Conditions or a section 106 agreement: where the line falls

The choice between a condition or section 106 obligation is not a matter of preference. A condition cannot require the payment of money, cannot impose positive obligations on land outside the applicant's control, and does not bind successors in title in the way a deed does. Those three limits decide most cases before anyone reaches a view about which is more convenient.

Where the matter can properly be dealt with by condition, it should be. National guidance is explicit that obligations should only be used where a condition cannot do the job, and the practical consequence is a faster determination.

The tests for a condition

Six tests apply, and all six have to be met. A condition must be necessary, relevant to planning, relevant to the development being permitted, enforceable, precise and reasonable in all other respects.

Enforceable and precise do the most work in practice. A condition requiring a scheme to be operated to a high standard is neither, and it will not survive an appeal. A condition requiring a construction management plan to be submitted and approved before work starts, and then implemented, is both.

Relevance to the development matters too. A condition attached to a permission for a house extension cannot require works to an unrelated part of the site, and a condition cannot be used to regulate something the permission does not authorise.

The statutory tests for an obligation

An obligation under section 106 can only be taken into account in deciding an application if it meets the tests in regulation 122 of the Community Infrastructure Levy Regulations 2010: necessary to make the development acceptable in planning terms, directly related to the development, and fairly and reasonably related in scale and kind to it.

These are statutory tests rather than policy, and they bite. An authority asking for a contribution to a project with no connection to the development is asking for something it cannot lawfully take into account.

The pooling restriction that once limited contributions to five obligations per infrastructure project was removed in 2019, so the old argument about the sixth contribution no longer arises. Monitoring fees are now expressly permitted, provided they are proportionate and reasonably relate to monitoring the obligations in that agreement.

What a condition cannot do

Four categories fall on the obligation side of the line, whatever anyone's preference.

The negative form of condition, commonly called a Grampian condition, is the partial answer to the third of these. It prohibits development until a specified thing has happened, rather than requiring anyone to do it. It is lawful where there are reasonable prospects of the action being carried out within the life of the permission, and the note on Grampian conditions and their limits sets out where that test bites.

Trigger points matter as much as the mechanism. An obligation that bites on first occupation is easier to live with than one that bites before any development starts, and the difference is worth negotiating rather than accepting from a model agreement.

Highway works are the classic case. A condition can prevent occupation until an access has been constructed. The construction itself usually needs an agreement under section 278 of the Highways Act 1980 with the highway authority.

Unilateral undertakings on small schemes

A unilateral undertaking is an obligation given by the applicant and the landowners alone, without the authority as a party. It is a deed, it binds the land, and it does not need the council's solicitor to negotiate it.

For a small scheme with one or two straightforward contributions, this is often the quickest route. It is also the standard mechanism at appeal, where an agreement with the authority may be impossible to complete in time.

The drawback is that a unilateral undertaking drafted without dialogue can miss what the authority actually needs, and an inspector will give no weight to an undertaking that fails the regulation 122 tests. Send a draft to the authority even where you are not asking it to sign.

Watch the ownership position. Every person with an interest in the land, including a mortgagee, needs to be bound, or the obligation is worth less than it appears.

Timing and the effect on determination

This is where the choice shows up in the programme. Conditions are drafted by the officer and appear on the decision notice. An agreement has to be negotiated, engrossed and completed by every party before the decision can issue.

A resolution to grant subject to completion of a section 106 agreement is not a permission. Schemes sit in that state for months, usually because of title complexity, a lender's consent or a disagreement about a single clause.

Three habits shorten it. Provide the title documents and the identity of every interested party at submission. Ask for the authority's model agreement early and work from it. And agree the heads of terms in principle before the committee date, so the drafting is a tidying exercise rather than a negotiation. Where the matter is going to committee at all, the note on committee referral thresholds explains what drives that.

Discharge, variation and the long tail

Conditions are discharged by application to the authority, and a condition can be varied or removed through a section 73 application, which produces a new permission subject to different conditions.

Obligations are harder to move. A deed can be varied by agreement between the parties at any time. Where the authority will not agree, an application to modify or discharge can be made once five years have passed from completion, with a right of appeal to the Secretary of State.

That asymmetry is a reason to think carefully before accepting an obligation for something a condition could handle. A clause that made sense at the start of a five-year build can become an obstacle by the end of it, and the route out is slower than most developers expect.

Keep the agreement and the conditions consistent. Where the same matter appears in both, they will eventually conflict, and the discharge process will stall while two parts of the council decide which one governs. A clear Planning Statement that sets out which mechanism is proposed for each matter, and why, makes the officer's job easier and tends to produce a shorter list of both. Where affordable housing is involved, the Affordable Housing Statement should say the same thing in the same terms.

This is general guidance, not legal advice. Check the position with your local planning authority or a qualified professional before relying on it.

Draft the planning documents for your scheme on PlanScope, then settle the heads of terms with the officer before committee.

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