What is a Section 106 Agreement and why might you need legal support?

If you are buying, selling, developing or dealing with land, you may come across something called a section 106 agreement. This may sound technical and off-putting but in reality, it is a legal agreement linked to planning permission. A section 106 Agreement can have a very real impact on what can be built, what must be paid for and what obligations will continue long after a property changes hands.

What Is a Section 106 Agreement?

A section 106 agreement, sometimes called a planning obligation, is a legally binding agreement made under section 106 of the Town and Country Planning Act 1990. It is usually entered into between a developer or landowner and the local planning authority as part of the planning process. Its purpose is to make a development acceptable in planning terms where planning permission might not otherwise be granted.

For example, it may require financial contributions towards local infrastructure, restrictions on how land is used, provision of affordable housing, highway works, open space arrangements or ongoing management responsibilities and more recently self-build regulations. The exact terms depend on the site and the nature of the proposed development.

How do Section 106 Agreements work in practice?

These agreements are often negotiated while a planning application is being considered. Once completed, they usually sit alongside the planning permission and can ‘bind’ the land itself, not just the original developer. That means obligations may still affect future owners, lenders and buyers. In some cases, works must be completed before development starts. In others, payments or actions are triggered at later stages, such as on commencement, occupation of a certain number of units or completion of the development.

This is one reason why section 106 agreements deserve careful attention. An obligation that looks manageable at first glance may have deadlines, financial consequences or legal restrictions that are easy to overlook.

Common examples of Section 106 obligations

Although every development is different, section 106 obligations often include matters such as:

• Affordable housing requirements
• Financial contributions towards schools, transport, healthcare or community facilities
• Highway or access works
• Public open space or landscaping obligations
• Ecology, biodiversity or environmental mitigation measures
• Restrictions on occupation or use
• Monitoring fees and enforcement provisions
• Long-term maintenance or management commitments.

Why legal support with a Section 106 Agreement can be important

Section 106 agreements are not simply standard forms that can be signed without proper consideration and understanding. They can be detailed, heavily negotiated documents with long-term consequences. Legal support can help you to understand the practical implications of the agreement, whether the wording reflects what has been agreed, when obligations are triggered and whether there is any unnecessary risk. A solicitor can also work alongside your planning consultant, surveyor or other professional advisers so that the legal position matches the commercial reality of the project.

This is not just relevant for major developers. Landowners, small builders, investors and even buyers of affected property may all benefit from clear advice before committing themselves.

What can go wrong without proper advice?

Problems often arise when obligations are misunderstood, deadlines are missed or liability is wider than expected.

• A party may assume a payment is due much later than it really is.
• A buyer may discover after exchange that a property is still affected by obligations attached to the land.
• A developer may find that planning permission cannot be implemented until the agreement has been completed in an acceptable form. In some situations, breaches can lead to enforcement action, delay, additional cost or difficulty selling or refinancing the property.

Early legal advice can often prevent these issues. It is usually far easier to identify concerns at the start than to try to fix them later once time and money have already been committed.

Who may need help with a Section 106 Agreement?

Legal support may be useful if you are:

• A landowner considering a development opportunity
• A developer negotiating planning obligations
• A buyer acquiring land or property affected by an existing agreement
• A seller wanting to understand what must be disclosed
• An investor or lender assessing risk
• A business needing clear advice on timescales, costs and future liability.

How a solicitor can help with a Section 106 Agreement

A solicitor can review the draft agreement, explain the legal effect of each obligation, raise points for negotiation and help ensure that the document properly reflects the intended deal. They can also advise on title issues, future disposals, lender requirements and whether obligations may bind successors in title. Where a project involves multiple advisers, legal input can help bring everything together so that the documentation supports the wider transaction instead of causing avoidable delay.

Need advice on a Section 106 Agreement?

If you are dealing with a section 106 agreement, it is sensible to take advice as early as possible. Clear legal guidance can help you understand your position, avoid unnecessary risk and move forward with greater confidence. Where planning obligations affect land, timing and detail matter, and practical support at the right stage can make the process far smoother and less stressful.

The commercial property team at Fraser Dawbarns will be happy to assist. Please contact Sarah Johnson in our King’s Lynn office on sarahjohnson@fraserdawbarns.com or 01553 666600 or 01945 468726 to discuss how we might help you.

How To Contact Us:

To contact a member of our team, you can fill in our online enquiry form, email info@fraserdawbarns.com, or call your nearest office below. If you’d like to speak to a member of our team at one of our offices across Norfolk and Cambridgeshire, visit our offices page.

Wisbech: 01945 461456

March: 01354 602880

King’s Lynn: 01553 666600

Ely: 01353 383483

Downham Market: 01366 383171

In order to protect client anonymity, the initials in the above case study have been changed and do not relate the the client or other parties in any way. This article aims to supply general information, but it is not intended to constitute advice. Every effort is made to ensure that the law referred to is correct at the date of publication and to avoid any statement which may mislead. However, no duty of care is assumed to any person and no liability is accepted for any omission or inaccuracy. Always seek advice specific to your own circumstances. Fraser Dawbarns LLP is always happy to provide such advice.