Let’s be honest: navigating the UK planning system can often feel like interpreting a foreign language. Just as a development proposal gains momentum, a legal hurdle appears in the form of a Section 106 agreement or, in some cases, a unilateral undertaking. But what exactly are these documents? Why are they necessary? Who drafts them, and why can they become the planning process’s most complex and consequential element?
This piece examines the structure, intent, and strategic value of planning obligations under Section 106 of the Town and Country Planning Act 1990. It explores how these agreements operate in practice, what they typically contain, and how experienced legal and planning teams such as Charrette Law and Studio Charrette help ensure they are not simply bureaucratic burdens but vital instruments of sustainable development.
Why Do Planning Obligations Exist?
Before diving into the mechanics, it is worth asking why planning obligations exist in the first place. When a developer applies for planning permission, the local planning authority (LPA) considers more than just the layout and design of the proposed development. It must also assess the impact that development will have on the wider community.
Will it increase traffic congestion? Will it place strain on local schools or healthcare facilities? Might it harm biodiversity or erode green space?
If the answer to any of these is yes, then planning permission will often be granted subject to certain obligations. These obligations, known as planning obligations or “Section 106 agreements,” are designed to ensure that developments contribute to infrastructure, services, and amenities that are required as a direct result of the development. They are legally binding commitments attached to the land itself and enforceable in both financial and physical terms.
What Is a Section 106 Agreement?
A Section 106 agreement is a formal legal contract entered into between the applicant (usually the developer), the local authority, and, where necessary, other parties with an interest in the land. It operates in parallel with the planning permission and is specifically drafted to secure obligations that cannot be dealt with through planning conditions alone.
But why not simply use conditions? Conditions can regulate development, but they cannot secure financial contributions or require land transfers. Section 106 fills this gap.
The agreement might include financial contributions towards local infrastructure, requirements to build a certain percentage of affordable housing, or obligations to provide and maintain green spaces. These obligations are not arbitrary; they must meet the legal tests of necessity, relevance, and proportionality set out in national planning policy.
A Section 106 agreement is particularly significant because it “runs with the land.” In other words, it binds future owners as well as the original developer. This ensures that the secured benefits are delivered, even if the site is sold before development.
What Is a Unilateral Undertaking?
In some cases, the applicant might offer a commitment voluntarily, without needing a fully negotiated agreement with the local authority. This is known as a unilateral undertaking. But when is this more straightforward approach appropriate?
A unilateral undertaking is often used for straightforward obligations—typically financial contributions—that do not require the council to perform reciprocal actions. For example, if a developer agrees to pay a fixed sum towards a school or bus stop improvement, they may offer a unilateral undertaking as part of their application.
While this route can reduce negotiation time and streamline the planning process, it has limitations. It cannot be used to secure obligations that require the local authority to take on responsibility for land or to deliver works. Nor can it be used where multiple landowners or complex trigger mechanisms are involved. In such cases, a complete Section 106 agreement is still required.
What Do These Documents Typically Contain?
Now, you may wonder: What exactly goes into a Section 106 agreement or unilateral undertaking?
There is no one-size-fits-all answer. These are bespoke legal documents tailored to each scheme. However, they commonly include:
- Affordable housing obligations, either through on-site delivery or financial contributions
- Payments towards local transport infrastructure, healthcare, education, or leisure facilities
- Requirements to deliver public open space, play areas, or ecological enhancements
- Restrictions on development phasing, occupancy types, or access arrangements
- Trigger points that dictate when obligations must be discharged—for example, before commencement or occupation of a certain number of units
The agreement’s structure and content must be aligned with the development programme, the landholding position, and the scheme’s financial viability. That is where things can start to get complex.
Why Is Drafting So Complex?
You might think that once planning permission is secured, the rest is administrative. In reality, drafting and negotiating a Section 106 agreement can be one of the most challenging and time-consuming parts of the planning process.
Why is that?
Firstly, precision is everything. The agreement must be legally enforceable, future- proofed, and crystal clear. Ambiguity over trigger points, contribution levels, or land ownership can result in costly delays or prevent permission from being issued.
Secondly, land ownership and title issues can complicate matters. If multiple owners, tenants, mortgagees, or third-party interests exist in the land, each one may need to be a party to the agreement. That creates a web of consent and coordination that must be legally resolved before anything else can proceed.
Thirdly, viability plays a central role. The obligations must be deliverable within the scheme’s financial realities. This is not just about developer profit; it is about whether the scheme remains fundable, buildable, and saleable after obligations are factored in. This often involves a viability appraisal, negotiation with the council, and sometimes an independent assessment.
Lastly, the agreement must be drafted with future modification in mind. What if the economy shifts? What if the scheme is delivered in phases over 10 years? Well-crafted agreements include review mechanisms, indexation clauses, and pathways to vary or discharge obligations under Sections 106A and 106B of the 1990 Act.
What Role Do Charrette Law and Studio Charrette Play?
This is where specialist support becomes vital. Charrette Law and Studio Charrette are two firms that work together to guide developers through this process with legal acumen and planning foresight.
Charrette Law brings the legal expertise to draft enforceable, clear, and pragmatic Section 106 agreements. Their understanding of land law, planning legislation, and local policy allows them to confidently negotiate, structure complex contracts, and safeguard their clients against risk. Whether navigating multi-party land ownership or aligning financial obligations with construction timelines, their input can be the difference between stalled progress and successful delivery.
Studio Charrette complements this with strategic planning and design. Their team identifies early triggers for Section 106, builds evidence to support or challenge proposed obligations, and works across ecology, transport, and housing disciplines to create holistic feasibility appraisals. By engaging Studio Charrette early, developers avoid surprises later and can plan obligations into the financial and physical structure of the scheme.
Together, they create a joined-up process that ensures obligations are deliverable, defensible, and aligned with long-term development strategy.
Are There Risks to Getting It Wrong?
Absolutely. Poorly drafted agreements delay planning decisions, and unclear obligations risk enforcement action. Overburdened schemes can become unviable. Failure to include proper legal triggers, definitions, or review mechanisms can expose the developer to litigation or financial strain.
However, treating Section 106 obligations as a checkbox exercise rather than a strategic tool is the most significant risk. When planned properly, they can enhance a scheme’s chances of success by demonstrating local benefit, unlocking community support, and aligning with policy priorities.
Final Thoughts: More Than Just Legal Paperwork
So, where does this leave us?
Section 106 agreements and unilateral undertakings are not peripheral to development. They are at the heart of how modern planning works in the UK. They embody the balance between private ambition and public interest.
If handled carelessly, they can cause frustration and delay. However, if handled strategically, they can create certainty, unlock delivery, and strengthen the relationship between developers and councils.
With the support of legal experts like Charrette Law and planning specialists like Studio Charrette, that balance becomes not just possible, but powerful.
