Section 106 or S106 agreements are made by deed under Section 106 of the Town & Country Planning Act 1990 and are similar to covenants. They relate to a persons land and bind whoever owns it. The obligation becomes a land charge.
They ensure that developers contribute towards the infrastructure that is required to make a development acceptable in planning terms. The obligations are subject to three tests set out in Regulation 122 and 123 of the Community Infrastructure Levy Regulations 2010 (as amended), which dictate that a planning obligation may only constitute a reason for granting planning permission for the development if the obligation is—
(a) necessary to make the development acceptable in planning terms;
(b) directly related to the development; and
(c) fairly and reasonably related in scale and kind to the development.
Section 106 obligations are not required for infrastructure that is proposed to be funded through the Community Infrastructure Levy (CIL) , but they are usually required to secure affordable housing and other site specific infrastructure needed to make a development acceptable in planning terms.