What a section 106 can ask for.

The three tests for a section 106 obligation are set in regulation 122 of the Community Infrastructure Levy Regulations 2010; an obligation that fails any of them cannot lawfully be a reason for granting permission. They apply to the council when it asks and to an inspector deciding an appeal, who cannot rely on any obligation that fails them. In practice they test each line of the heads of terms. What impact of this scheme does the obligation answer? Is the amount sized to that impact rather than to a wider shortfall the scheme did not cause?

At appeal it lets the appellant offer the obligations the scheme needs, so the inspector can weigh them. The Planning Inspectorate expects it early: an executed, certified copy with a written representations appeal, or an agreed final draft 10 working days before a hearing or inquiry. Anything later is at the inspector's discretion. For applications made since 1 April 2026 it expects obligations with the application and takes one at appeal only in exceptional circumstances, with an explanation. A fixed contribution towards a protected habitat site is often given this way.

The five years run from the date the section 106 agreement was entered into. The test on an application is whether the obligation still serves a useful purpose. If it does not, it should be discharged; if it would serve that purpose equally well in a different form, it should be modified. Commercial difficulty is not, on its own, the test. Before five years, the only route is a new agreement, which needs the council to agree. A deed of variation is the usual instrument; it is often paired with a fresh planning application where the scheme itself is changing.

That is the point of the mechanism: the obligation runs with the land, not with the applicant, so a buyer inherits it. A well-drafted deed releases a person once they have parted with their interest. It also releases individual homeowners and their mortgagees from obligations aimed at the developer, which is what keeps the finished houses saleable. A buyer of land with a permission should read the deed alongside the decision notice, because the deed is where the cost of the permission is written.

Where a council charges the Community Infrastructure Levy, general infrastructure is funded through it; the section 106 is kept for affordable housing and for mitigation specific to the site. A scheme can pay both. Since 2019 a council can also use both towards the same piece of infrastructure. The levy is not negotiable in the same way, but it has exemptions and reliefs of its own, covered in the guide to the Community Infrastructure Levy.

A resolution to grant subject to a section 106 agreement is not a permission, however long it has stood; it can be revisited if policy changes while the deed is being drafted. National guidance says obligations should be negotiated within the statutory time limits or a longer period agreed in writing. It says a council is justified in refusing where an applicant causes deliberate delay and will not agree an extension. The way to avoid all of it is to treat the deed as part of the application: heads of terms agreed early, title checked and everyone with an interest in the land ready to sign.

It is set out in the Framework of August 2026 (policy HO8), which says any affordable housing due should be reduced in proportion to the gross floorspace of the vacant buildings. Because affordable housing is usually secured through the section 106, the credit reduces what the deed has to carry. It does not apply to buildings that have been abandoned, or to major development on land within or released from the Green Belt, which has its own golden rules. Whether a building counts as vacant rather than abandoned is the council's judgement on the evidence, which is worth assembling before the heads of terms are discussed.

Off-site delivery is accepted where it would optimise the quality or quantity of affordable homes built; a payment in lieu where it is justified on firm evidence and contributes to mixed and balanced communities (policy HO8). On small schemes, where a few affordable homes can be hard to place with a provider, a payment may be agreed, but it still has to be justified to that standard. Either way it is secured in the section 106. Where the council's plan sets a method for calculating it, it is worth agreeing that method early, because it drives the figure.