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Section 106 Agreements

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The term 'Section 106 Agreement' refers to Section 106 of the Town and Country Planning Act 1990. It is a legally binding contract that allows the local planning authority to create a restriction or obligation that is associated with the granting of planning permission.

How they work

In some cases, the National Park Authority may grant planning permission on the condition that a Section 106 Agreement be signed. Once the Section 106 Agreement is signed, it is a legally binding contract that stays with the land or the property it refers to and it may have an effect on its value.

Examples of a Section 106 Agreement could be where:

  • a new house can only be occupied by a person with a local connection
  • a developer is obliged to provide affordable housing for local needs as part of a major development
  • a new house on agricultural land is restricted to agricultural workers only

What do I need to know?

If you need to sign a Section 106 Agreement, you need to be fully aware of the future implications of entering into this agreement. We recommend that you seek advice from your solicitor about your specific case.

Restricted occupancy obligations in a Section 106 Agreement could limit:

  • who can live in a house
  • who a house can be sold to
  • how a house can be marketed
  • the price at which a house can be sold

This may be acceptable to you now, but you should consider:

  • Would it still be acceptable in 30 or 50 years' time?
  • Would this still be acceptable to your children if they were to inherit the property?
  • Would this still be acceptable if your circumstances were to change?

A Section 106 Agreement is registered against the property at the Land Charges Department and sometimes at the Land Registry. If you decide to sell your property, the Section 106 Agreement will show up in the legal searches carried out by the buyer's solicitor.

Example agreements

Section 106 Agreements are important legal documents and they are usually drafted by the National Park Authority. A fee may need to be paid for this service.

You can download a blank standard agreement below to see the precise obligations you may be required to enter into. The examples below are intended as guidance only.

The Authority needs to retain the stock of affordable and more affordable housing. To help achieve this, properties are often subject to a Section 106 Agreement, restricting occupancy and thereby retaining its use by those qualifying local people who need affordable or more affordable housing in perpetuity. The Section 106 Agreement runs with the property and all subsequent owners are required to comply with it. The Authority needs to be sure that, on sale or potential sale of restricted occupancy housing, all occupants meets the terms of the Section 106 Agreement. Once the Authority is assured that this is the case it will provide a certificate confirming this to the intended occupant(s).

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