The purpose of this information is to help you understand what "Planning Obligations", "Section 106 Agreements" and "Unilateral Undertakings" are. It also tries to explain what you need to do if you are asked to enter into one, as well as the process involved.
What is a planning obligation?
"Section 106 Agreements" and "Unilateral Undertakings" are types of Planning Obligation authorised by Section 106 of the Town and Country Planning Act 1990 (as amended by Planning and Compensation Act 1991 Section 12). A planning obligation is a legal agreement between the planning authority and the applicant/developer and any others that may have an interest in the land. An obligation either requires the developer to do something or restricts what can be done with land following the granting of planning permission.
Obligations are registered as Local Land Charges and are normally enforceable against the people entering into the obligation and any subsequent owner of the site
All planning obligations are legal instruments executed as deeds. Therefore, you may need to employ a planning agent and/or a solicitor to act on your behalf.
What can an obligation ask me to do?
If an obligation is required it can:
- restrict the development or use of land
- require specific operations or activities to be carried out in relation to the land
- require payment of a sum or sums of money
- require land to be used in a certain way
What is the policy background to the Council seeking an obligation?
The Adopted Core Strategy is the policy background to the Council seeking Obligations. Details can be obtained from the Council's website and the Council Offices.
Types of obligation
There are two types of obligations. These are a bilateral agreement known commonly as a "Section 106 Agreement", or a "unilateral undertaking". Both are entered into under section 106 of the Town and Country Planning Act.
Section 106 Agreement
A bilateral agreement (Section 106 Agreement) is an agreement between the applicant and the Council, and occasionally others. The need for this type of agreement normally comes to light either during the pre-application discussion process or after the application has been submitted. If the need for such an agreement is identified prior to the submission of the application applicants are advised to submit either a draft agreement or "heads of terms" with the application to speed up the decision-making process. If an agreement is required the applicant will be advised of the main requirements and reasons. When agreement in principle is reached, a letter will be sent by the Council's Legal Services Section to the Applicant / Agent / Solicitor seeking:
- an undertaking for payment of the Council's costs incurred in preparing the legal agreement
- evidence of ownership of the land (for registered land this is by way of Office Copy Entries obtainable from Land Registry, for unregistered land this is by way of an epitome of title)
A charge is made because the Council incurs additional costs and this charge reflects the level of work involved, including any aborted work. This charge is payable immediately prior to completion or upon notification that the agreement is not to be proceeded with. Once an appropriate undertaking is received, the Council prepares a draft agreements and this is sent to the Applicant / Agent / Solicitor for ratification and final endorsement. Planning Permission is issued on completion of the legal agreement.
Unilateral Planning Obligations
A Unilateral Planning Obligation (UPO) is an obligation offered by the applicant to the planning authority either in support of a planning application or a planning appeal. Since the adoption of the Housing Supplementary Planning Document in November 2010, a unilateral planning obligation is required to be submitted with any planning application for residential development where no affordable housing is to be provided, which is typically applications for 1 to 3 dwellings.
As of the 1 July 2013, the Council has introduced a new UPO submission procedure for applications where 1 to 3 housing units are being applied for. A UPO is not required to be submitted upon application submission given entries to this document will not be known at that time. Instead, upon valid receipt of a new application for 1 to 3 housing units, the department shall write to you to confirm validation and give instructions as to the following to be included in the UPO;
- Application number
- Final accepted description
- Final confirmed site address
- Submission date
There shall then be a period of 14 days in which to submit a fully completed and signed UPO to the Council with two colour copies (3 in total all in hard copy). The UPO must be appropriately fastened and in the correct order. The site plans must be signed by an interested party anywhere on the plan. The appropriate attestation clause must also be used. Also, within this 14 day period, a Land Registry title document (carried out post submission date)showing ownership of the land shall be submitted.
In order to assist applicants and agents, the Council has prepared specimen examples/proformas as per the below documents.
Template 1 - 3% Commuted Sum for Affordable Housing, 3 units or less - 1 owner AND a mortgagee
Template 2 - 3% Commuted Sum for Affordable Housing, 3 units or less - plural owners AND a mortgagee
Template 3 - 3% Commuted Sum for Affordable Housing, 3 units or less - one owner AND NO mortgagee
Template 4 - 3% Commuted Sum for Affordable Housing, 3 units or less - plural owners AND NO mortgagee
It is important to make known, that failure to submit a considered lawful valid UPO and requested Land Registry title documents within the 14 day time period will result in this being considered a reason for refusal of the application. Opportunity will not be given to amend or vary a submitted UPO that is confirmed unacceptable by the Council. Should you be in doubt, please seek legal assistance.
Further information and guidance can be found in the guidance note, Planning Obligations - What You Need to Provide (PDF: 161Kb/ 4 pages).
For further information
- Contact: Development Management
- Duty Officer: 01768 817817
Monday to Friday 10am to 1pm
- Address: Planning Services, Department of Communities, Eden District Council, Mansion House, Penrith, Cumbria, CA11 7YG
- Email: firstname.lastname@example.org
- Telephone: see contact Development Management
- Fax: 01768 890732