A Section 106 Agreement can have a significant impact on how land is developed, occupied, sold or used. Although these agreements are designed to make development acceptable in planning terms, circumstances can change after the original permission has been granted. A financial contribution may no longer be justified, an affordable housing requirement may affect a scheme’s viability, or a particular restriction may no longer serve the purpose for which it was originally imposed.
For landowners and developers, this raises an important question: can a Section 106 Agreement be removed when it becomes unnecessary or creates difficulties for a development?
The answer is yes, in certain circumstances. The Town and Country Planning Act 1990 provides a formal process for modifying or discharging planning obligations. However, removal is not automatic. The applicant must follow the relevant legal procedure and demonstrate why the obligation should no longer remain in place.
This article explains the available options, the legal tests involved and the factors that may influence the outcome.
What Does a Section 106 Agreement Do?
A Section 106 Agreement is a legally binding planning obligation made under Section 106 of the Town and Country Planning Act 1990. It is generally entered into between a landowner or developer and the local planning authority to address the effects of a proposed development.
These obligations may require a developer to:
- Make financial contributions towards local infrastructure, such as roads, schools or public open spaces.
- Provide affordable housing as part of a residential development.
- Restrict the use or occupation of a property.
- Provide facilities or improvements connected with the development.
- Comply with specific requirements before a development can be occupied or completed.
Unlike ordinary planning conditions, Section 106 obligations can bind the land and may continue to affect subsequent owners. This means that selling a property or transferring ownership does not automatically bring the obligations to an end.
For a developer considering a sale, redevelopment or change in the use of a site, an existing agreement may therefore remain an important legal and commercial consideration.
When Can a Section 106 Agreement Be Removed?
There are two principal routes for removing or changing a Section 106 obligation under Section 106A of the Town and Country Planning Act 1990.
1. By Agreement with the Local Planning Authority
The first option is to negotiate directly with the authority responsible for enforcing the obligation.
A landowner or developer may request that the council agrees to discharge the entire obligation or modify specific provisions. This could involve removing an outdated restriction, reducing a financial contribution or changing the circumstances in which an obligation applies.
Where the authority agrees, the modification or discharge must be formally executed as a deed. An informal conversation or written indication from a planning officer is not sufficient to release the parties from a legally binding obligation.
This route can be particularly useful where the original purpose of the agreement has changed or both parties recognise that certain provisions are no longer appropriate.
2. By Making a Formal Application Under Section 106A
Where the local planning authority does not agree to voluntary changes, a landowner or another person against whom the obligation is enforceable may be able to submit a formal application under Section 106A.
However, the application route is subject to a qualifying period.
- For obligations entered into on or before 6 April 2010, an application can be made at any time.
- For obligations entered into after 6 April 2010, an application can generally be made after five years from the date the obligation was entered into.
The application can seek either full discharge or specific modifications. The authority must then consider the statutory tests rather than simply deciding whether it would prefer to retain the original agreement.
The Legal Tests for Removing a Section 106 Agreement
The age of an agreement does not automatically mean that it can be removed. The applicant must establish that one of the statutory grounds for modification or discharge applies.
Under Section 106A(6), the local planning authority may make one of three decisions.
The Obligation No Longer Serves a Useful Purpose
The authority may discharge an obligation if it no longer serves a useful planning purpose.
For example, a financial contribution may have been intended to fund a particular infrastructure improvement that has since been delivered or is no longer required. Similarly, a restriction may have become unnecessary because the circumstances that justified it have changed.
The applicant should provide evidence explaining why the original planning purpose has ceased to be relevant.
The Obligation Would Serve Its Purpose Equally Well if Modified
An agreement does not always need to be removed entirely. In some cases, changing specific provisions may be sufficient.
The authority can approve modifications where the obligation continues to serve a useful purpose but would serve that purpose equally well with the proposed changes.
For instance, a developer may seek to revise the timing of a financial contribution or amend a restriction that has become unnecessarily restrictive while preserving the original planning objective.
This option can be particularly relevant where the development remains acceptable in planning terms but the existing wording no longer reflects the practical circumstances of the site.
The Obligation Should Remain Unchanged
The authority can also decide that the existing agreement should continue without modification.
This may happen where the obligation still serves a useful purpose and the applicant has not demonstrated that the proposed changes would preserve that purpose equally well.
A request to remove an obligation simply because it increases development costs or affects profitability may therefore be insufficient on its own.
Common Reasons for Seeking to Remove or Modify a Section 106 Agreement
There are several circumstances in which reviewing an existing planning obligation may be commercially or legally worthwhile.
Changes in Development Viability
A development that was financially viable when planning permission was granted may become difficult to deliver because of increased construction costs, changes in market conditions or reduced development values.
A developer may therefore seek to renegotiate affordable housing requirements or financial contributions.
However, reduced viability does not automatically establish a right to discharge an obligation. The applicant will need to demonstrate how the proposed changes relate to the statutory tests and the planning purpose of the agreement.
Infrastructure Has Already Been Provided
Some agreements require financial contributions towards infrastructure or facilities intended to support the development.
If the relevant infrastructure has already been delivered, or the original purpose of the contribution has otherwise ceased to be relevant, there may be grounds to request discharge or modification.
The applicant should establish precisely what the contribution was intended to fund and provide evidence of the current position.
The Original Development Has Changed
A development may no longer proceed in the form originally anticipated. Changes in site ownership, project design, intended use or delivery arrangements may affect the relevance of certain obligations.
Where the existing agreement no longer reflects the development’s circumstances, a review may identify provisions that could be modified or discharged.
