1. Section 106 Obligations – when are they caught?
Robert Palmer
Barrister

2. Anatomy of a section 106 planning obligation
Agreement or unilateral undertaking
Entered into by deed
Enforceable by injunction
Against the person entering into the obligation or anyone deriving title
Local land charge
May be conditional or unconditional
May be indefinite or limited in duration

3. Anatomy of a section 106 planning obligation
The obligation may:
restrict the development or use of land in any specified way;
require specified operations or activities to be carried out in, on, under or over the land;
require the land to be used in a specified way; or
require a sum or sums to be paid to the authority.

4. Section 106 and the planning balance
Section 38(6) Planning and Compulsory Purchase Act 2004
Role of section 106 obligation as a material consideration in the planning balance
Can be used to make development accord with development plan
Can be used to outweigh conflict with the development plan

5. Section 106 and the planning balance
Law v policy
Tesco Stores - materiality
ODPM Circular 05/2005: must be
Relevant to planning;
Necessary to make the proposed development acceptable in planning terms;
Directly related to the proposed development;
Fairly and reasonably related in scale and kind to the proposed development; and
Reasonable in all other respects.
Designed to ensure planning permission not “for sale”

6. A public works contract?
Capable of amounting to a contract concluded in writing?
Capable of being for a work corresponding to the requirements specified by the contracting authority?
For pecuniary interest?

7. Nature of obligations in a section 106 agreement
Wide range of types of obligation in a section 106 agreement
Quality control
Affordable housing
Integral parts of a development scheme
Extent of specification
Contrast development brief/planning policy
Flensburg “urban development needs”?

8. A contract for pecuniary interest/consideration?
Taken in isolation, may not be:
gratuitous benefit
not normally amount to a pecuniary advantage conferred by the authority
exercise of [permissive] public law function
The contrary view: parallel with La Scala
Contrast:
waiver of a charge for provision of building
grant of planning permission for the benefit accruing to the authority through a s.106
Is planning authority trading down or up? Provision of economic gain for developer?

9. A contract for pecuniary interest/consideration?
But over-recovery by planning authority – has authority procured the additional element? Where is line drawn?
More complex scenarios: development agreements
One mechanism for delivering part of a wider set of arrangements falling within procurement regime
No artificial separation of individual components

10. A safe haven Financial contributions
Compare also section 278 agreements

11. For more information rpalmer@monckton.com www.monckton.com
Thank You
For more information