Modifying a section 106 obligation after five years
After five years an owner can apply to modify or discharge a planning obligation without the council's agreement. The test is narrow, and viability is not part of it.
A section 106A modification application is the statutory route to change or remove a planning obligation once five years have passed since the deed was completed. Before that date the only way to alter it is by agreement with the local planning authority, and every party bound by the deed has to agree. After it, an owner can apply unilaterally, the authority has eight weeks to decide, and a refusal carries a right of appeal under section 106B.
The test is narrower than most applicants expect. The question is whether the obligation still serves a useful purpose, not whether it has become expensive or inconvenient.
The statutory route under section 106A
Section 106A of the Town and Country Planning Act 1990 provides two mechanisms. Subsection (1) allows modification or discharge by agreement between the authority and the persons against whom the obligation is enforceable, at any time. Subsection (3) allows any person against whom the obligation is enforceable to apply to the authority after the relevant period has expired.
The procedure for that application, including the five year relevant period and the eight week determination period, comes from the 1992 modification and discharge regulations. The application has to identify the obligation, the land, and the modification or discharge sought.
Note that the right belongs to the person bound, which in practice means the current owner and anyone else with an interest that the deed binds. A developer who has sold the land no longer has standing.
When the five year clock starts
The period runs from the date the obligation was entered into, which is the date of the deed, not the date of the planning permission and not the date development started. Those three dates can be months or years apart.
Check the execution date on the engrossed deed rather than the date printed on the decision notice. Where a deed has been varied by a supplemental agreement, the position on which date governs depends on what the supplemental deed did, and it is worth taking a view on that before applying rather than after.
Obligations may also specify their own period. The regulations set five years unless the instrument itself prescribes a different period, so read the deed first.
The test the authority applies
On an application under subsection (3), the authority must determine one of three outcomes.
- That the obligation shall continue to have effect without modification.
- That the obligation no longer serves a useful purpose, in which case it is discharged.
- That the obligation continues to serve a useful purpose, but would serve that purpose equally well if modified in the way applied for, in which case it is modified accordingly.
Both limbs of the second and third outcomes are demanding. "No longer serves a useful purpose" means the planning purpose behind the obligation has gone, for example a contribution towards a bus service that no longer operates, or a restriction protecting a view now blocked by a consented building.
"Would serve that purpose equally well if modified" is about equivalence. Substituting on-site affordable housing for an off-site contribution of equal planning value can meet it. Reducing the number of affordable units because margins have tightened will not, because the modified obligation plainly serves the purpose less well.
Evidence that supports a modification
Build the case around the purpose, which means starting with the original committee report and officer recommendation. Those documents say why the obligation was required, and they are the benchmark against which usefulness is judged.
Then show what has changed. Useful evidence includes the withdrawal or completion of the infrastructure the contribution was intended to fund, a change in the adopted local plan policy that required it, a subsequent permission that supersedes the development the obligation attached to, or an authority's own infrastructure funding statement showing the contribution unspent and no longer allocated.
Unspent contributions are a practical starting point. Where money has been held beyond its repayment date without being applied to the stated project, the purpose argument is considerably stronger.
Where the obligation concerns open space or play provision on a small scheme, the calculation basis behind it may itself have changed, as discussed in open space and play space contributions on small schemes.
The decision and the section 106B appeal
The authority has eight weeks. If it refuses, or determines that the obligation should continue unmodified, or fails to decide in time, the applicant may appeal to the Secretary of State under section 106B. The appeal is normally dealt with by written representations and decided by an inspector.
An appeal under section 106B is confined to the same test. It is not an opportunity to reopen the merits of the original permission, and inspectors say so. Bring the evidence on purpose, not a general argument that the scheme is now unattractive.
There is no appeal against a refusal to enter into a voluntary variation under subsection (1), which is one reason applicants sometimes prefer to wait for the five years rather than negotiate.
Negotiated variation as the alternative route
Most variations happen by agreement, because it is faster and more flexible. A deed of variation can do things the statutory route cannot: change trigger points, substitute one contribution for another, add phasing, or release part of the land.
The trade-offs are real. The authority can decline for any reason, it will require its legal costs to be met, and every party bound by the original deed including mortgagees has to execute the new one. Tracking down a lender who took security six years ago can take longer than the drafting.
Where the variation accompanies a section 73 permission, the binding question becomes a drafting problem in its own right, because the original deed may define the permission it attaches to narrowly.
Where viability has moved since the deed
This is the question consultants are usually asked, and the honest answer is that section 106A is a poor tool for it. The statutory test does not ask whether the scheme is viable. The temporary provisions that did allow affordable housing obligations to be reviewed on viability grounds ceased to have effect on 30 April 2016.
What remains is negotiation, supported by a Viability Assessment prepared on the authority's preferred inputs and disclosed on the basis that it will be published. Authorities increasingly expect review mechanisms to be built into new deeds instead, so that a change in values triggers a recalculation rather than a renegotiation.
If the obligation concerns affordable housing, expect the authority to test the numbers hard and to involve its own adviser. The starting point remains the tenure and mix set out in the original Affordable Housing Statement, and departing from it needs more than a spreadsheet.
And draft the next deed better. A review mechanism, a clear definition of the permission bound, and a sunset provision for unspent contributions prevent most of the problems this article describes.
Enter your postcode on PlanScope to see which supporting documents a scheme of this kind usually needs.
This is general guidance, not legal advice; check the position with your local planning authority or a qualified professional before relying on it. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.
Frequently asked questions
When does the five year period start?
From the date the obligation was entered into, meaning the date the deed was executed, not the date of the planning permission or the start of development. Those dates can differ by years. Check the engrossed deed, and read it first, because an instrument may prescribe its own period instead of the default five years.
Can I use section 106A to reduce affordable housing on viability grounds?
Not directly. The statutory test asks whether the obligation still serves a useful purpose, or would serve it equally well if modified, and a reduction in affordable units plainly serves the purpose less well. The temporary viability review provisions for affordable housing obligations ceased to have effect on 30 April 2016.
What happens if the council does not decide in time?
The authority has eight weeks under the 1992 regulations. Failure to determine within that period gives a right of appeal to the Secretary of State under section 106B, as does a refusal or a determination that the obligation should continue unmodified. Appeals are normally dealt with by written representations and decided by an inspector.
Is a deed of variation better than a statutory application?
Usually faster and far more flexible, because the parties can agree changes the statutory test would not permit, such as new trigger points or phasing. The costs are that the authority can refuse for any reason, it will require its legal costs met, and every bound party including mortgagees must execute the new deed.
Who can make a section 106A application?
Any person against whom the obligation is enforceable, which in practice means the current owner of the burdened land and others whose interests the deed binds. A developer who has sold on has no standing. Confirm the title position and the parties to the original deed before spending money on the application.
Sources and further reading
This article is general guidance about the planning system in England and, where stated, the rest of the UK. It is not legal or professional advice. Check your local planning authority’s validation requirements and take professional advice for your specific site.