The term ‘Section 106 Agreement’ refers to Section 106 of the Town and Country Planning Act 1990.
It is a legally binding contract between a developer (or a number of interested parties) and a Local Planning Authority . It allows the local planning authority to create a restriction or obligation on the developer that is associated with the granting of planning permission.
The term ‘planning gain’ is sometimes used to describe the case where a developer agrees (via 106) to ‘soften the impact’ of building a big new estate, say, by also building a new road or by paying towards building a school or other local benefits.
Eastington Parish Council receive money because of a 106 agreement made with the owners of the Solar Farm on the A38, as it was felt that this is just compensation for depriving us of some of our landscape. We call this the ‘Solar fund’ and many of our local community projects benefit from it.
A common use of the 106 agreements is to do with ‘restricted occupancy’. Restricted Occupancy Obligations in a Section 106 Agreement can describe the category of person who can live in the dwelling – in our case, the conditions are that the person lives or lived in Eastington, has specific family ties, or works here. We also say that the houses can only ever be rented by their occupiers, not bought.
A Section 106 Agreement is registered against the property at the Land Charges Department and sometimes at the Land Registry. If the land/properties were ever sold, the Section 106 Agreement will show up in the legal searches carried out by the buyer’s solicitor, and would carry over to any new landowner.