Unilateral Undertaking and S106 Agreement

Unilateral Undertaking and S106 Agreement

Unilateral Undertaking and s106 Agreement: A Comprehensive Guide

As a property developer, you may be familiar with the terms «unilateral undertaking» and «s106 agreement.» These legal agreements have become an important tool for local authorities to manage the impact of new developments on their communities. Understanding these agreements is essential to ensuring a smooth and successful development process. In this article, we will explain the details of unilateral undertakings and s106 agreements, including their key differences, what they cover, and how to negotiate them successfully.

What is a Unilateral Undertaking?

A unilateral undertaking is a legally binding agreement between a developer and a local authority. It outlines the developer`s commitments to mitigate the impact of their development on the local community. A unilateral undertaking can cover a range of issues, including:

– Affordable housing provision

– Contributions to local infrastructure and services

– The provision of green spaces or community facilities

– Traffic management measures

– Contributions to education and healthcare facilities

Once agreed, a unilateral undertaking becomes a legal obligation on the developer. Failure to comply with the agreement can result in legal action or fines.

What is an s106 Agreement?

A section 106 (s106) agreement is a type of unilateral undertaking that is specific to the planning process. It outlines the contributions that a developer must make to the local community in exchange for planning permission. The s106 agreement can cover the same issues as a unilateral undertaking, but it must be directly related to the impact of the development on the community. The contributions made under an s106 agreement are typically paid in cash and are intended to offset the costs of the development on the local area.

Key Differences between Unilateral Undertakings and s106 Agreements

While there is a lot of overlap between the two agreements, there are some key differences you should be aware of:

– A unilateral undertaking can cover any issue that the developer and local authority agree on, whereas an s106 agreement must be directly related to the impact of the development on the local community.

– A unilateral undertaking can be entered into before or after the planning permission is granted, while an s106 agreement must be entered into before planning permission is granted.

– A unilateral undertaking can be enforced by the local authority through the courts, whereas an s106 agreement can also be enforced through the planning process.

How to Negotiate a Unilateral Undertaking or s106 Agreement

Negotiating a unilateral undertaking or s106 agreement can be a tricky process, but there are some steps you can take to ensure a successful outcome:

1. Understand the local authority`s requirements: Before entering into negotiations, make sure you are clear on what the local authority expects from you. This may include contributions to affordable housing, education or healthcare facilities, or traffic management measures.

2. Consider your position: Think carefully about what you can realistically offer in terms of contributions. Be realistic about the costs involved and what you can afford, and make sure you factor in these costs when assessing the viability of your development.

3. Seek advice: Speak to experienced professionals, such as planning consultants or lawyers, who can advise you on the legal and financial implications of the agreement.

4. Be willing to compromise: Negotiations are likely to involve some give and take. Be prepared to compromise on some issues in order to reach an agreement that is acceptable to all parties.

5. Get it in writing: Once an agreement has been reached, make sure it is documented in writing and that you understand the terms. This will help to avoid misunderstandings or disputes down the line.

Conclusion

Unilateral undertakings and s106 agreements are an important part of the planning process for property developers. Understanding the differences between the two agreements and how to negotiate them successfully is crucial to ensuring a smooth and successful development process. By following these guidelines and seeking professional advice where necessary, developers can navigate the planning process with confidence and avoid costly mistakes.

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