Section 106 obligations in the Scarborough area

Planning legislation indicates that a planning obligation is only appropriate where it is:

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

National planning policy guidance indicates that a planning obligation shall in most cases only be sought from developments of 10 or more units or where they have a gross floor space of more than 1,000 sqm. In cases where there is a known requirement for planning obligations, a draft Section 106 agreement or obligation shall be provided when the application is submitted. If the application is not accompanied by such a document or an adequate explanation of why it has not been provided, then the application will not normally be validated.

Furthermore, it is expected that the final draft of the agreement/obligation will be completed or ready for signature at the time that a resolution to grant planning permission is made by our planning and development committee or planning services manager. Planning permission will not be issued until the Section 106 agreement/undertaking has been completed to our satisfaction.

In many cases either can be used although a unilateral undertaking will often be the more straightforward. The initial drafting of a unilateral undertaking can be carried out by the landowner/developer's solicitor. This can help to reduce delay since it is less reliant on the input of our officers or other statutory bodies. The Planning Inspectorate also requires the use of unilateral undertakings where a planning application is subject to an appeal following the refusal of planning permission. However, there are circumstances when a Section 106 agreement is more appropriate, for example where parties other than the applicant, are bound by obligations. If in doubt, please liaise with us.

It is not possible to produce a definitive list covering all planning applications. However, there are certain types of infrastructure provision (or a financial contribution in its place) that are regularly required. Reference should also be made to relevant Supplementary Planning Documents (SPDs), which are adopted council policy, including formulae used to calculate commuted sums. These include thresholds, indicating the minimum size of development above which planning obligations will be normally necessary. In summary, taking account of both the SPDs and government guidance, the minimum thresholds are as follows:

• affordable housing - 11+ new dwellings.
• green space, play, and sports facilities - 11+ dwellings and for certain types of communal residential accommodation where the floorspace exceeds 1,000 sqm (also dependent on an assessment of local need).
• education facilities - 25+ dwellings, or 15+ dwellings in rural parts of the borough, (also dependent on an assessment of local need).
• transport - there is no SPD or any set threshold, so improvements to facilities or financial contributions will be sought depending on specific circumstances, but are normally only likely to be required on larger-scale developments

For more detailed guidance, including whether infrastructure shall be provided on-site or off-site with a financial contribution, reference should be made to the relevant SPD. Before a planning application is submitted, it is also recommended that it is discussed with planning officers and possibly the relevant statutory provider of the infrastructure who would benefit. These discussions can be used to agree informally on the planning obligations which may be applicable in each case, as well as the amount payable for any commuted sums. It should be noted that we normally charge for pre-application planning advice. 

If the applicant is seeking to establish that the Section 106 costs would render the development unviable, then this would have to be substantiated by submitting a viability assessment with the planning application.

Proof of ownership should be submitted with the draft unilateral undertaking/section 106 agreement. This should be by way of up to date official copies of the register and title plan from the HM Land Registry for registered land or an epitome of title (copies of the title deeds) for unregistered land.

Four templates (A-D) have been prepared with the aim of reducing associated costs and delays. Gaps in the text will need to be completed, while text in italics should be amended, where appropriate.

 A Section 106 Unilateral undertaking relating to off-site affordable housing contribution only (pdf / 200 KB)

 B Section 106 Unilateral undertaking relating to off-site affordable housing and open space/play/sports facilities contributions only (pdf / 205 KB)

 C Section 106 Unilateral undertaking with all relevant standard planning obligations (pdf / 207 KB)

 D Section 106 agreement with all standard planning obligations (pdf / 343 KB)

Template D, or possibly C, would be appropriate for most applications, providing a comprehensive document covering all standard text. Text may then be added, amended, or deleted as appropriate. It is unlikely that an agreement/undertaking would correspond precisely to either of these templates. They are therefore colour-coded to identify those parts of the text which should be retained, amended, or deleted as follows:

• black non-italic - retain text
• black italic - delete or amend as appropriate (seek guidance if in doubt)
• purple - retain where financial contribution towards off-site affordable housing is required
• blue - retain where affordable housing is provided on site
• dark green - retain where financial contribution towards off-site open space/play/sports facilities is required
• bright green - retain where obligations relating to on-site open space/play/sports facilities are required
• pink - retain where financial contribution towards education is required
• brown - retain where financial contribution towards transport infrastructure is required

One scenario which is not necessarily fully addressed by the template is the case of outline planning applications, where the number of dwellings, the floor area, or the number of bedrooms has not yet been established, so it may not be possible to calculate a precise financial contribution. In such circumstances, we would normally be able to provide an alternative form of words to cover such a situation.

The preparation and monitoring of Section 106 planning obligations is a time-consuming and complex process, taking up a significant amount of officer time. It is essential that the system operates effectively and efficiently.

The charges are calculated so that they are proportionate to the amount of work undertaken in relation to Section 106 obligations by us. The monies raised will be spent on costs relating to the administration and monitoring of planning obligations, including how monies secured are subsequently spent.

In accordance with the Community Infrastructure Levy (Amendment) (England) (No. 2) Regulations 2019 we apply a charge to cover the cost of monitoring planning obligations.

The charge is calculated once all component obligations of the Section 106 document are known, depending on predicted costs associated with monitoring processes. As a guide, the standard charge and starting point is set at £500 per individual obligation. The charge is likely to be higher for commuted sums exceeding £25,000, or where multiple trigger points for payments/actions are included. If a commuted sum is less than £5,000 for an individual obligation, a charge of less than £500 may be levied, down to a minimum of £300.

The monitoring charge is likely to be index-linked when the payment takes place later than the completion of the obligation, but it would not be subject to VAT.

There is a strong presumption that the monitoring charges will be applied.  Any deviation from the guidelines above would only be allowed where a compelling case has been made on the basis of the principles set out in government regulations and guidance.

A planning drafting charge of £150 per planning obligation may be charged in a Section 106 document where planning officers have helped to devise non-standard obligations. This is paid on receipt of the completed document.

Our legal services can assist with the preparation of Section 106 obligations if required. Alternatively, developers can utilise the templates available on our website and/or the services of their own solicitor, following which the submitted draft document and proof of ownership will be verified by legal services. In either case, a contribution will be payable by the developer towards our legal costs. This will be based on the work involved and the time spent, but as a guide, the charge for checking a submitted unilateral undertaking will be in the region of £250. A section 106 agreement is a more complex type of planning obligation that usually takes longer and as a result, is more expensive to complete. This fee is payable on receipt of the completion Section 106 document.

If you have any questions or require more information please contact us.

Under Sections 106A or 106BA of the Town & Country Planning Act 1990, a landowner may in certain circumstances seek to modify or discharge a planning obligation. Before applying it is recommended that advice is sought from planning services to ensure that the correct procedure is being followed.

•  application form (pdf / 28 KB)
•  guidance notes (pdf / 177 KB)