Section 106 agreements enable planning permission to be granted for developments which would otherwise not be accepted. By providing conditions to be met, they mitigate the impact of the development on the local community and infrastructure.
The agreement is by way of a deed between the land owner and the Local Authority which has to be signed and witnessed by both parties. The deed will identify what the developer is obliged to do in order to comply with the planning permission. Once the deed is executed, the section 106 agreement will be registered as a land charge.
A section 106 agreement usually provides for a monetary contribution to the Local Authority. The agreement could also provide for amenities such as playgrounds, public open spaces, roads, schools or affordable housing.
Failure to comply with a section 106 agreement can mean the Local Authority will enforce it, by way of an injunction, against the land owner and any subsequent land owner.
As a land owner entering into a section 106 agreement, they must provide title to the land to the Local Authority. After this, a draft section 106 agreement will be provided, it is important for planning consultants, clients and solicitors to be involved in reviewing the draft agreement. Once agreed, this will need to be signed and executed.
Where a land owner is dealing with a potential developer, they need to ensure that there is a mechanism to release them from their section 106 obligations and they should ensure that the liabilities under the section 106 agreement are not triggered until the development has commenced, when the land owner has sold the land.
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