Section 106 Planning Obligations

Introduction

Under the Town and Planning Act 1990, Planning Obligations may be sought when planning conditions are inappropriate to ensure and enhance the quality of development and to enable proposals that might otherwise have been refused to go ahead in a sustainable manner. They should also meet the following tests:

  • Necessary to make the proposal acceptable in planning terms
  • Relevant to Planning
  • Directly related to the proposed development
  • Fairly and reasonably related in scale and kind to the proposed development
  • Reasonable in all other respects (Circular 5/05)

What are Planning Obligations?

Planning Obligations are obligations relating to land which bind the land and whoever owns it into a legal obligation. They are made by deed under Section 106 of the Town and Country Planning Act 1990 and may:

  • Restrict the development or use of the land in a specified way
  • Require specified operations or activities to be carried out on the land
  • Require the land to be used in any specified way
  • Require a sum or sums to be paid to the authority on a specified date or dates or periodically

They provide a means of ensuring that developers contribute towards the infrastructure and services that the London Borough of Richmond upon Thames believe necessary to facilitate proposed developments.

Contributions may be either in cash or kind. Planning Obligations are also used to deliver the following, for example:

  • Affordable housing
  • Provide school places for new developments
  • Provide health facilities
  • Make the borough safer
  • Requiring infrastructure (roads, drains) to be provided
  • Requiring land to be dedicated and equipped as open space or playgrounds
  • Requiring sums to be paid for the provision of offsite infrastructure or the long term maintenance of open space.
  • Providing car clubs
  • Removing the right to obtain parking permits

Community Infrastructure Levy

The Community Infrastructure Levy, once adopted, will replace existing Section 106 contributions that developments currently make towards infrastructure provision. The evidence base and CIL are currently under preparation.

The Strategy

The Planning Obligations Strategy(pdf, 424KB) has been prepared to outline and clarify the London Borough of Richmond upon Thames’ current approach, policies and procedures in respect of planning obligations. Since the adoption of this document in 2005 there have been 2 significant changes. In January 2007 the education chapter was revised and in May 2009 the Strategy was amended to reduce planning contributions paid by developers on 100% affordable housing schemes. A Summary of these changes can be read at Summary of changes to the Planning Obligations Strategy(pdf, 26KB).

Links to the Cabinet Member Decision Sheet(pdf, 56KB) and the Main Report(pdf, 107KB) with regard to the education contributions and the Cabinet Member report containing the amendments with regard to reduced planning contributions for 100% affordable housing schemes.

Paragraph 24 (formerly 29, 30 and 32) states that the annual pupil take up factors for the Council's education areas will be made available annually. The figures are derived from October 2010 School Census data matched with the corresponding ONS population estimates for the school age population.

These are now:

  • 77% take up rate for primary schools in the North of the Borough
  • 62% for primary schools in the South of the Borough
  • 43% for secondary schools in the Borough

The strategy allows for the education formula to be updated annually with the most recent construction costs. The most up to date figures need to be put into the the document. An update may change the outcome of the planning contributions that will be expected by the Council, it is the developers responsibility to make sure they use the most up to date figure in their calculation.

The current cost multiplier figures from Teachernet (School design guidance: Cost issues) are 2008/09 figures. These are the latest that have been published and are based on projected pricing levels at Q4 2008. For Richmond Borough the figures are

  • £12,257 for primary education and
  • £18,469 for secondary education

Each of these is subject to a location multiplier of 1.12 to reflect the costs of building in Richmond. (This information was up to date December 2010.)

Obligations are taken forward through Section 106 agreements, which are typically agreements negotiated between local authorities and developers in the context of granting planning consent. They provide a means to ensure that a proposed development contributes to the creation of sustainable communities.

Is my application liable for planning contributions?

Planning contributions are sought when there is an increase of housing units on a site which put an additional burden on existing borough facilities. As a starting point contributions are sought at the following trigger points:

  • Education net 3 units
  • Transport net 5 units
  • Health net 5 units
  • Public realm net 5 units
  • 100% affordable housing will be sought on employment sites where it has been agreed that a change of use is accepted (policy EMP4 )
  • Maximise affordable housing will be sought on employment sites

The planning obligation strategy is the starting point for negotiations. Development that is assessed to have an impact, will be required to mitigate the impact of that development to make the application acceptable.

In areas where car parking is controlled and there is no capacity for additional on street parking then a Section 106 agreement maybe used to prevent occupiers of the new units from being eligible for parking permits.

All planning applications will be looked at on their own merits and where specific issues need to be overcome, the development control case officer will enter into negotiations with the developer. For example CCTV, preservation of wildlife habits etc.

How to calculate planning contributions

In assisting the application process, LBRUT have set up a calculator (MS Excel, 94KB), which can be used to input the relevant information of a proposal and establish what the likely contributions will be. The calculator takes into account all the amendments that have been made to the strategy. You will need to input data including the Public Transport Accessibility Level rating (PTAL) and whether the site is in a Public Open Space (POS) deficiency area. See above regarding the Education cost multiplier.

Who may enter into a Planning Obligation?

Planning Obligations are legally enforceable against the owner(s) (including their successors in title) of the land to which they relate. This means that generally only owners can enter into obligations even if a prospective purchaser/developer of the land has applied for the planning permission (although it is possible for prospective purchasers to be party to the obligations where they have exchanged contracts to purchase).

Because planning obligations run with the land, all owners, lessees and mortgagees must be signatories. Planning obligations can have significant effects on the use and therefore the value of land. Before anyone enters into a planning obligation we strongly advise that they take independent legal advice or contact our planning team for pre-application advice.

How are Planning Obligations secured?

Planning obligations are secured by a formal deed whether in the form of a Unilateral Undertaking signed by the developer setting out its obligations or by Agreement  through a Section 106 legal agreement prepared by the Council. The Council would wish to encourage developers to submit a Unilateral Undertaking Agreement with their planning application as part of the planning process.

When it is by Agreement, it will also be signed and sealed by the London Borough of Richmond upon Thames. It will contain covenants (the planning obligations) covering the things the landowner:

  • Agrees to do
  • Agrees not to do

And the circumstances and timescales within which these things will occur.

How are Planning Obligations enforced?

Planning Obligations are enforceable by London Borough of Richmond upon Thames:

  • In the courts by application for an injunction or recovering contributions payable
  • By carrying out any operations required by the Planning Obligation and recovering the cost from the person(s) against whom the obligation is enforceable.

Land Charges

Planning Obligations are registered as local land charges and will be revealed in any search submitted on behalf of a potential purchaser unless the planning obligations have been discharged in which case the land charge entry may be removed from the Land Charges Register.

Can Planning Obligations be lifted?

A Planning Obligation may be modified or removed:

  • At any time by agreement with London Borough of Richmond upon Thames

Applications for modifying or lifting planning obligations can be determined by London Borough of Richmond upon Thames at any time by agreement with London Borough of Richmond upon Thames by application to the Head of Development Control.