Unilateral undertaking or bilateral agreement: cost compared
A unilateral undertaking is signed by the landowner alone and cuts out a negotiation cycle. Where councils accept one, where they insist on an agreement, and how the costs compare.
On a scheme of two or three houses, the planning obligation often costs more to put in place than the contribution it secures. A unilateral undertaking is the less expensive route on paper, because only your side signs and only your solicitor drafts. The catch is that an undertaking can impose obligations on you and nobody else, so the moment the council wants a covenant of its own, a repayment trigger or a shared mechanism, you are back to a bilateral agreement and paying for two sets of lawyers.
Decide which route you are on before the case officer drafts heads of terms, because switching later wastes the fee you have already paid.
What a unilateral undertaking is
Section 106 of the Town and Country Planning Act 1990 allows a planning obligation to be entered into by agreement, or "otherwise by any person interested in land". That second limb is the unilateral undertaking: a deed executed by the landowner alone, binding the land and enforceable by the local planning authority without the authority being a party.
The statutory content requirements are the same whichever route you take. The instrument must be executed as a deed, state that it is a planning obligation for the purposes of section 106, identify the land and the interest held, and name the authority by whom it is enforceable. It binds successors in title and is registered as a local land charge.
What an undertaking cannot do is bind the council. No obligation on the authority to spend the money within a period, no refund clause if the permission is not implemented, no agreement to release land, no dispute resolution procedure that involves them.
Where it is accepted and where it is not
Councils accept undertakings readily for single, simple, one-way obligations. A financial contribution payable before occupation. A restriction on occupation to a named class of person. A covenant not to use a building for a particular purpose. A nomination of affordable units where the tenure and transfer terms are already fixed by policy.
They resist undertakings where the obligation is a mechanism rather than a payment. Affordable housing with staged transfers and registered provider approval, viability review clauses, phased triggers tied to road adoption, or anything involving money going back the other way all tend to be refused as drafting an authority's own duties into a deed it has not signed.
Some authorities publish a standard form undertaking for common cases, which costs least of all because the drafting is already agreed. Ask the officer for it by name at the heads of terms stage.
The legal cost difference between the two routes
The cost of a planning obligation sits in four places.
Your own solicitor's drafting and title work. The council's legal costs, which the applicant is normally required to pay under the agreement itself. Engrossment, title investigation and any mortgagee or lender consents. And the council's monitoring fee, which authorities have been able to charge since the 2019 amendment to the Community Infrastructure Levy Regulations where the fee is proportionate and reasonably related to monitoring the specific obligations.
A unilateral undertaking removes the second of those almost entirely and reduces the first, because there is no negotiation cycle. On a bilateral agreement the negotiation is the cost: three or four rounds of mark-up between two firms, each round billed by both.
Against that, an undertaking has to be drafted conservatively, which means it usually gives away more than a negotiated agreement would. You pay less in fees and accept a tighter obligation. On a contribution of a few thousand pounds that trade is almost always worth making. On an affordable housing obligation across 30 units it is not.
Councils publish their legal fee scales and monitoring fee policies, so get both figures from the published schedule before you choose the route rather than estimating them.
Council undertakings and their fees
Where an authority does accept an undertaking, it will still review the draft, and most charge for that review. That is a smaller sum than drafting a full agreement, and it is normally payable whether or not the permission is granted.
Two practical points. The council will usually require the undertaking to be executed and dated before the decision notice is issued, so the title work has to be finished while the application is still live. And the officer will want the draft early enough to consult the legal team, which on a committee item means two or three weeks before the meeting.
Leave it to the week of committee and the item gets deferred. That is the single most common cause of delay on small schemes carrying an obligation.
Using an undertaking at appeal
At appeal the undertaking comes into its own, because the Inspector cannot require the council to execute an agreement and the council has no incentive to help an appellant.
The Planning Inspectorate expects a completed obligation, not a draft, by the stated deadline in the appeal timetable. An undertaking signed and dated by the appellant and any other party with an interest satisfies that, and it can be drafted to take effect only if the appeal succeeds.
Make sure the undertaking addresses the statutory tests in regulation 122 of the Community Infrastructure Levy Regulations 2010 on its face: necessary to make the development acceptable in planning terms, directly related to the development, and fairly and reasonably related in scale and kind. Inspectors give obligations no weight where those tests are not evidenced, and an unnecessary obligation offered to buy goodwill is worse than none.
Where a scheme has been refused on viability-linked grounds, the undertaking and the appraisal have to tell the same story, which is covered in the piece on budgeting a viability assessment and its review mechanism.
Risks of drafting one unilaterally
The structural risk is that an undertaking is a one-way deed and you cannot easily undo it. If the permission is never implemented the obligation usually falls away because the triggers never arise, but a badly drafted deed can create a standalone payment obligation that survives.
Four drafting points that cause trouble:
- Define the trigger by reference to implementation of the specific permission, with its reference number, rather than to any development of the land
- Include a provision for release or expiry if the permission lapses unimplemented
- Check whether a lender's consent is needed, because an obligation binding the land affects security
- Where there are joint owners or a long leaseholder, every interest capable of binding the land has to execute, or the undertaking is only partly effective
The other risk is that the council simply says the undertaking is unacceptable and asks for an agreement, after you have paid for the drafting. Confirm acceptability in writing at the heads of terms stage, naming the obligations you intend to cover.
Deciding on a small scheme
For one to nine units with a single financial contribution or a simple occupancy restriction, the undertaking route is usually right. For anything with an Affordable Housing Statement behind it and a registered provider in the transaction, start from the assumption that the council will want an agreement.
A useful middle course exists. Ask the authority whether the obligation can be dealt with by condition instead. Conditions carry no legal fees at all, and where a requirement can be expressed as something the developer must do before occupation, rather than as money or land, a condition is often the proportionate answer.
The honest uncertainty here is timing. Authorities vary widely in how quickly their legal teams turn round a draft, and that variation matters more to a small scheme's programme than the fee difference between the two routes.
See PlanScope pricing if you are costing the application documents alongside the legal work, or enter your postcode on PlanScope to check which reports the scheme 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
What is a unilateral undertaking under section 106?
It is a planning obligation executed as a deed by the landowner alone, using the limb of section 106 that allows an obligation to be entered into by any person interested in land. The local planning authority can enforce it without being a party. It binds successors in title and is registered as a local land charge.
Why will a council refuse to accept an undertaking?
Because an undertaking cannot impose duties on the authority. Where the obligation needs council covenants, a repayment or clawback clause, staged transfers to a registered provider, or a dispute resolution procedure, the deed has to be bilateral. Simple one-way obligations such as a contribution payable before occupation are usually accepted.
Is an undertaking the right route at appeal?
Generally yes. An Inspector cannot compel a council to execute an agreement, and the Planning Inspectorate expects a completed obligation rather than a draft by the timetable deadline. An undertaking can be drafted to take effect only if the appeal is allowed, so nothing binds the land if the appeal fails.
Who pays the council's legal costs?
The applicant, in almost all cases. A bilateral agreement normally requires the developer to pay the authority's legal costs of drafting and completion, and many councils also charge a review fee on a unilateral undertaking. Authorities publish both scales, along with their monitoring fee policy, so take the figures from the published schedule.
Can a condition replace a planning obligation?
Sometimes. Where the requirement is something the developer must do, such as providing parking or a bin store before occupation, a condition can achieve it with no legal fees. Money and land transfers generally cannot be secured by condition, which is why financial contributions still need a deed.
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.