section 106 agreement (basic) precedent

8/10/2019 Section 106 Agreement (Basic) Precedent

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RBKC Template for affordable housingSection 106 Agreement

PC100404 - Document4 1

THIS DEED is made the day of Two Thousand and

BETWEEN

(1) THE MAYOR AND BURGESSES OF THE ROYAL BOROUGH OF KENSINGTON

AND CHELSEA of the Town Hall Hornton Street London W8 7NX ("the Council)

(2) [OWNER] whose registered office is [insert address] ("the Owner")

(3) [MORTGAGEE] whose registered office is [insert address] ("the Mortgagee")

(4) [RSL] whose registered office is [insert address] (the RSL)

WHEREAS

A. The Council is the local planning authority for the administrative area of the Royal

Borough of Kensington and Chelsea for the purposes of the Town and Country Planning

Act 1990 as amended by the Planning and Compensation Act 1991 ("the Act")

B. The Owner is registered at HM Land Registry with freehold title absolute in respect of

the Land

C. The Planning Application was made to the Council

D. The Council resolved at a meeting of its Planning Services Committee on [insert date] to

grant planning permission in respect of the Development following completion of an

agreement for the purpose of making acceptable arrangements for the carrying out of the

Development (this Deed)

E.

The Mortgagee has the benefit of a charge dated [insert date] granted by the Owner

F. The RSL [insert details of interest in Land]

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NOW THIS DEED WITNESSES AS FOLLOWS:-

1. INTERPRETATION

1.1.

In this Deed the following words and expressions shall unless the context otherwiserequires have the following meanings:-

WORDS AND EXPRESSIONS MEANINGS

Affordable Housing means residential social housing provided by a Registered

Social Landlord to meet the objectives of a Registered Social

Landlord and the local housing need of the Council

Affordable Housing Units means the [ ] units of Affordable Housing as described in

Schedule 2 which are to be provided for rent by way of assured

tenancies on the Contribution Land

Contribution Land [If affordable housing is on-site delete if not applicable]

means the freehold title absolute to or a lease of not less than

125 years of the part of the Land on which the Affordable

Housing Units and/or Shared Ownership Units are to be

constructed

[If affordable housing is off-site delete if not applicable]means the freehold title absolute to the land at [insert address]

which is registered [with other land] at HM Land Registry

under Title Number [ ] and for identification purposes only is

shown [hatched ] on [the Plan]

"Development" means the development referred to in the Planning Application

and described in Schedule 1

"Executive Director" means the Executive Director for Planning and Conservation

and shall be deemed to mean the officer for the Council from

time to time holding that appointment or (if no officer holds

that appointment) carrying out the duties of that appointment

Garages means the [ ] garage spaces to be provided on the Land as

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part of the Development and shown marked [ ] on the Plan

[delete if not applicable]

Housing Corporation means the body corporate charged under the Housing Act 1996

with the functions of regulating the provision of Affordable

Housing within the Borough by any Registered Social

Landlord or if such body ceases to exist or is superseded the

equivalent body

"Implementation" means the carrying out of any act pursuant to the Planning

Permission which constitutes a material operation within the

meaning of Section 56 of the Act and material operations shall

be construed as being carried out at the earliest date on which

any material operation is begun and Implement and

Implemented shall be construed accordingly

"Index Linked" means the recalculation of any payment specified in this Deed

by applying the following formula:

A x B = D

C

Where:

A = the payment specified in this Deed in pounds sterling

B = the figure shown in the RPIX for the period last published

prior to the date of the payment to made under this Deed

C = the figure shown in the RPIX for the period immediately

prior to the date of this Deed

D = the recalculation sum in pounds sterling payable under this

Deed or if the RPIX shall cease to be compiled or the formula

shall otherwise be incapable of operation then such other

equivalent means as shall be proposed by the Owner to

recalculate such payment with the intent that it shall have like

effect and be approved by the Council [delete if not

applicable]

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"Land" means the land at [insert address] which is registered [with

other land] at HM Land Registry under Title Number [ ] and

for identification purposes only is shown [hatched black] on

the Plan and in the event that the Contribution Land does not

form part of the land first described in this definition it shall

also include the Contribution Land

Market Housing means any Residential Unit forming part of the Development

which is not an Affordable Housing Unit

Occupation means occupation for the purposes permitted by the Planning

Permission but does not include occupation by personnel

engaged in construction, fitting out or decoration or occupation

for marketing or display or occupation in relation to security

operations and Occupy and Occupied shall be construed

accordingly

"Plan" means the Plan annexed hereto

"Planning Application" means the application for planning permission made under the

Council's reference number [ ]

"Planning Permission" means the planning permission which may be granted pursuant

to the Planning Application

Registered Social Landlord means an organisation registered by the Housing Corporation

in accordance with the Housing Act 1996 or if such bodies

cease to exist or are superseded the equivalent body whose

objectives include the provision of Affordable Housing

Residential Unit means a unit of residential accommodation (whether house or

flat or otherwise and whether Affordable Housing Unit, Shared

Ownership Unit or Market Housing) constructed as part of the

Development and Residential Units shall be construed

accordingly

RPIX has the definition afforded from time to time by the Office for

National Statistics and for the avoidance of doubt is the figure shown

as the Retail Prices Index Excluding Mortgage Interest Payments

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respectively from time to time and for the time being in force

