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Time to Cut Ties? Rural Planning and Section 106 Agreements

Guy Wilson MRICS FAAV, associate and head of Wellington professional services, discusses Section 106 agreements and how changes in the National Planning Policy has made it possible to remove them.

Readers may be aware or have first-hand experience, of legal obligations i.e. Section 106 agreements, and their use in planning. But what exactly is a S.106 agreement? 

What is a Section 106 agreement?

A Section 106 agreement is a legally-binding agreement or obligation, enforced with the aim of mitigating otherwise unacceptable impacts of a development where use of a planning condition would be unsuitable. 

Facilitated, unsurprisingly, by Section 106 of the Town and Country Planning Act 1990, agreements can be entered into jointly by a person with an interest in the land and the Local Planning Authority (LPA); or via a unilateral undertaking entered into solely by the individual with an interest in the land.

These obligations run with the land, are legally binding and enforceable, and are most commonly encountered in the context of rural planning / agricultural planning, where an applicant has sought consent for an agricultural worker’s dwelling and where, prior to approval, the local planning authority have insisted that the applicant enter into a Section 106 agreement to tie the approved dwelling to the farm (and vice versa). 

However, by preventing division or separate occupation of the holding without recourse to the local planning authority, such agreements are burdensome, limit flexibility, reduce capital value and present practical difficulties when it comes to inheritance or secured lending; and it is for these reasons that their removal is particularly desirable.

How to Remove a Section 106 Agreement 

The good news? Following changes to the National Planning Policy, it is possible to discharge an obligation where one can demonstrate that a condition would have sufficed or where it no longer satisfies at least one of three key tests, i.e. it must be: 

a)    necessary to make the development acceptable in planning terms;
b)    directly related to the development; and
c)    fairly and reasonably related in scale and kind to the development.

This change has led to many LPA’s abandoning their use. However, this is not true for all, with some retaining their use and strongly resisting applications for removal. 

But even within these ‘trickier’ LPA’s, all is not lost and Stags are pleased to report that following robust representations within one such authority, they have successfully argued for the discharge of a section 106 agreement on the grounds of policy change; proving that, it is indeed possible. 

For advice on modifying or discharging planning obligations, or assistance with rural planning more generally, contact Stags Professional Services on 01392 439046 to be put in touch with your local professional.