Section 106 Agreements

Planning obligations are made under s106 of the Town and Country Planning Act 1990. The use of s106 is governed through secondary legislation (Community infrastructure regulations 2010, as amended, Regulation 122), which states;

A planning obligation may only constitute a reason for granting planning permission or the development if the obligation is—

(a) necessary to make the development acceptable in planning terms;

(b) directly related to the development; and

(c) fairly and reasonably related in scale and kind to the development.

Planning obligations may be created by agreement between the developers and local planning authorities (and other relevant parties) or may be created by the person with the interest making an undertaking (“a Unilateral Undertaking”). Planning obligations are negotiated within the context of the determination of a planning application. They may restrict development or use of the land, require operations or activities to be carried out in, on, under or over the land; require the land to be used in any specified way; or require payments to be made to the authority either in a single sum or periodically.

Planning obligations run with the land and may be enforced against both the original covenanter and against anyone acquiring an interest in the land from him/her, unless the agreement specifies otherwise. They are also a local land charge for the purposes of the Local Land Charges Act 1975 and so must be registered with the Local Land Charges Register.

It is especially important that our policies, practices and procedures in respect of s106 agreements and unilateral undertakings are clearly set out and have regard to the development plan and supplementary planning documents. This is to facilitate: 

• A shared understanding of what may and may not be achieved; 
• Clearly focused and constructive joint working between the council officers, developers and service providers; 
• Avoidance of any unnecessary delay in negotiating and delivering service improvements; 
• Ensuring that the necessary s106 benefits are maximised through managing those risks associated with the pre-application phase. 
• Ensuring that we do not act (and is not perceived to act) in an inconsistent, arbitrary or opaque manner in seeking s106 Agreements.

 

The successful implementation of these procedures and practices depends on: 

• Fostering support from service providers/beneficiaries and the development community through strengthening joint working protocols;
• Training for officers in the potential and limitations of s106 Agreements and effective negotiation skills; 
• Building new capacity and capability into existing legal, administrative and monitoring systems; 
• A solid evidence base to support our values towards compliance and good governance.

Standard templates and clauses are available in Word format, on request, and included as templates within this framework. The unilateral template can be amended where necessary for Hertsmere only obligations. HBC Infrastructure Funding Statement 2020-2021 PDF 225Kb

The Community Infrastructure Levy (CIL) is paid on qualifying development irrespective of the impact of development or infrastructure requirements in the local area; it has replaced the use of ‘tariff’ style s106 contributions for general infrastructure. Our CIL charging schedule is set out in Part 4 of the Development Framework. There may however be circumstances, particularly on larger sites, where a development requires certain aspects of design, mitigation works, or a specific piece of infrastructure to be in place. Where such requirements have not been prioritised for expenditure from CIL, or cannot be secured for delivery through another funding source, they will need to be secured through a s106 agreement in addition to the CIL payment.

We have not proposed a CIL charge for residential development in the majority of the area covered by the Elstree Way Corridor Area Action Plan and will instead facilitate the delivery of the necessary infrastructure solely through s106 on most sites within the Elstree Way Corridor (EWC). The rationale for this is that development in the area will be transformational, with a clear need for infrastructure to be supplied in tandem with development. The approach we adopted in the EWC is set out in Section 9 of the Development Framework.

We will set out what we propose to spend CIL towards in our Infrastructure Funding Statement (IFS) list; the list will be regularly reviewed and consulted on and demonstrate the broad range and type of infrastructure that it is likely we will seek to spend CIL funds upon. How we will use CIL and allocate schemes to the IFS list, is covered in Section 5 of the Development Framework.

Where CIL expenditure has not been prioritised for infrastructure delivery deemed necessary by this framework to allow a development to proceed, the council will seek delivery via s106. The nature of such contributions will depend on the development proposed, the infrastructure required and the opportunities to secure delivery.

The links below provide a broad indication of the potential on-site requirements that the council will require as part of any application that meets or exceeds the given thresholds; such requirements should be provided within the overall design of the proposal. Not all development will be required to supply the following requirements, particularly if capacity already exists within the proximity of the proposed site. Where a development is required to make a contribution, but is unable to provide this on-site or within the vicinity of the site, the council may exceptionally allow payment in kind; the following sections therefore offer an indication of the likely cost that may apply.

Developers should have regard to any specific requirements that may be applicable to their proposal by way of the council’s emerging Site Allocations and Development Management Policies Plan. In all cases, approaching the council for a pre-application assessment will provide greater clarity on potential s106 requirements (although this should not be considered as a formal determination).

Other stakeholders may request the provision of specific facilities (such as Hertfordshire County Council, NHS/Clinical Commissioning Group or Hertfordshire Constabulary) and where this is unlikely to be supplied from CIL, delivery via S106 may be required. Such requests will only be considered where it is consistent with the policy framework and where a clear need is demonstrated consistent with Regulation 122.

Potential Contributions:

Open Space and Amenity

Employment and the Local Economy

Air Quality

Trees

Community Safety

Parking and Travel Plans

Town Centres and Public Realm

Monitoring and Administration

All development sites of ten units or more (gross) and all residential sites of more than 0.2ha (including use class C2) are required to provide affordable housing. The only exception is a single replacement dwelling on a large plot (0.2 ha or above) to replace an existing single dwelling.

The amount of affordable housing required is 40% of residential units in postcode areas EN5 4, WD25 8, WD7 8 and WD7 7; and at least 35% of residential units in all other locations.

The mix of affordable units should be agreed with the council’s appointed housing officer at an early stage in the process having regard to the guidance set out in the SPD.

The tenure mix is to be agreed with the council’s appointed housing officer having regard to the guidance set out in the SPD. It is likely that on sites of 15 or more dwellings, affordable homes comprising three bedrooms or more will need to remain as social rented.

The presumption is that provision of Affordable Housing is to be made on site. Alternatives to on-site provision will only be agreed exceptionally and where off-site alternatives are considered to be the best way to achieve the delivery of more affordable units. Options for alternative provisions of Affordable Housing can be found in Section 7 of the Development Framework.

To some extent, the use of any s106 agreement is likely to be time-consuming and involve elements of complication. It is clearly in the interest of all parties to keep this down to a minimum and the council needs to meet targets for turning around the majority of applications within eight weeks (13 weeks for larger applications), as part of the delivery of an efficient service to applicants. For this to occur: 

• The s106 agreement will be viewed as an integral part of the planning application process with applicants providing draft heads of terms at the earliest opportunity, preferably when the application is submitted; 
• The committee report on any planning application will include clear recommendations indicating the nature of the s106 and any trigger points;
• All consultees (internal and external to the council) will be given 21 days to indicate the nature of the s106 and any items they wish to be considered for inclusion in the agreement; 
• For smaller applications (less than 10 units), the council will consider a unilateral undertaking from an applicant instead of a s106 agreement, in order to provide a more expedited service. 
• In instances where planning permission is granted subject to the signing of a section 106 agreement, it is expected that the s106 should be agreed and completed expediently follow the committee decision. Unless there are exceptional and acceptable reasons for the delay, planning consent may be refused: The following resolution is proposed is such instances:

 

“X Powers be delegated to the Development Team Manager(s) to grant planning permission subject to the receipt of an agreement or unilateral undertaking under Section 106 of the Town and Country Planning Act,
X Should the agreement or unilateral undertaking under Section 106 not be completed by x, the Development Team Manager(s) be delegated powers, should it be considered appropriate, to refuse the planning application for the reason set out.”

• • • We recognise that in some cases it may exceptionally need to consider whether there is scope to review the level of obligations/financial contributions sought (including the potential use of claw back arrangements) in order to bring a scheme forward, particularly in light of any CIL liabilities. The broad viability of development in different areas of the borough was considered as part of the work undertaken on the Affordable Housing policies in the Core Strategy, as well the evidence for establishing the CIL charging schedule.

As far as practicable, all trigger dates are to be based on commencement dates, although on larger schemes this may be possible on a phased basis to be agreed between the council and the developer.

Generally, trigger dates based on ‘Occupation’, are prone to high risks, difficult to monitor and should be avoided. This type of condition or s106 clause will result in trigger points, which are unclear and require greater resources and time to monitor.

Included in the s106 will be a requirement for developers to notify the Planning Unit’s s106 Monitoring Officer of trigger dates such as the commence of development or a particular phase within the development.

It is important to note that any agreed trigger date for completing a number of units will not necessarily be the same as the time in which the entire development is completed. The council will be flexible in seeking immediate payment of outstanding contributions in cases where the developer or a representative gives notification that the agreed date cannot be met and a reasonable alternative date is offered and agreed between the s106 monitoring officer and the developer.

Further information on the legal matters relating to s106 agreements can be found in Section 8 of the Development Framework.

Residential development in the area allocated in the Elstree Way Corridor Area Action Plan (EWCAAP) will be required to contribute towards the provision of a series of key infrastructure improvements. In order to facilitate such obligations via s106, the council has proposed a ‘nil’ rate of CIL within the main part of the corridor.

Development within the area identified as 'Elstree Way Corridor' on the adopted CIL charging map will be required to contribute to infrastructure through a Section 106 planning agreement.

Further information on Elstree Way Corridor Contributions can be found in Section 9 of the Development Framework.

Existing S106 Agreements can be found online under the planning application reference using our public access system. Electronic copies of completed S106 Agreements are available along with the other application documentation.