Section 106 Agreement

 

A Section 106 Agreement is a legal obligation attached to land, entered into under section 106 of the Town and Country Planning Act 1990. It is the mechanism a council uses to secure something a planning condition cannot deliver – affordable housing, a financial contribution towards a school, the long-term management of open space. It is one of the main mechanisms behind what is often called planning gain. You will also hear it called a planning obligation, a section 106, or simply an S106.

The single most important thing to understand about a Section 106 Agreement is that it binds the land, not the person who signed it. Buy a site with a section 106 on it and you buy the obligation with it. It is a local land charge, so it will show up on searches, and it does not fall away when the original developer sells up and walks off.

Government is now consulting on standard Section 106 agreement templates for medium housing sites, covering schemes of 10 to 49 homes on sites up to 2.5 hectares.

 

 

What a Section 106 Agreement can require

 

Section 106(1) is narrower than most people assume. An obligation can do only four things:

• 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 a specified way
• require a sum or sums to be paid to the authority, on specified dates or periodically

Everything a council asks for has to fit inside one of those four. In practice the obligations you meet most often are affordable housing, education contributions, highways works, public open space and its future maintenance, and – increasingly – biodiversity. An obligation can be unconditional or conditional, and can bite indefinitely or for a fixed period.

The agreement must be executed as a deed, and it has to state on its face that it is a planning obligation under section 106, identify the land, identify who is entering into it and what their interest is, and name the authority who can enforce it.

Section 106(1) refers to any person interested in the land, not simply to an agreement between a council and a developer. You can give an obligation on your own, without the council signing – that is a unilateral undertaking, and it is the usual route when you are at appeal and the council is not at the table.

 

The three tests every obligation must pass

 

Under regulation 122 of the Community Infrastructure Levy Regulations 2010, an obligation may only be a reason for granting planning permission if it is:

• necessary to make the development acceptable in planning terms
• directly related to the development
• fairly and reasonably related in scale and kind to the development

These are statutory tests, not policy aspirations. If an obligation fails them, it is unlawful for the council to take it into account when granting permission. Since 2019 there is no longer any restriction on pooling contributions from multiple developments towards one piece of infrastructure, but every individual obligation still has to pass all three tests on its own merits.

Councils may also charge a monitoring fee, provided the sum fairly and reasonably relates in scale and kind to the development and does not exceed what the authority estimates it will cost to monitor the obligations over their lifetime.

If the obligation includes affordable housing and the site contains a qualifying vacant building, check Vacant Building Credit before agreeing the contribution. VBC can reduce the affordable housing requirement, but it does not remove unrelated Section 106 obligations.

Affordable housing delivery is changing too. The new £39bn Affordable Housing Programme encourages councils to become more active builders and purchasers, which could matter where a developer is struggling to find a registered-provider buyer for Section 106 affordable homes.

 

When must a Section 106 Agreement be published?

 

A proposed Section 106 Agreement is not something that can simply be negotiated behind closed doors and uploaded after planning permission has been issued. Article 40 of the Development Management Procedure (England) Order 2015 requires the planning register for an undetermined application to include a copy of any planning obligation or section 278 agreement proposed or entered into in connection with that application.

The Court of Appeal made the purpose of that requirement clear in R (Greenfields (IOW) Limited) v Isle of Wight Council [2025] EWCA Civ 488. Publication is not merely an administrative tidy-up after the event. The register allows people to inspect the obligation and, where appropriate, make representations before the application is finally disposed of.

That became decisive in R (Chidswell Action Group) v Kirklees Council [2025] EWHC 2256 (Admin). Kirklees had published heads of terms, but the draft Section 106 itself was not placed on the register before permission was granted. The High Court held that the heads of terms were not a substitute for the proposed obligation and quashed the permission.

This does not mean that every solicitor amendment or tracked-change working copy necessarily has to become a separate register entry. The statutory question is whether the register contains the planning obligation that is proposed to be entered into, in time for the public to see what is actually being secured before the decision is made. Our guide to the planning register explains the wider publication duties.

 

Section 106 and CIL are not the same thing

 

A section 106 is site-specific mitigation and is negotiable. The Community Infrastructure Levy is a formulaic charge set by a charging schedule and is not. Where a council has a CIL charging schedule, both can apply to the same development. What you cannot be made to do is pay twice for the same thing: an obligation that duplicates what CIL already funds will struggle on the regulation 122 tests.

