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Section 106 or S106

Planning obligations under Section 106  of the Town and Country Planning Act 1990 (as amended), commonly known as a Section 106 agreements, is a mechanism which makes a development proposal acceptable in planning terms and are focused on site specific mitigation of the impact of development. 

Planning obligations under Section 106 of the Town and Country Planning Act 1990 (as amended), commonly known as a Section 106 agreements, is a mechanism which makes a development proposal acceptable in planning terms and are focused on site specific mitigation of the impact of development.

A Section106 obligation 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 authority (or, to the Greater London Authority) on a specified date or dates or periodically.

The planning obligation is a formal document, a deed, which states that it is an obligation for planning purposes, identifies the relevant land, the person entering the obligation and their interest and the relevant local authority that would enforce the obligation.

The legal tests for when a Section106 agreement should be used are set out in regulation 122 and 123 of the Community Infrastructure Levy Regulations 2010 as amended. The tests are:

  • Necessary to make the development acceptable in planning terms
  • Directly related to the development; and
  • Fairly and reasonably related in scale and kind to the development.

S106 Agreements and the Community Infrastructure Levy (CIL)

The Government has viewed Section 106 agreements as providing only a partial and variable response to capturing funding contributions for infrastructure. As such, provision for CIL is now in place in the 2008 Planning Act.

In terms of developer contributions, CIL has not replaced Section 106 agreements, the introduction of CIL resulted in a tightening up of the Section 106 tests. Section 106 agreements, in terms of developer contributions, should be focused on addressing the specific mitigation required by a new development. CIL has been developed to address the broader impacts of development. There should be no circumstances where a developer is paying CIL and S106 for the same infrastructure in relation to the same development.

The balance between the use of S106 and CIL will be different depending on the nature of the area and the type of development being undertaken.

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