It is important to distinguish between changing the planning obligation and obtaining permission for a different development. Removing a Section 106 obligation does not, by itself, grant permission for a revised scheme.
Outdated or Unworkable Restrictions
Some obligations may become difficult to implement because of changes in the way a property is occupied, managed or used.
A restriction that once addressed a specific planning concern may no longer be necessary in its original form. Where the planning purpose can still be achieved through a less restrictive provision, an application to modify the agreement may be worth considering.
What Happens If the Council Refuses to Remove the Agreement?
A refusal by the local planning authority does not necessarily end the matter.
Under Section 106B of the Town and Country Planning Act 1990, an applicant can appeal to the Planning Inspectorate against a decision refusing to modify or discharge a planning obligation.
An appeal may also be available where the authority fails to determine the application within the relevant statutory period.
The appeal process provides an opportunity for an independent assessment of whether the authority has applied the correct legal tests and whether the requested modification or discharge is justified.
In preparing an appeal, it is important to address the reasons for refusal directly. This may involve providing further evidence about the obligation’s original purpose, the current circumstances of the development and why the proposed changes would be appropriate.
Appeal deadlines should be checked carefully. Under the statutory procedure, an appeal is generally required within six months of the relevant decision, or within the prescribed period where the authority has failed to determine the application.
What Evidence Is Needed to Support an Application?
A successful application depends on more than stating that an agreement is no longer convenient. The applicant should provide a clear explanation of the circumstances and evidence supporting the requested change.
Depending on the nature of the obligation, useful material may include:
- A copy of the original Section 106 Agreement and any subsequent deeds of variation.
- The original planning permission and relevant planning documents.
- Evidence showing whether the purpose of a financial contribution or restriction has already been fulfilled.
- Updated financial viability assessments, where viability is relevant.
- Evidence of changes to the development or site circumstances.
- A clear explanation of why the obligation no longer serves a useful purpose or how the proposed modification would preserve its purpose equally well.
The application should identify the specific clauses that need to be removed or amended. Where only certain provisions are problematic, seeking targeted modifications may be more appropriate than requesting discharge of the entire agreement.
Does Removing a Section 106 Agreement Automatically Change Planning Permission?
No. Discharging or modifying a Section 106 Agreement does not automatically amend the planning permission itself.
Planning permission and planning obligations are separate parts of the planning framework. A development may remain subject to planning conditions even after a Section 106 obligation has been removed.
Similarly, if a developer intends to change the approved design, use or scale of a development, a separate planning application or other appropriate consent may be required.
It is therefore important to review the planning permission, its conditions and the Section 106 Agreement together before deciding on the best course of action.
Important Considerations Before Applying to Remove a Section 106 Agreement
Before beginning the process, landowners and developers should consider several practical issues.
Review the wording carefully: Some agreements contain multiple obligations with different purposes, triggers and time limits. Removing one provision may not affect the others.
Check who is bound: Section 106 obligations can run with the land. The relevant parties and the authority responsible for enforcement should be identified before an application is prepared.
Consider the planning consequences: Removing an obligation may affect how the development addresses infrastructure, affordable housing or other planning requirements.
Review other legal commitments: A Section 106 Agreement may sit alongside a separate planning obligation, funding arrangement or deed. Removing one document may not automatically terminate related commitments.
Check statutory restrictions: Certain statutory requirements, including protections relating to biodiversity gain, can restrict the authority’s ability to modify or discharge an obligation in particular circumstances.
A careful review can help establish whether full discharge, partial modification or another planning route is more appropriate.
Can Charrette Law Help with Section 106 Agreement Issues?
An existing Section 106 Agreement can affect the value, development potential and future use of land. Where its terms no longer reflect the circumstances of a site, understanding the available legal routes is essential before taking further action.
Whether you are reviewing an older planning obligation, considering a modification or dealing with a refusal from the local planning authority, it is important to understand the statutory requirements and the potential planning consequences.
Charrette Law can be contacted to discuss your planning and property-related requirements and establish whether its services are suitable for your circumstances. Taking advice before submitting an application or proceeding with a development can help you assess the available options and avoid unnecessary complications.
Frequently Asked Questions
Can a Section 106 Agreement be removed completely?
Yes. A Section 106 Agreement can be discharged by agreement with the relevant authority or through a formal application under Section 106A, where the statutory requirements are met.
How long must a Section 106 Agreement be in place before it can be removed?
For agreements entered into after 6 April 2010, a formal application under Section 106A can generally be made after five years. Agreements entered into on or before 6 April 2010 can be the subject of an application at any time. Voluntary renegotiation with the authority may be possible earlier.
Can a developer remove a Section 106 Agreement without the council’s consent?
No. A developer cannot simply cancel a binding planning obligation. It must be discharged or modified through the statutory process or by agreement with the relevant authority, formally executed as a deed.
What is the difference between modifying and discharging a Section 106 Agreement?
Modification involves changing specific terms while retaining the remaining obligations. Discharge removes the relevant planning obligation entirely.
Can I appeal if the council refuses to remove a Section 106 Agreement?
Yes. Section 106B provides a right of appeal against a refusal to modify or discharge an obligation, subject to the applicable statutory procedure and deadlines.
Does a Section 106 Agreement expire automatically?
Not necessarily. Some obligations contain specific triggers or time limits, while others may continue for as long as the relevant development or use exists. The wording of the agreement must be examined to establish how long each obligation remains enforceable.
Can a Section 106 Agreement be changed if the development is no longer financially viable?
Potentially. Changes in viability may support an application to modify an agreement, particularly where the existing terms make the development difficult to deliver. However, financial difficulty alone does not guarantee that the authority will approve the proposed changes. The statutory tests must still be satisfied.
