Section 106 agreements play an important role in the planning system and can have a significant impact on development projects and residential properties.

For developers, Section 106 agreements are often required as part of the planning permission process and can include obligations relating to infrastructure contributions, affordable housing and transport improvements.

For homeowners and property buyers, Section 106 agreements may impose restrictions or obligations affecting how a property can be used or developed.

Understanding these agreements is essential to avoid unexpected costs, delays or legal complications.

This guide explains how Section 106 agreements work, the types of obligations they commonly include and what developers and homeowners should consider before entering into or purchasing property affected by a Section 106 agreement.

What Is a Section 106 Agreement?

A Section 106 agreement is a legally binding agreement made between a developer and a local planning authority under Section 106 of the Town and Country Planning Act 1990.

These agreements are used to ensure that development contributes to infrastructure and services needed to support it.

Planning obligations are commonly used where development places additional pressure on local infrastructure such as:

• roads and transport networks
• schools and education facilities
• public open space
• community facilities
• affordable housing provision

Once signed, Section 106 obligations attach to the land, meaning they continue to apply even if the property or development site changes ownership.

Section 106 Agreements and Development Viability

Planning obligations can have a substantial impact on the financial viability of development projects.

Factors developers need to consider include:

• the cost of infrastructure contributions
• affordable housing requirements
• timing of financial payments
• phasing of development obligations

If obligations are too onerous, they can make a development scheme financially unviable.

In some cases, developers may be able to negotiate changes to planning obligations or demonstrate through a viability assessment that certain requirements should be reduced.

Early legal advice can help ensure planning obligations are structured appropriately and aligned with the commercial objectives of the development.

Section 106 Agreements for Homeowners

While Section 106 agreements are usually associated with new developments, they can also affect individual residential properties.

In some cases, properties may be subject to planning obligations linked to historic planning permissions.

These obligations might include:

• restrictions on how a property can be occupied
• limitations on future development or extensions
• financial contributions linked to planning permissions
• requirements to maintain certain facilities

For homeowners, understanding whether a property is subject to a Section 106 agreement is important when buying or selling property.

These obligations are normally identified during the conveyancing process, but further legal advice may be required to understand the implications.

Can Section 106 Agreements Be Changed?

In some circumstances it may be possible to modify or discharge a Section 106 agreement.

This may occur where:

• the original obligations are no longer necessary
• planning policy has changed
• development viability has changed
• the agreement is preventing reasonable use of the land

Applications to modify or discharge planning obligations can be complex and typically require negotiation with the local planning authority.

Professional legal advice can help assess whether such changes are possible and guide the process.

Key Risks Developers and Homeowners Should Consider

Section 106 agreements are often complex legal documents that can create long-term obligations.

Some key issues to consider include:

Long-Term Land Obligations

Because obligations attach to the land, they can affect future owners and future development phases.

Development Delays

Planning permission may not be issued until the Section 106 agreement is finalised, which can delay development projects.

Financial Contributions

Infrastructure contributions can significantly increase development costs.

Property Restrictions

For homeowners, planning obligations may restrict how a property can be used or developed.

Understanding these risks early can help avoid complications later.

When Should Legal Advice Be Taken?

Legal advice may be helpful in a number of situations, including:

• negotiating Section 106 agreements during planning applications
• reviewing planning obligations attached to development land
• purchasing property affected by a planning agreement
• considering modifications to existing planning obligations

Specialist advice can help clarify the legal implications of these agreements and ensure obligations are properly understood.

How Wollens Can Help

The Planning & Highways team at Wollens advises developers, landowners and homeowners across Devon and the South West on all aspects of planning law.

Our team provides practical advice on:

• negotiating Section 106 agreements
• reviewing planning obligations affecting development land
• advising homeowners on Section 106 restrictions
• modifying or discharging planning agreements

We work closely with developers, planning consultants and property owners to ensure planning obligations are clearly understood and appropriately managed.

Speak to a Section 106 Agreements Specialist

If you are dealing with a Section 106 agreement or planning obligations affecting land or property, our specialist planning solicitors can help.

You can also complete an online enquiry form. One of the Wollens team will contact you as soon as they are available.