Understanding a section 106 agreement as a neighbour
For a neighbour watching a large scheme, the section 106 agreement often matters more than the permission. What it can lawfully require, how triggers work and where to find out what the money paid for.
A section 106 agreement is a deed. It binds the land rather than the developer personally, it is enforceable against whoever owns the site next, and it is a public document you can read. For a neighbour watching a large scheme go through, the agreement often matters more than the permission, because it is where the affordable housing, the play area, the junction improvement and the money for school places actually live.
Section 106 of the Town and Country Planning Act 1990 creates the power. Regulation 122 of the Community Infrastructure Levy Regulations 2010 limits it, and understanding that limit explains most of what councils can and cannot secure.
What an agreement is and who signs it
An obligation is entered into by a person with an interest in the land, almost always the freeholder, and usually by the local planning authority as the other party. Where a highway authority or a county council is providing something, it joins as a party too.
A unilateral undertaking is the same instrument signed by the landowner alone. These are common at appeal, where an appellant offers an obligation without the council's cooperation, and they bind the land in the same way.
Once completed, the obligation is registered as a local land charge. That is why it survives a sale, and why a buyer's solicitor finds it during conveyancing. It also means the obligation continues to apply long after the people who negotiated it have moved on, which is both its strength and the reason monitoring is patchy.
Where to read it
The agreement is a public document. Councils normally publish the completed deed on the planning application page of their register, alongside the decision notice.
But timing is the difficulty. The agreement is usually completed shortly before the decision is issued, so during the consultation period there may be nothing to read beyond a draft heads of terms in the officer report. If a scheme matters to you, ask the case officer for the heads of terms while the application is live, because that is the point at which the content can still change.
Where a document is not published, a request under the Freedom of Information Act or the Environmental Information Regulations will normally produce it. Councils occasionally redact commercially sensitive viability figures, though national policy expects viability assessments to be published.
The three tests that limit what can be asked for
Regulation 122 makes it unlawful to take an obligation into account as a reason for granting permission unless it meets all three of the following.
- Necessary to make the development acceptable in planning terms.
- Directly related to the development.
- Fairly and reasonably related in scale and kind to the development.
These are statutory tests, not guidance. They are the reason a council cannot require a developer to resurface a road the site does not use, or to fund a service unconnected with the scheme, however welcome that would be locally.
They also answer the question neighbours ask most often, which is why a large development did not pay for something the area obviously needs. If the need does not arise from the development, the obligation fails the second and third tests and the authority cannot lawfully rely on it.
The restriction that used to limit councils to pooling five contributions towards a single infrastructure project was removed in 2019, so authorities can now pool freely. That change widened what is possible without touching the three tests.
Affordable housing and review mechanisms
Affordable housing is usually the largest item. The agreement sets the number of units, the tenure split between social rent, affordable rent and intermediate products, the location of the units within the scheme, and the mechanism for transferring them to a registered provider.
Read three things in that section. Whether the units are pepper-potted or grouped, whether they have the same external appearance and access arrangements as the market units, and what happens if no registered provider takes them.
Where viability has been argued, the agreement may contain review mechanisms. An early stage review applies if the scheme has not started within a set period, and a late stage review recalculates the position once sales values are known, with any surplus converted into additional affordable housing or a payment. These are common on larger urban schemes and are the practical answer to a developer arguing that a scheme cannot afford policy compliant provision. The evidence behind that argument sits in a Viability Assessment, and national policy expects it to be published rather than kept confidential.
Trigger points and monitoring
An obligation without a trigger is unenforceable in practice. Every clause should be tied to an event.
| Trigger | Typical use |
|---|---|
| Before development begins | Highway works design approval, construction management plan, payment of monitoring fees |
| Before occupation of the first unit | Play area completion, travel plan submission, access works |
| On occupation of a stated number of units | Phased education and open space contributions |
| Before practical completion | Final landscaping, transfer of open space to management |
Monitoring fees are now a standard element and were given a clear legal basis in 2019. They pay for the officer time needed to check that triggers have been met, which is worth supporting rather than objecting to, because unmonitored obligations are the ones that quietly lapse.
What happens if obligations are not met
The authority can enforce the obligation by injunction. It can also enter the land, carry out the operations required by the obligation and recover the cost from the person against whom it is enforceable.
In practice enforcement starts with correspondence, and it depends on someone noticing. A neighbour with dated photographs showing that the play area promised before first occupation does not exist, while 40 homes are occupied, gives an officer something concrete to act on. That is a more productive route than a complaint about the development in general, in the same way that asking the council to serve a section 215 notice works better with evidence than with argument.
Obligations can also be changed. After five years an application can be made under section 106A to modify or discharge an obligation, with an appeal to the Secretary of State if the council refuses. Watch for these on schemes you followed, because the affordable housing element is the one most often revisited.
Finding out how the money was spent
Since 2020, authorities that receive planning obligation or levy income have had to publish an annual infrastructure funding statement. It sets out what was received, what was spent, what is held and what it is allocated to.
That statement is the document to ask for. It is published on the council's website, usually in the autumn covering the previous financial year, and it is written to be read by the public rather than by planners. Where the detail you want is not in it, a request under the environmental information rules naming the application reference and the clause will usually get there.
Community involvement in large schemes is meant to run alongside all of this, and what a developer says it did is recorded in a Statement of Community Involvement submitted with the application.
This is general guidance rather than legal advice. Check the position with your local planning authority or a qualified professional before relying on it, and browse the PlanScope report types if you want to understand what a major application usually contains.
Frequently asked questions
Can I read a section 106 agreement?
Yes. The completed deed is a public document and is normally published on the council's planning register alongside the decision notice. It is also registered as a local land charge. While an application is live the deed may not exist yet, so ask the case officer for the draft heads of terms instead.
Why can a council not ask a developer to fund anything it likes?
Because regulation 122 of the Community Infrastructure Levy Regulations 2010 sets three statutory tests. An obligation must be necessary to make the development acceptable in planning terms, directly related to the development, and fairly and reasonably related to it in scale and kind. All three must be met.
What is a viability review mechanism?
A clause that recalculates the affordable housing position later. An early stage review applies if a scheme has not started within a set period, and a late stage review recalculates once sales values are known, converting any surplus into additional affordable housing or a payment. They are common on larger urban schemes.
What happens if a developer ignores an obligation?
The authority can enforce it by injunction, and can also enter the land, carry out the required operations and recover the cost. Enforcement usually begins with correspondence and depends on someone noticing, so dated photographs showing a trigger that has passed without compliance are the most useful thing a neighbour can supply.
How do I find out how section 106 money was spent?
Ask for the council's infrastructure funding statement. Authorities receiving planning obligation or levy income have had to publish one annually since 2020, setting out what was received, spent, held and allocated. It is normally published in the autumn covering the previous financial year.
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.