as part of the granting of planning permission. The developer might agree to make a contribution towards the provision of new schools. Also, where a developer were to build new houses the Local Planning authority may require some of those houses to be made affordable and available for occupation by local persons. These affordable homes would be secured through a section 106 agreement.

Section 106 arrangements are currently being reviewed by the Department for Communities and Local Government.