Planning obligations are legal obligations designed to mitigate the impacts of a development proposal that would otherwise be unacceptable in planning terms. These are typically achieved via a planning agreement entered into under Section 106 of the Town and Country Planning Act 1990, hence the frequently used term ‘Section 106 Agreement’.
Such agreements should only be used where it is not possible to address unacceptable impacts through a planning condition.
Planning obligations must meet three tests. They must be:
- 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.
Section 106 Agreements can be entered into by a person with an interest in the land and the local planning authority or via a unilateral undertaking entered into by a person with an interest in the land without the local planning authority. Unilateral undertakings are often more straightforward as they include fewer parties, however, they may not always be acceptable depending upon the circumstances.
Examples of contributions that could be included within a Section 106 Agreement are the provision of a certain percentage of affordable housing, a financial contribution for local education provision, or a requirement to provide a certain community facility at a fixed point in the development process.
Planning obligations run with the land, are legally binding and enforceable.
Developers may also provide other contributions towards infrastructure by way of highways contributions (under Section 278 of the Highways Act 1980) and/or the Community Infrastructure Levy (a fixed charge levied on new development to fund infrastructure).
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