Planning Obligation - A Guide to Section 106 and Developer Contributions

3. Procedure for Completing Planning Obligations

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3.1 The procedure for completing planning obligations is set out below and in diagrammatic form in Appendix 2.

Pre Application Stage

(3) 3.2 Applicants are directed to the policies relevant to the proposal and to any relevant supplementary planning documents, including this SPD on planning obligations. Further information in relation to pre-application advice and Borough Council policies can be found on the Environment and Planning pages of Southend Borough Council’s website (www.southend.gov.uk). Having regard to the guidance contained in this SPD, applicants should come forward with proposals including any planning obligations (to be secured through a legal agreement or conditions) that are relevant and related to their development proposals. If a S106 agreement is considered necessary and appropriate, the Council will seek to agree draft Heads of Terms at pre-application stage so that these details can be submitted with a planning application, to provide greater clarity and speed up the planning application process. The Council will also seek confirmation from developers that they are satisfied that a Section 106 Agreement be drafted on the basis of the local authority’s model agreement (available on our website or from the Section 106 Monitoring Officer upon request). Highways implications, including any necessity for a Section 38 or Section 278 agreement under the Highways Act 1980 in relation to works to the public highway or adoption of estate roads should also be identified at this early stage to ensure timely completion of any such matters.

Application Submission Stage

3.3 In accordance with the Council’s local list requirements, planning applications that will require a Section 106 Agreement/Unilateral Undertaking must include the following on submission or they will be treated as invalid (unless exceptional circumstances dictate otherwise):

1. Proposed heads of terms (i.e. the main aspects) for a S106 agreement and agreement to the model S106 agreement, draft/completed Unilateral Undertaking, or a justification for non-compliance with the planning obligation requirements as detailed in this SPD and confirmed by planning officer at pre-application stage;
2. Proof of the owner’s title (including title plan). All the owners of the site will need to enter into the agreement. If the land is registered this will be by recent office copy entries (no more than 21 days old). If it is unregistered, an epitome of title should be provided;
3. Names and addresses of any chargees, lessees, mortgages or other holders of security on the land i.e. all parties with an interest in the land;
4. A solicitor’s undertaking to pay the Council’s reasonable legal costs in connection with the negotiation and preparation of a S106 Agreement/checking of a Unilateral Undertaking; and
5. Contact details of the solicitor acting on behalf of the applicant.

Application Appraisal Stage

(1) 3.4 Once the application is submitted, the negotiation on any potentially appropriate obligations will proceed at the same time as consideration of the planning application, and will include an assessment of whether or not planning conditions will suffice instead of an obligation. This process is without prejudice to the determination of the application by the Development Control Committee. Where there have been no pre-application discussions, the case officer will also direct the applicant to Southend Borough Council’s policies and supplementary planning documents, including this SPD on planning obligations.

3.5 Where the need for an agreement or undertaking has been identified, the applicant will be requested to progress matters as far as possible prior to a committee resolution. These negotiations are without prejudice to the final determination of the application by the relevant committee, but are an appropriate way to ensure timely decision-making in accordance with government targets.

3.6 The key element of the negotiation will be to confirm that the applicant agrees with the matters to be included in the S106 agreement. In conjunction with Southend Borough Council’s legal team, the planning case officer will manage the negotiation process and seek to agree the precise nature and scale of matters for inclusion as obligations, including when those obligations are triggered.

3.7 By the time the proposal is considered by the Development Control Committee the matters which are to be included in the obligations must be known and agreed with the applicant in detail. The obligations (including when those obligations are triggered) will be set out as part of the committee report and recommendation, which is a public document.

Committee and Post Committee

3.8 Any recommendation to delegate authority to grant planning permission will be made subject to the completion of a satisfactory legal agreement or undertaking within a specified time period, which is likely to relate directly to the government’s target period for determination of the application, and will authorise the Head of Legal and Democratic Services to complete the legal agreement or accept the undertaking. The committee will decide whether to approve the recommendation as set out in the report and whether the proposed obligations are appropriate.

3.9 A legal agreement or undertaking will normally be drafted prior to the committee resolution in the circumstances set out above, or, if this has not proved possible, immediately following the committee resolution. The draft obligation will be sent to the applicant's solicitor for comment and any negotiations will be progressed through each party's legal team. The reference number relating to the agreement or undertaking will correspond with the planning application reference number (e.g. SOS/09/00011/FULM) and this will be used on all correspondence and monitoring arrangements for the planning obligations.

3.10 Where it appears to Southend Borough Council that progress on the agreement is unnecessarily slow, the Council will actively chase progress. The Council is committed to meeting the Government’s targets for determination of planning applications. Therefore, if the 8/13/16 week statutory deadline is approaching with no likely prospect of completing the S106 Agreement it may be necessary to refer the application back to committee, or to an officer with delegated powers (if previously agreed by committee), who will then reconsider the original resolution and permission may be refused in the absence of planning obligations being secured. It may also be necessary to refer an application back to committee if, for example, circumstances have changed which would require the obligations themselves to be changed in some way.

