In recent years conversations around new developments have increasingly focused on their impact on local communities. Section 106 agreements are a major way of ensuring that these projects actually improve the areas that they’re being built in.

Established by the Town and Country Planning Act 1990, these agreements require developers to help with local infrastructure when commencing new building projects, using their own funds to do things like updating roads, expanding schools, or enhancing public spaces in order to get permission to go ahead with their proposed building project.

In this blog post, we will explore Section 106 agreements, their purpose, how they are negotiated, and why they are important.

What Are Section 106 Agreements?

Section 106 agreements, often called S106 agreements, are legal arrangements that local authorities in the UK use to ensure that developers contribute to easing the effects of their new projects on the local community and infrastructure.

In simple terms, these agreements help make sure that communities gain benefits from large developments like new housing or commercial buildings, through things like contributions to local schools and healthcare facilities, the creation of public parks and recreational areas, improvements to roads and public transport infrastructure, and the provision of affordable housing options.

The Town and Country Planning Act 1990

The foundation for Section 106 agreements comes from the Town and Country Planning Act 1990. This law helps manage land use and development in England and Wales, allowing local councils to consider the wider effects of building projects.

Section 106 specifically provides a way for local councils to create planning obligations with developers. The law allows these obligations to be customised for each project and can involve provisions such as financial contributions to local services, commitments to provide affordable housing, or actions like building community facilities.

The Town and Country Planning Act 1990 makes these agreements enforceable as part of the planning permission process, meaning that a project cannot move forward without following the terms laid out in the Section 106 agreement. This allows new projects to fit well with existing communities in a responsible and sustainable way.

What Are Section 106 Agreements Used For?

Section 106 agreements are mainly used to reduce any negative effects a new development might have on the local community. For instance:

• Infrastructure: If a new development leads to more traffic in the area, a Section 106 agreement might require the developer to pay for improvements to local roads or help to improve public transport services.
• Education and Health: When a new housing project increases the demand for local services, developers may need to contribute to expanding schools and healthcare facilities.
• Environmental Enhancements: Developers might also be asked to provide or finance public parks, open spaces, or environmental projects to help maintain nature and community spaces.

Every agreement is tailored to fit the specific development to ensure that the contributions directly address the needs created or worsened by the new project.

Key Considerations

Negotiation Process

The negotiation of a Section 106 agreement is a collaborative process that includes the developer, local council planners, and sometimes other groups like community groups.

It usually begins early in the planning application process with initial evaluations of how the development will affect the area and discussions about what support might be needed. The local council will look at the developer's plans and may recommend changes or extra contributions. This can go on until an agreement is reached that works for all parties.

Enforcement

Once a Section 106 agreement is established, it's important for the local authority to monitor compliance and handle enforcement.

If a developer doesn't follow the terms, the local authority can take legal action to enforce the agreement. This could mean asking a court to make an order compelling the developer to do the previously agreed work or, in some cases, imposing fines.

The possibility of facing these actions usually encourages developers to stick to the agreement, as failing to do so can result in serious delays, extra costs, or legal problems.

Implications for Developers and Local Authorities

For developers, knowing how to handle Section 106 agreements properly is important for the success and reputation of their projects. While these agreements can increase project costs, they also present a chance to connect positively with the community and can improve the appeal of the development.

For local authorities, Section 106 agreements are a legally-backed way to make sure that developments benefit the community and don’t overwhelm local services and infrastructure. They also help address local needs and improve public resources through private development projects, saving on public spending.