What is a Section 106 agreement?

Under Section 106 of the Town and Country Planning Act 1990 (as amended), planning obligations, commonly known as S106 agreements are a legal agreement between the local planning authority and an applicant/developer. They're used to make a development acceptable in planning terms, which would not otherwise be acceptable. Often referred to as ‘developer contributions’, they're frequently used to secure local infrastructure to meet the needs of residents of new developments, lessen the impact of development and/or compensate for loss or damage caused by the development itself. A S106 agreement is usually completed following the resolution to grant planning permission, and should ensure the proposed development conforms to local, regional and national planning policies.

A ‘unilateral undertaking’ is a voluntary legal agreement entered into by developers to carry out works or to pay a financial contribution. The council isn't a party to this agreement.

Regulation 122 of the Community Infrastructure Levy Regulations 2010 (as amended) states that Section 106 agreements can only be used where they 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

If an obligation doesn't meet these tests, legally it can't be considered in the granting of the planning permission.