Varying a section 106 agreement

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Section 106 of the Town & Country Planning Act 1990 (the 1990 Act) provides that a local planning authority may enter into an agreement with any person interested in land in their area for the purpose of restricting or regulating its development or use.  A section 106 agreement is a contract of obligations entered into between a developer, landowner and a local planning authority.

Section 106 agreements are usually completed following a resolution to grant planning permission by a local planning authority to mitigate impact of new development and contain provisions securing onsite and off-site infrastructure, financial contributions and other mitigation measures.

The Government’s Coronavirus (COVID-19): Community Infrastructure Levy guidance, published on 13 May 2020, included the following passage on S106 agreement:

There are greater flexibilities within section 106 planning obligations than CIL.  Where the delivery of a planning obligation, such as a financial contribution, is triggered during this period, local authorities are encouraged to consider whether it would be appropriate to allow the developer to defer delivery”.

The guidance goes on to highlight that “deferral periods could be time-limited or linked to the government’s wider legislative approach and the lifting of CIL easements …although in this case we would encourage the use of a back-stop date”. The government is encouraging local planning authorities to take “a pragmatic and proportionate approach to the enforcement of section 106 planning obligations during this period” in order to help remove barriers for developers and minimise the stalling of sites.

When seeking to make a variation of an s106 agreement, you should first consider how long it has been in place. If the s106 agreement was entered is less than five years ago, an agreement between the parties must be sought. If more than five years has passed, an application can be made to the local planning authority.

How to vary an s106 agreement

  1. By Agreement

Section 106A (11) of the 1990 Act states that a planning obligation can be modified or discharged by agreement (at any time) between the appropriate authority and the person or persons against whom it is enforceable. The appropriate authority is Mayor of London (where the planning obligation is enforceable by him), Secretary of State (where it relates to a development consent obligation) and local planning authority (in all other cases).

An agreement to modify or discharge a planning obligation can be made at any time (and can only be entered into by Deed, by virtue of section 106A (2)). Therefore, a s106 agreement can be renegotiated and varied at any time between the parties.

2. By Application

Sections 106A and 106B of the 1990 Act provides a procedure that can be used to modify or discharge planning obligations entered into after 25 October 1991 without the agreement of the local planning authority.

An application for modification or discharge of s106 agreement can be made to the local planning authority after the expiry of the ‘relevant period’, and the “relevant period” is defined as five years since the beginning with the date that the s106 agreement is entered.

Whilst the application process is for s106 agreements that have been established for at least five years, it avoids the requirement for all parties to the agreement to sign a deed of variation. This may be a problem even where the developer and the local planning authority may agree the terms of a variation. Section 106A (5) specifically provides that an application under s106A (3) for the modification of a s106 agreement may not specify a modification imposing an obligation on any other person against whom the s106 agreement is enforceable.

The potential disadvantage of the application process is that there won’t be any opportunity to place additional burdens on another party. An example would be where an original covenanter has subsequently disposed of part of its land to a third party and seeks to release its remaining land from the obligations, placing the entire onus of the planning obligation on the land disposed of.

The procedure for making the application is set out in the Town and Country Planning (Modification and Discharge of Planning Obligations) Regulations 1992. The regulations make provisions for:

  • the form and content of modification or discharge applications,
  • the publication of notice of the application,
  • the procedures for considering any representations made about the application,
  • the notice to be given to the applicant of the determination made.

The local planning authority must determine the application within eight weeks of receipt of the application, unless an extended period is agreed. The local planning authority can determine an application for modification by refusing it, discharging it if it no longer serves useful purpose, or modifying it if the obligation would serve an equally useful purpose with the modifications sought (S106A (6)).

If you would like advice or assistance on how you can vary or discharge a section 106 agreement, then please contact us and we would be happy to assist you.