Section 106 planning obligation
The purpose of this information is to help you understand what "Planning Obligations", "Section 106 Agreements" and "Unilateral Undertakings" are. It also explains 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 Eden Local Plan is the policy background to the Council seeking Obligations.
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 our Legal Services Section to the applicant/agent /solicitor seeking:
- an undertaking for payment of our 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, we prepare a draft agreement 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 UPO 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, we 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 Planning 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 us, 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, we have 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 document 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 us. 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). If you have any further queries about Planning, there is always a Duty Officer available between 10am and 1pm, Monday to Friday. If you wish to contact a specific officer, contact Development Management.