Section 106 Agreements
To experienced property developers, the phrase ‘Section 106’ will often induce palpitations, profuse sweating or, at the least, foul language. Developers often face the headache of paying huge sums of money to local authorities or face refusal of planning permission.
Local Planning Authorities have the power under the Town and Country Planning Act 1990 to refuse planning permission unless the developer signs a ‘Section 106 Agreement’, a deed placing onerous obligations on the developer. These obligations are increasingly in the form of ‘affordable housing contributions’ which the developer must pay to the Authority, and which can amount to six-figure sums.
For larger developments, The Community Infrastructure Levy (CIL) can also be of concern. The CIL is intended to provide funding for regional infrastructure projects, at the expense of property developers. Introduced by the Planning Act 2008, and initially scheduled to be abolished by the government in 2010, the CIL has instead been reinforced and extended by the Localism Act 2011, by giving regional council and local neighbourhood groups the power to have a say on how the money should be spent.
For the unprepared developer, these issues can not only be very costly, but can also add huge delays to a development. Negotiations with the council can be difficult and lengthy. The Commercial Property team at Abacus has experience in negotiating and overturning these type of agreements, saving the developer huge sums of money.
If you have been asked to sign a Section 106 agreement or to pay under a Community Infrastructure Levy, or you are simply considering property development, get advice from our Commercial Property team on 0161 833 0044 or email firstname.lastname@example.org. In the meantime, please read our blog post on the subject.