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Negotiation of Section 106 Agreements

Planning Agreements

S106 and other similar development agreements have become a feature in most planning permissions granted over the past 20 years. A S106 Agreement is an agreement between the local planning authority and the applicant/landowner whereby various planning obligations are imposed as a grant of planning permission. Such obligations typically relate to matters such as:

  • Affordable housing requirements
  • Requirement for contributions to education and schooling costs
  • Provision of public open space and play equipment
  • Contributions to local transport plans
  • Provision of public buildings (e.g. new library), public art etc

Community Infrastructure Levy

Many local authorities are now introducing the Community Infrastructure Levy (CIL) which is a payment made on a price per dwelling basis to be paid by developers. The CIL will cover some of the payments which may previously have been embodied in a Section 106 Agreement. The amount payable under the Community Infrastructure Levy will vary according to the size of the dwelling concerned. Local authorities set their own level of CIL, so the price payable for a particular house type in one district will differ to that payable in a different local authority area. Affordable housing obligations will still apply alongside the Community Infrastructure Levy.

Negotiation of Contributions

The contribution demands from the local authority can be considerable. Furthermore the policies and guidance on which a Council may rely when requesting items under a S106 Agreement are complex and expert advice should always be sought so as to minimise the impact. Failure to do this can have a significant affect on the land value.

For more information, please contact Martin Page on 01480 213811 or email Martin at martin.page@brown-co.com.

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Royal Institution of Chartered Surveyors

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