S.106 Agreement plc: Understanding the Basics

If you are a property developer or investor in the UK, then you are likely to have come across the term “S.106 Agreement” or “Section 106 Agreement”. This is a legal document that is frequently used as part of the planning permission process for new property developments. In this article, we will provide an overview of S.106 Agreement plc and explain its key features and benefits.

What is an S.106 Agreement?

An S.106 Agreement is a legal agreement that is made between a property developer and the local planning authority. It is used to mitigate the impact that a new development will have on the local area and its community. The agreement sets out a series of obligations and responsibilities for the developer, which are designed to address issues such as affordable housing, infrastructure, and local amenities.

The obligations that are included in an S.106 Agreement can vary depending on the location and nature of the development. However, they typically include one or more of the following:

– Affordable housing: The developer may be required to provide a certain number of affordable homes within the development, or contribute towards the cost of affordable housing elsewhere in the local area.

– Education: The developer may be required to contribute towards the cost of new schools or improvements to existing schools in the local area.

– Transport: The developer may be required to contribute towards the cost of new transport infrastructure, such as roads, cycle paths, or public transport services.

– Community facilities: The developer may be required to provide new or improved community facilities, such as parks, sports facilities, or healthcare facilities.

Why is an S.106 Agreement important?

By setting out clear obligations and responsibilities for the developer, an S.106 Agreement helps to ensure that new developments are sustainable and meet the needs of the local community. It can also help to ease concerns from local residents, who may be worried about the impact that a new development will have on their local area.

In addition, an S.106 Agreement can be a crucial factor in obtaining planning permission for a new development. Many local planning authorities require developers to enter into an S.106 Agreement as a condition of planning permission being granted.

How does an S.106 Agreement work?

An S.106 Agreement is a legally binding document that is signed by both the developer and the local planning authority. The agreement is typically entered into at the same time as the planning permission is granted, although it can also be entered into later in the development process.

Once the agreement is in place, the developer will be required to fulfil the obligations that are set out in the agreement. Failure to do so can result in legal action being taken against the developer.

In some cases, the obligations included in an S.106 Agreement can be a significant burden for the developer. However, it is important to remember that the agreement is designed to ensure that the development is sustainable and meets the needs of the local community. By working closely with the local planning authority, developers can ensure that the obligations included in the agreement are reasonable and achievable.

Conclusion

An S.106 Agreement is an important legal document that is used to manage the impact of new property developments on the local area and its community. By setting out clear obligations and responsibilities for the developer, it helps to ensure that new developments are sustainable and meet the needs of the local community. While the obligations included in an S.106 Agreement can be a burden for developers, it is important to remember that they are designed to ensure the long-term success of the development. By working closely with the local planning authority, developers can ensure that their obligations are reasonable and achievable, while also addressing the concerns of local residents.