Section 106 Agreement and Cil
S106 contributions remain the most important way to ensure that developments pay for the infrastructure that supports them. However, the S106 agreements are inherently uncertain of what they can provide. S106 contributions are negotiated between the local authority and the developer and can pay for everything from new schools or clinics to roads and affordable housing. The legal criteria for knowing when you can use an s106 agreement are set out in Rules 122 and 123 of the Community Infrastructure Charge Regulations, 2010, as amended. The S106 agreements aim to solve problems that may represent new developments for local infrastructure. The agreement varies depending on the nature of a development, but generally addresses issues such as: These new application and appeal procedures do not replace existing powers to renegotiate agreements under Article 106 on a voluntary basis. In addition, with respect to affordable housing, this provision does not replace provisions amending an obligation in the 1992 Regulations and updated by the 2013 Regulations (see above). We have highlighted only a few of the points on which further clarification is needed. Given the importance of deliverable infrastructure for development development and in particular for the provision of much-needed affordable housing, the planning and development community will look forward to the Government`s response to the ongoing consultations. However, it should be noted that the CIL and the nascent planning gain supplement that preceded it were announced as a replacement for the Section 106 agreements. If these new proposals are put forward and the introduction of the new IL resembles the introduction of the CIL more than 10 years ago, we will probably see S106 agreements for some time to come. The CIL is now the preferred method of collecting pooled contributions to finance infrastructure. The S106 agreements have been reduced to cover only site- and site-specific issues (whether or not the local authority has introduced a CIL) and have been subject to legal testing since 2014.
CILs cover generic payments that a development requires. It should be noted that site-specific issues, such as viability verification mechanisms with respect to the provision of affordable housing, must be considered on a case-by-case basis and are therefore not listed in our section 106 agreement. Other relevant terms are developed and, where appropriate, applied. We will not ask for S106 agreements for anything in the infrastructure list of CIL Regulation 123. Section 106 funds must be spent in accordance with the terms and conditions set out in the legal agreement. Usually, this is related to a specific development for a specific purpose and the local area. The Government in response to its consultations on measures to expedite negotiations and the Article 106 agreement; and on contributions to affordable housing and student residences made significant changes to the Planning Policy Guidelines (PPG), in particular Section S106, but also to related areas, including the Sustainability Guidelines. The White Paper does not address the proposed amendments to sections 38 or 278 of the Motorways Act 1980, which are regularly used to ensure the introduction of new country roads and the work carried out by developers on the existing road, as well as commuting amounts for their maintenance. At present, these mechanisms for securing this type of site-specific infrastructure will remain the same.
Community Infrastructure Tax (ITC) money does not have to be used to provide infrastructure on the site from which it is collected. The relationship between a site`s infrastructure requirements and the amount of contributions paid is therefore interrupted, although any infrastructure directly required as a result of development continues to be sought under section 106, as is the provision of affordable housing. The planning obligation is a formal document, an act stipulating that it is an obligation for planning purposes, identifying the property in question, the person who concludes the commitment and his interests, as well as the competent local authority that would enforce the obligation. The obligation may be a single commitment or a multi-party agreement. When new developments take place, developers are usually asked to pay a contribution to finance the associated infrastructure Historically, this has been done through “Section 106″ agreements negotiated between local authorities and developers, although the Planning Act of 2008 introduced a new way of doing this – the Community Infrastructure Tax, or CIL. S106 contributions remain the most important means for districts, ensuring that developments pay for the infrastructure that supports them. However, only 7% of developments involve an S106 deal, and the deals are inherently uncertain of what they can provide. The content of an S106 agreement is agreed during the consultation period of the construction application and the agreement is prepared by Counsel for the Council. Small developments have the option of entering into a unilateral commitment instead of a full S106 agreement.
Section 106 appropriations received by the Council shall be spent in accordance with the terms of the relevant legal agreement. Details of § 106`s income and expenses can be found in the S106 financial reports, which can be downloaded from this page. DCLG has published a guidance document in support of the amendments to the Growth and Infrastructure Act, 2013, which provides more detailed information on what is needed to modify and assess the provision of affordable housing under section 106. These are guidelines on the format of the application, complaint and evidence; in particular, what proof of cost-effectiveness is required and how it should be assessed. While this proposal is likely to be supported by developers who might be able to reduce their overall IL liability and have fewer ongoing obligations regarding the website that we would normally see in the S106 agreements, it is unclear how this will work in practice. Section 106 agreements are currently used to ensure the provision of on-site affordable housing, but under the new proposals, affordable housing will be provided through the IA. The proposals stipulate that registered suppliers (PR) will be able to purchase affordable housing from developers at a discount to the market price. The difference between the price sold to the PR and the market price will be deducted from the FINAL liability of the IL to the local planning authority. .