Section 106 Legal Obligations

Guidance on Planning Obligations

Purposes of Planning Obligations

Under the Town and Country Planning Act 1990, Planning Obligations may be sought when planning conditions are inappropriate to ensure and enhance the quality of development and to enable proposals that might otherwise have been refused to go ahead in a sustainable manner. To meet the tests, as set out in Circular 05/2005, they should be:-

Necessary
Relevant to Planning
Directly related to the proposed development
Fairly and reasonably related in scale and kind to the proposed development
Reasonable in all other respects

What are Planning Obligations

Planning Obligations are obligations relating to a person's land which binds any person that has an interest in the land. They are made by deed under Section 106 of the Town and Country Planning Act 1990.

Planning obligations may be used to:-

require a sum or sums to be paid to the authority on a specified date dates periodically;
restrict the development or use of the land in a specified way;
require specified operations or activities to be carried out on the land;
require the land to be used in a specified way

They provide a means of ensuring that developers contribute towards the infrastructure and services that Stafford Borough Council believe necessary to facilitate proposed developments. Contributions may be either in cash or kind.

Who may enter into a Planning Obligations

Planning obligations are legally enforceable against the owner(s) and any person that has an interest (including their successors in title) in the land to which they relate. This means that only owners and those having an interest in the land can enter into obligations even if a prospective purchaser/developer of the land has applied for planning permission (although it is possible for prospective purchasers to be party to the obligations where they have exchange contracts to purchase).

Because planning obligations run with the land all owners, lessees mortgages and any other person having an interest in the land must be signatories. Planning obligations have significant effects on the use and therefore the value of land. Before anyone enters into a planning obligation we strongly advise that they take independent legal advice.

What are the different types of Planning Obligations and when are they appropriate?

Planning obligations are normally secured under Section 106 of the Town and Country Planning Act 1990. Occasionally other legislation is used, for example Section 278 agreements may be appropriate where works are to be carried out to the highway and the applicant therefore needs to enter into an agreement solely with the Highway Authority to ensure its correct implementation.

An obligation can be entered into either through negotiation between the developer and the local planning authority (in which case it is a 'Planning Agreement') or by means of an offer of a specific undertaking from a developer (in which case it is a 'Unilateral Undertaking'). Either way, the planning obligation is a legally binding agreement to undertake works or to meet costs in connection with a development to enable the development to proceed.

Planning Agreements are most commonly required as there is often the need for a set of actions to be agreed by both parties eg the developer agrees to provide a set sum of money and the local planning authority agrees to spend it on the maintenance of play areas. The Council considers that it is normally preferable to use agreements rather than unilateral undertakings as:-

Owners can enjoy the benefits of obligations binding on the Council(s) (eg to spend money in particular ways, to repay money to the owner if not spent, etc)
The Local Planning authority can ensure that other parties (eg the County Council) perform their obligations

Are there alternatives to a legal agreement?

A planning obligation should only be used in compliance with the test set out in the introduction above and where it is clear that the matter cannot be dealt with through the use of a condition attach to the planning permission. In appropriate circumstances it is possible to use 'Grampian' conditions to ensure that an action takes place prior to the development commencing.

How are Planning Obligations Secured?

Planning obligations are secured by a formal deed whether in the form of a Unilateral Undertaking or Agreement. When this is by agreement, this will also be signed and sealed by the Borough Council (and the County Council, where appropriate eg where highway clauses and/or education clauses are involved).

The agreement will contain the planning obligations covering the things the landowner:-

Agrees to do
Agrees not to do

and the circumstances and timescales within which they things will occur. It will also contain a plan showing the land to which it relates.

How are Planning Obligations enforced?

Planning Obligations are enforceable by the Borough Council:-

In the Courts by application for an injunction or recovering contributions payable

By carrying out any operations required by the Planning Obligation and recovering the cost from the person(s) against whom the obligation is enforceable.

Land Charges

Planning Obligations are registered as local land charges and will be revealed in any search submitted on behalf of a potential purchaser where planning obligations have been complied with a note will be made on the Land Charges Register.

Can Planning Obligations be lifted?

A Planning Obligation may be modified or discharged:-

At any time by agreement with Borough Council or other signatories to the agreement as appropriate
On application to the Borough Council after five years or a later date specified in the obligation

Applications for modifying or lifting planning obligations, can be determined by the Borough Council in one of three ways:-

If the obligation no longer serves a useful purpose, it may be discharged
If it still serves a useful purpose, it shall continue in force
If it would still serve a useful purpose equally well subject to proposed modifications, it may continue in force so modified