What about economic viability?

In such cases, and where the development is needed to meet the aims of the development plan, the council will decide what is to be the balance of contributions made by developers and by the public sector infrastructure providers (e.g. Kent County Council) in the area.

Where the development is needed to meet the aims of the development plan, the decision on the level of contributions will be based on negotiation with developers over the level of contribution that can be demonstrated as reasonable whilst still allowing development to take place.

In some instances, factual information needs to be validated for negotiations to continue. In these cases a developer may wish to agree and fund an independent third party with relevant expertise (e.g. valuation) to help progress the negotiation. Responsibility for the final determination of the application remains with Thanet District Council.

How to submit a legal agreement

Attention is drawn to the statutory requirement that all those who have an interest in land must enter into the planning obligation

Type of Contribution

Contributions may either be in kind or in the form of a financial contribution. In the case of financial contributions, these will be payable to Thanet District Council. Payments can be made in the form of a lump sum or an endowment, or, if beneficial to all parties and not unduly complex, as phased payments over a period of time, related to defined dates, events and triggers.

Monitoring

Obligations and/or financial contributions will be monitored to ensure that they are being undertaken or paid at the agreed trigger points. The negotiation and expenditure of any contributions received as a result of development will be monitored and recorded in a public and accountable way, recorded in a planning obligation monitoring database.

Payback Clause

A clause should be included within the legal agreement to ensure that contributions are paid back if they have not been spent within five years from the date of payment.

Land Charges

Applicants are reminded that agreements and undertakings under s.106 of the Town and Country Planning Act 1990 have to be registered as land charges. They will therefore have to establish title to the site and third parties such as mortgages may have to be made party to the agreement.

Index Linking Contributions

Contributions will be index-linked in the legal agreement, as the commencement of development may not take place immediately after an agreement has been reached.

The retail price index is the most commonly used index of inflation, however alternative indices may be applied where appropriate, such as the all in tender price. Contributions will be index-linked between the date of the legal agreement and the date that the (first) payment is made.

Legal fees

The developer will be required to pay the council’s legal costs in connection with the preparation and execution of an agreement or where such an agreement needs subsequently to be modified. An undertaking will be required from the applicant to pay the council’s reasonable legal costs, whether or not the agreement is completed.

A straightforward agreement may cost around £400 to prepare and execute, whereas a more complex agreement with a number of clauses and schedules may cost up to £700.

Model Legal Agreement

A planning obligation can be enacted under section 106 of the 1990 Town and Country Planning Act and can be a unilateral undertaking or an agreement between two or more parties, depending on the circumstances. It is a private legally binding agreement negotiated between the council and persons with an interest in the land.

Standard model agreements are available from the council offices. There will be specific circumstances that will require particular changes to the agreement. Any difficult clauses or terms in the standard document should be raised with the council.