3.11 At the earliest possible date and certainly prior to completion of the legal agreement, the Council’s legal services will ensure that all financial and title matters are in order. At the time the legal agreement is completed, the planning permission and any other consents will also be issued.

Post Completion of Legal Agreement or Undertaking

(1) 3.12 Southend Borough Council will register the agreement or undertaking and consents as local land charges and the applicant will be required to register the agreement as a charge against the title to the property at HM Land Registry in accordance with the terms of the agreement or undertaking. Southend Borough Council will also update the statutory registers.

Monitoring Planning Obligations

3.13 The S106 Monitoring Officer will hold a copy of the completed agreement, the details of which will be entered into an electronic monitoring database. The database will track compliance with each obligation in the agreement as the development proceeds and the agreement will be enforced as necessary. This system will be operated by the S106 Monitoring Officer whose responsibility it is to invoice developers when payments are due, monitor the allocation and oversee the expenditure of S106 funding, provide regular updates on obligations and improve the service delivery of the planning obligations process.

3.14 The terms of each agreement will require developers to notify the S106 Monitoring Officer in writing when it is intended to implement a planning permission (i.e. commence development). There may also be a requirement to send written notification at various stages throughout the development depending on when a planning obligation comes into effect (e.g. on first occupation or on completion). Invoices will be sent to developers when financial contributions are due. The S106 Monitoring Officer will also carry out periodic site visits to keep track of the stage that each development is at to ensure contributions are received in a timely manner and that all obligations are met.

3.15 On receipt of an invoice, payments in respect of financial contributions can be made on-line via the Council’s website, over the phone, at the Customer Service Centre or by sending a cheque (made payable to "Southend Borough Council" and marked for the attention of the S106 Monitoring Officer). When making a payment in respect of an invoice it is essential that the invoice number be quoted. If payments are made in advance of an invoice being received this should be by cheque only, which must be accompanied by a covering letter detailing the planning application reference number, the date of the legal agreement and details of the obligation to which the payment relates. Inflation, calculated in accordance with the provision within each agreement, will be added to the amount due on all invoices. If paying by advance cheque, please contact the S106 Monitoring Officer prior to making any payment to confirm any inflation payment due.

Additional Considerations for Completing an Obligation involving Highway Works

3.16 Planning obligations involving highways works may also require the completion of a Section 38 or Section 278 agreement under the Highways Act 1980.

3.17 The Council has powers under the Section 38 of the Highways Act 1980 to enter into agreements with developers or other persons to adopt highways, namely new estate roads, for future public maintenance provided they are constructed to the Council’s specification. The Councils specification is designed so that future maintenance costs are kept to a minimum. The adoption of a highway relieves the developer from their liability to maintain that highway. Fees are paid in advance according to the size of the development to cover the Council’s costs in preparing the agreement and inspecting the work during construction. A Bond is also deposited to cover the cost of bringing the road up to an adoptable standard should the developer become insolvent or is unable to meet their obligation.  Developers should ensure that when entering into Section 38 Agreements they have complete undisputed title to the land on which the estate roads are to be built. You will need to give us the approved details of all necessary easements before we sign the agreement.

3.18 Prior to entering into a Section 38 agreement you will also need to prove a right to discharge surface water from the highway to an existing sewer, a proposed sewer or a water course. We will require proof that your drainage proposals have been approved by the relevant authorities. If the highway water discharges into sewers containing roof or yard water (or both), the relevant water company must approve the proposals and they must be included in a Section 104 agreement of the Water Industry Act 1991. We will not sign a Section 38 agreement before you have received a ‘letter of intent’ from the water authority that the drainage proposals are suitable for including in a Section 104 agreement. We will adopt only drains laid for the sole purpose of discharging surface water from the highway. However, you must also get consent from the Environment Agency or the water company for its discharge and we will require proof of this before entering into a Section 38 agreement. We must approve proposals for highway drainage, including calculations of surface water run-off. Highway drainage will then be included within the terms of the Section 38 agreement for future adoption.

3.19 Alterations to existing public highway are undertaken under Section 278 of the Highways Act 1980 and where development requires works to be carried out on the existing highway, you will need to complete a Section 278 agreement with us. Section 278(1) of the Act (as amended by the New Roads and Street Works Act 1991) states:

"A highway authority may, if they are satisfied it will be of benefit to the public, enter into an agreement with any person -

1. for the execution by the authority of any works which the authority are or may be authorised to execute, or
2. for the execution by the authority of such works incorporating particular modifications, additions or features, or at a particular time or in a particular manner, on terms that that person pays the whole or such part of the cost of the works as may be specified or determined in accordance with the agreement."

3.20 Highway matters must be discussed at an early stage in the planning application process to agree the extent and scope of any necessary works, the timing of those works (even where a planning obligation is not involved) and who should carry them out (either the applicant's contractor or the Council’s contractors). During the initial discussions, some information on the background to the development will be required and the applicant should provide the highways officers with detailed plans and a specification of the proposed works. The drafting of any Section 38 or 278 agreements, based upon the local planning authority’s standard format should commence at the same stage as a Section 106 agreement to ensure timely completion. Contact our Highways team on 01702 215003 at an early stage for further advice.