 

Biodiversity net gain runs through Section 106

 

Since mandatory biodiversity net gain came in, section 106 has become a standard vehicle for securing significant on-site and off-site habitat commitments. Under paragraph 9 of Schedule 7A to the Town and Country Planning Act 1990, a significant on-site habitat enhancement must be maintained for at least thirty years, secured by a planning condition, a section 106 agreement, or a conservation covenant.

There is a related trap. Since February 2024 a council may not discharge or modify an obligation under section 106A if doing so would prevent the biodiversity gain objective being met, or create a significant risk of it not being met.

 

Changing or getting out of a Section 106 Agreement

 

There are two routes, and people conflate them constantly.

By agreement, at any time. Under section 106A(1)(a) the council and the person bound can agree to modify or discharge the obligation by deed. There is no statutory waiting period for a voluntary agreement.

By formal application. If the council will not agree, section 106A allows a person against whom the obligation is enforceable to apply to have it modified or discharged once the relevant statutory period has expired. The timing depends on the age of the obligation:

• obligations entered into on or before 6th April 2010: Government guidance confirms that an application can be made at any time
• obligations entered into after 6th April 2010: an application can normally be made after five years beginning with the date the obligation was entered into

The council must then decide whether the obligation should continue without modification, be discharged because it no longer serves a useful purpose, or be modified because it would serve that useful purpose equally well in the form proposed.

For post-6th April 2010 agreements, the five-year wait remains important: a section 106 signed last year cannot be forced open through the formal route, however unviable the scheme has become, unless the council agrees to change it voluntarily. Older pre-2010 obligations are different. If you are dealing with a long-standing restriction, our guide to modifying or discharging an old Section 106 agreement explains the useful-purpose test, evidence and appeal route in more detail.

Section 84 of the Law of Property Act 1925 – the familiar route for restrictive covenants – expressly does not apply to a planning obligation.

 

The affordable housing viability route no longer exists

 

Between April 2013 and April 2016 there was a special procedure, under sections 106BA to 106BC, allowing a developer to apply to modify or discharge an affordable housing obligation purely on viability grounds. Those sections ceased to operate at the end of 30th April 2016 and have not been replaced.

If an obligation is making a scheme unviable and the council will not renegotiate, the ordinary section 106A and section 106B routes remain the relevant statutory mechanisms where their requirements are met. For a formal application, remember the different timing rule for pre- and post-6th April 2010 obligations.

 

Appealing a refusal to modify or discharge

 

If the council refuses a section 106A application, or fails to determine it in time, you can appeal under section 106B. The normal deadline is six months from the date of the decision notice – or, on a non-determination appeal, from expiry of the prescribed determination period. The Secretary of State has power to allow a longer period.

This is not the same as appealing a refusal of planning permission. If the underlying application has been refused, see our guide to planning appeals.

 

What a Section 106 Agreement costs

 

There is no planning application fee simply for entering into a section 106 – it is a deed, not an application. The real costs are the obligations themselves, professional fees, the authority’s legal costs where charged and any lawful monitoring fee.

An application to modify or discharge under section 106A is separate from the ordinary planning application fee regime; councils may have local administrative or legal charges, so check the authority’s current schedule.

 

Should you sign it?

 

You often have less choice than you would like – without the agreement, there may be no permission. But that is not the same as signing whatever is put in front of you.

The negotiating position is regulation 122, not goodwill. Ask the council to justify each obligation against the statutory tests and to explain how any financial contribution has been calculated and what it will fund.

Remember that the obligation runs with the land. If you are buying land or a house on an estate, read the section 106 before you commit. Obligations about occupancy, affordable housing tenure or long-term habitat management do not disappear because the original developer has gone.

If a planning obligation is not kept, see our guide to a section 106 breach.

S106 relevant legislation

 

• Section 106, Town and Country Planning Act 1990 – planning obligations
• Section 106A – modification and discharge
• Section 106B – appeals
• Regulation 122, Community Infrastructure Levy Regulations 2010 – the three tests
• Town and Country Planning (Modification and Discharge of Planning Obligations) Regulations 1992
• Planning Inspectorate: planning obligations good practice advice

Developer contributions & planning agreements

 

Section 106 Agreement Page Updated: 2nd September 2026