News & Insights

What is a Section 106 Agreement?

Lauren Walker, an associate in our Real Estate team, explains what a Section 106 Agreement is and how it may affect your property.

A Section 106 Agreement (S106 Agreement) is an agreement entered into between a local authority and a landowner and/or developer under section 106 of the Town and Country Planning Act 1990. The agreement will contain planning obligations which the local authority wish to secure, or which the developer wishes to offer, in return for planning permission being granted.

A local authority may require that a S106 Agreement is entered into where the following tests are met:

  • The planning obligation is necessary to make a development acceptable in planning terms;
  • The planning obligation is directly related to the development; and
  • The planning obligation is fairly and reasonably related in scale and kind to a development.

Section 106 of the Town and Country Planning Act 1990 provides that a planning obligation under a S106 Agreement can:

  • restrict the development or use of the land in any specified way;
  • require specified operations or activities to be carried out in, on, under or over the land;
  • require the land to be used in any specified way; or
  • require a sum or sums to be paid to the local authority on a specific date or periodically.

A planning obligation may be unconditional or subject to conditions and may impose restrictions or requirements indefinitely or for specific periods.  Examples of planning obligations include a requirement for payment towards infrastructure such as access roads or towards other community projects such as schools or parks as well as obligations to provide community facilities such as a park, green space or for a specific number of dwellings to be affordable housing dwellings within a development site.

A S106 Agreement may also refer to obligations to make Community Infrastructure Levy (CIL), Suitable Alternative Natural Greenspace (SANG) or Strategic Access Management and Monitoring (SAMM) payments.

The planning obligations within a S106 Agreement are automatically registrable as local land charges within the public registers maintained by the local authorities. A local authority may also look to register the S106 Agreement on the title to the property at HM Land Registry by way of a unilateral or agreed notice. Such a notice or restriction is registered on the title and prevents a sale or other transaction unless specific consents or certificates are obtained.

A S106 Agreement once completed will bind successors in title to the landowners who enter into the obligations, without there being a need for any additional deeds of covenant or other steps taken. The obligations within the S106 Agreement therefore bind any purchasers, mortgagees and tenants of the land.

If you require assistance with a S106 Agreement, please contact our Real Estate team.

This article forms one of a series of planning articles we have released. Please see the other related articles as follows: