• X
  • Facebook
  • LinkedIn
  • Mail
  • Call Me Back
  • About
  • Calculators
  • Contact
📞 Call us on 0330 223 42 52
Investment Property Partners
  • Home
  • Property Investment
    • Commercial Property
    • Buy to Let Property
    • Overseas Property
    • Student Property
    • UK Holiday Homes
    • Development Land
  • Services
    • Property Investment Advisory
    • Property Asset Management
    • Landlord & Tenant
    • Property Management
    • Property Training
  • Finance
    • Finance
      • Commercial Property Finance
      • Bridging Finance
      • Development Finance
      • Peer-to-Peer Lending
      • Buy to Let Mortgages
      • Investment Calculators
    • Insurance
      • Property Insurance
      • Commercial Property Insurance
      • Buy to Let Insurance
  • Training
    • Valuation & Performance
    • Law & Finance
    • Ownership & Diversification
  • Knowledge
    • Property Investment
    • Development & Construction
    • Finance, Valuation & Tax
    • Overseas Property
    • Landlord & Tenant
    • Property Law & Compliance
    • Investment Calculators
  • Search
  • Menu Menu
You are here: Home1 / Development & Construction2 / Section 106 Agreements & Planning Obligation – Guide for Property D...
Section 106 agreements and planning obligation for property developers

Section 106 Agreements & Planning Obligation – Guide for Property Developers

If you are an experienced property developer then you’ll be all too familiar with section 106 agreements, also known in property circles as planning obligation. If however, these are unfamiliar terms and you are currently considering commercial property development or redevelopment opportunities that fall under the Town and Country Planning Act 1990 then you’ll need to get up-to speed… and quickly.

Section 106 agreements or planning obligations form a specific part of the Town and Country Planning Act 1990 and although it isn’t the largest section of the Act, it does play an important role when it comes to planning law.

If you’re an aspiring developer wishing to develop property and you require planning permission, you will need to become familiar with this section of the Act and understand its implications and their effect on your development proposals.

Investment Property Partners property developers guide to section 106 agreements and planning permission covers a number of important factors that you may wish to consider if you are reviewing property development opportunities that require formal planning permission.

What are Section 106 Agreements?

Put simply, a section 106 agreement forms part of the Town and Country Planning Act 1990 and is a demand by the local planning authority for a property developer to offer something to the local community that will enhance and aid the local area in return for the granting of planning permission for their development.

With or Without Planning Permission?

Still confused? Let’s explain further.

Local planning authorities know that if a property developer can acquire land or property that comes with the benefit of planning permission for a redevelopment, or that they plan to make good use of the land, then the developer will be able to make between five-to-ten times more than the value of a similar development site or property which doesn’t come with planning consent.

Because of the substantial profit uplift attached to the granting of planning permission, local planning authorities believe that the local community should also benefit, not just the property developer and that it is only fair that the developer gives something back to the local community.

Section 106 agreements can apply to both commercial and residential development projects.

It has to be said though, the whole subject of planning obligation isn’t without its problems or sceptics.

Previously, property developers felt they were being blackmailed and many spoke of how they could be refused planning consent if they did not comply with the local authorities suggested financial or community works contributions.

Planning Obligation… Benefiting the Local Area

According to the law however, money should not come into the equation and planning decisions should be based purely on whether the development benefits the local area.

If it does benefit the area and falls within the planning authorities guidelines, then planning permission should be granted, if it doesn’t bode well for the surrounding area, permission should not be given… it’s as simple as that.

What can the Planners Require under Section 106?

From a property developer’s point of view, there are often quite a few planning obligations that may need to be taken care of as part of their development project.

Typical planning obligations can include the provision of flood defences where required, widening access roads, improved traffic management systems, and the cleaning up of a development site after completion… to name a few.

Can Property Developers Ignore Section 106 Agreements?

What if a property developer chooses not to comply with their obligations set out under a 106 agreement?

Because section 106 agreements are formal planning obligations and are a condition of the granting of planning permission they can realistically not be ignored.

If a developer starts building or makes alterations but fails to meet their obligations as agreed with the planners, then they run the risk of the local authority completing the works themselves!

This may not sound too bad, but the local planning authority will then charge the developer all costs to complete the works, plus any fees incurred.

Property Investment Solutions

As a leading independent property and land investment specialists Investment Property Partners offer expert advice and support to clients across our specialist areas of expertise helping them to achieve their investment objectives.

If you are a property developer or investor searching for commercial or residential property development opportunities please contact us today to discuss how Investment Property Partners can help you.

Contact Us Today

Further reading…

More information about the Town and Country Planning Act 1990 and section 106 agreements… here →

More information about section 106 Agreements from the Community Land Advisory Service… here →

Tags: Planning obligation, Property development, Property law, Section 106 agreements, Town and Country Planning Act 1990
Share this entry
  • Share on Facebook
  • Share on X
  • Share on WhatsApp
  • Share on Pinterest
  • Share on LinkedIn
  • Share on Tumblr
  • Share on Reddit
You might also like
Tenancy agreements, Assured Shorthold Tenancy, Regulated and AssuredTenancy Agreements – Assured Shorthold Tenancy, Regulated & Assured Tenancies
Renewing or ending a business leaseRenewing or Ending a Business Lease – Commercial Property Guide
Building Regulations guideBuilding Regulations Guide for Property Developers & Investors
Gross development valueGross Development Value (GDV) – Property Developers Guide to Financial Appraisals
Commercial property investmentAll About Real Estate & Property Development
Planning permission, property developers guide to planning applicationsPlanning Permission – Property Developers Guide to Planning Applications
Conveyancing solicitors and licensed conveyancersConveyancing Solicitors & Licensed Conveyancers – Guide to Buying & Selling Property
Property law specialists and conveyancing solicitorsProperty Law Specialists & Conveyancing Solicitors

Search…

Property Knowledge

  • Property Knowledge
  • Property Investment
  • Development & Construction
  • Overseas Property
  • Finance, Valuation & Tax
  • Landlord & Tenant
  • Property Law & Compliance
  • Investment Calculators

REVIEWS

4.8
4.8 out of 5 stars (based on 13 reviews)
Read our reviews

What's New

  • Customer Reviews for Investment Property Partners

    Customer Reviews for Investment Property Partners
  • Commercial Property Investment – Guide to Investing in UK Commercial Properties

    Commercial Property Investment – Guide to Investing in UK Commercial Properties

    If you are a property investor considering commercial property …
  • Property Investment Manchester – Buying Property in Manchester

    Property Investment Manchester – Buying Property in Manchester

  • Gross Development Value (GDV) – Property Developers Guide to Financial Appraisals

    Gross Development Value (GDV) – Property Developers Guide to Financial Appraisals

    Gross development value, or GDV as it is commonly …
  • Property for Sale

    Property for Sale

    Search for investment property for sale in the UK, …
  • Buying Land for Development or Investment

    Buying Land for Development or Investment

    With a saturated UK housing market, it is hardly …

Investment Property

Investment Property Partners is a world leading independent real estate and property investment specialist focused on delivering exciting income and capital growth opportunities to private individuals, wealth management specialists, corporate and institutional property investors.

Our expert property investment advisory services are delivered to clients throughout the United Kingdom, Europe and internationally. Combining unparalleled experience, comprehensive capabilities, in-depth research and access to extensive market networks, the experts at Investment Property Partners have the experience and expertise to help you.

Expert In…

  • Property Investment
  • Investment Advisory
  • Property Services
  • Property Finance
  • Property Insurance
  • Property Training
  • Property for Sale

What's New…

  • Customer Reviews for Investment Property Partners

    Customer Reviews for Investment Property Partners
  • Commercial Property Investment – Guide to Investing in UK Commercial Properties

    Commercial Property Investment – Guide to Investing in UK Commercial Properties

    If you are a property investor considering commercial property investment …
  • Property Investment Manchester – Buying Property in Manchester

    Property Investment Manchester – Buying Property in Manchester

  • Gross Development Value (GDV) – Property Developers Guide to Financial Appraisals

    Gross Development Value (GDV) – Property Developers Guide to Financial Appraisals

    Gross development value, or GDV as it is commonly known …

London

1 Berkeley Street
Mayfair
London W1J 8DJ
0330 223 42 52
[email protected]

Manchester

Pall Mall
61 – 67 King Street
Manchester M2 4PD
0330 223 42 52
[email protected]

GET SOCIAL

Connect with us...

Twitter   Facebook   Google+   LinkedIn

© Copyright 2025 - Investment Property Partners
  • X
  • Facebook
  • LinkedIn
  • Mail
  • Home
  • About
  • Careers
  • Environment
  • Privacy
  • Terms
  • Reviews
  • Sitemap
Tenancy Agreements – Assured Shorthold Tenancy, Regulated & Assured...Tenancy agreements, Assured Shorthold Tenancy, Regulated and AssuredRenewing or ending a business leaseRenewing or Ending a Business Lease – Commercial Property Guide
Scroll to top

This site uses cookies. By continuing to browse the site, you are agreeing to our use of cookies.

Learn moreOK

Cookie and Privacy Settings



How we use cookies

We may request cookies to be set on your device. We use cookies to let us know when you visit our websites, how you interact with us, to enrich your user experience, and to customize your relationship with our website.

Click on the different category headings to find out more. You can also change some of your preferences. Note that blocking some types of cookies may impact your experience on our websites and the services we are able to offer.

Essential Website Cookies

These cookies are strictly necessary to provide you with services available through our website and to use some of its features.

Because these cookies are strictly necessary to deliver the website, refusing them will have impact how our site functions. You always can block or delete cookies by changing your browser settings and force blocking all cookies on this website. But this will always prompt you to accept/refuse cookies when revisiting our site.

We fully respect if you want to refuse cookies but to avoid asking you again and again kindly allow us to store a cookie for that. You are free to opt out any time or opt in for other cookies to get a better experience. If you refuse cookies we will remove all set cookies in our domain.

We provide you with a list of stored cookies on your computer in our domain so you can check what we stored. Due to security reasons we are not able to show or modify cookies from other domains. You can check these in your browser security settings.

Google Analytics Cookies

These cookies collect information that is used either in aggregate form to help us understand how our website is being used or how effective our marketing campaigns are, or to help us customize our website and application for you in order to enhance your experience.

If you do not want that we track your visit to our site you can disable tracking in your browser here:

Other external services

We also use different external services like Google Webfonts, Google Maps, and external Video providers. Since these providers may collect personal data like your IP address we allow you to block them here. Please be aware that this might heavily reduce the functionality and appearance of our site. Changes will take effect once you reload the page.

Google Webfont Settings:

Google Map Settings:

Google reCaptcha Settings:

Vimeo and Youtube video embeds:

Other cookies

The following cookies are also needed - You can choose if you want to allow them:

Accept settingsHide notification only