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Planning Obligations & Development Agreements

Bringing a site to the market, to the point of a planning permission being capable of implementation is not just about getting the planning permission, or of resolving a s106 planning obligation. Sometimes there are other kinds of agreement which are necessary. 

Planning Obligations: s106 Planning Act: 

Commonly known as ‘s106’ agreements or undertakings. These documents are in effect covenants to the council that something will be done, or not done, or that a payment will be made. They are used when the issue cannot simply be resolved by a planning condition. But, essentially, under CIL Regulation 122 (which applies whether or not an area has a CIL schedule in place) a Council has to be able to say that without the s106, permission could not be granted (ie that it is necessary), and that it is directly related to the development, and fairly and reasonable related in scale and kind to the development. As a result care needs to be taken to ensure that the Council is not demanding too much from an owner by way of planning ‘gain’.

Typically an obligation might cover:

  • Affordable housing; education
  • Off site highway improvements
  • Travel plans
  • Open space arrangements and so forth

However the categories of demand that might be appropriate is not fixed.

It is very important to ensure that an obligation does not offend the CIL Regulation 123: this limits the number of obligations a Council can accept in relation to infrastructure provisions. It will apply differently depending on whether a charging schedule has been introduced.

The obligation has to be given by all those who have a legal interest in the land; this will include people with a charge over the land. 

We regularly negotiate the provisions of s106 documents with authorities up and down the Country, and find that great care is needed to understand what elements are negotiable and whether the demands should be accepted. 

Highways: s38 and s278 Highways Act

These agreements are either for the purpose of ensuring that a new road is properly built and is then adopted by a Council (s38); or that alterations to an existing road are carried out to a Council specification (since otherwise no change to a highway is permissible) (s278). The agreement will ensure that the road is designed constructed inspected and maintained until the works are formally adopted or accepted. But it will also govern the potential for defaults in the construction and any bond or indemnity, and care will be needed as to these and as to who is to bear potential Land Compensation Act 1961 claims by third parties. 

Gas, Electricity, Water Supply, Drainage

Each kind of service media has its own statutory provision, and for some there is a requisition process which may be run in parallel with a landowner arrangement. It is particularly important to think about these at an early stage in any development, because service media will often have off-site implications, leading to the potential for unexpected ransom arguments by third parties.

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