1.5. Covenants made hereunder if made by more than one person are made jointly and

severally

2. LEGAL EFFECT

2.1. This Deed is made pursuant to Section 106 of the Town and Country Planning Act 1990

as amended Section 111 of the Local Government Act 1972 [Section 2 of the Local

Government Act 2000] and all other powers so enabling

2.2. This Deed contains planning obligations made pursuant to the said section 106 which

are enforceable by the Council and which binds each and every part of the Land

2.3. The terms of this Deed come into effect on the date of this Deed other than clauses

3.1(a) and 3.2 which will come into effect upon the grant of the Planning Permission

2.4. Nothing contained or implied in this Deed shall prejudice or affect the rights, powers,

duties and obligations of the Council in the exercise of their functions as Local Planning

Authority and their rights, powers, duties and obligations under all public and private

statutes, byelaws and regulations may be as fully and effectually exercised as if the

Council were not a party to this Deed

2.5. If any provision in this Deed shall be held to be invalid, illegal or unenforceable the

validity, legality and enforceability of the remaining provisions shall not in any way be

deemed thereby to be affected or impaired

2.6. No waiver (whether express or implied) by the Council of any breach or default in

performing or observing any of the covenants, terms or conditions of this Deed shall

constitute a continuing waiver and no such waiver shall prevent the Council from

enforcing any of the said terms or conditions or from acting upon any subsequent breach

or default

2.7. Nothing in this Deed shall be construed as a grant of planning permission

2.8. The covenants herein shall be enforceable without any limit of time against the Owner

and any successors in title and assigns of the Owner or any person claiming title

thorough or under the Owner to the Land or any part thereof as if that person had also

been an original covenanting party in respect of the interest or estate for the time being

held by that person PROVIDED THAT no person shall be liable for any breach of the

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covenants restrictions or obligations contained in this Deed occurring after he has parted

with the whole of his interest in the Land or the part in respect of which such breach

occurs

2.9. In accordance with the provisions of the Contracts (Rights of Third Parties) Act 1999 it

is hereby declared that none of the terms of this Deed shall in the absence of any

express provision to the contrary be construed as being enforceable by any third party

3. THE OWNER'S [AND COUNCILS] COVENANTS

3.1. The Owner hereby covenants with the Council as follows:-

(a) to observe and perform and cause to be observed and performed the undertakings

covenants and restrictions contained in Schedule 3; and

(b) to pay on the execution hereof the Council's costs incurred in the preparation and

settlement of this Deed

3.2. The Council covenants as set out in Schedule [ ] [delete if not applicable]

3.3 . Where the Council receives any sum or amount pursuant to the obligations set out in this

Deed the Council shall:

(a) hold such sums or amounts separately and interest will accrue at the average

monthly seven day Lloyds TSB Bank plc bank rate;

(b) apply or expend such sums or amounts wholly and exclusively for the purposes

respectively for which the same were paid as specified in this Deed; and

(c) repay to the person who made any payment in accordance with Schedule 3 of this

Deed any such sums or amounts remaining unexpended upon the expiration of ten

(10) years from the date of payment together with any interest accrued thereon

4. FURTHER TERMS

4.1. The covenants in this Deed shall be treated and registered as local land charges for the

purposes of the Local Land Charges Act 1975

4.2. The Owner hereby warrants that the Affordable Housing Units can be constructed on

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7. PERPETUITIES AND ACCUMULATIONS ACT

7.1. For the purposes of the Perpetuities and Accumulations Act 1964 the perpetuity period

applicable to the Deed shall be 80 years from the date hereof and whenever this Deed

provides that any person is granted or shall be granted a future interest in the Land there

shall be deemed to be included in respect of such grant a provision requiring that such

interest shall vest within the said perpetuity period and for such future interest to be

void for remoteness if it shall not have so vested [delete if not applicable]

SCHEDULE 1

DESCRIPTION OF THE DEVELOPMENT

[Description]

RBK&C Drawing Nos: [ ]

Applicants Drawing Nos: [ ]

SCHEDULE 2

DESCRIPTION OF THE AFFORDABLE HOUSING UNITS

Affordable Housing Units

[Detail of units, by reference to a detailed plan if possible]

Shared Ownership Units

[Detail of units, by reference to a detailed plan if possible]

SCHEDULE 3

OWNERS COVENANTS

The Owner hereby covenants with the Council as follows:-

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1. AFFORDABLE HOUSING

1.1. To construct or procure the construction of the Affordable Housing Units and/or Shared

Ownership Units

1.2. Not to Occupy nor permit the Occupation of the Affordable Housing Units and/or

Shared Ownership Units other than as Affordable Housing by a tenant or tenants of aRegistered Social Landlord

1.3. That the Affordable Housing Units and/or Shared Ownership Units shall be built in full

compliance with the Scheme Development Standards applicable at the time that the

development of the Land is approved for the purposes of Social Housing Grant Funding

[if the developer is to construct the units]

1.4. Not to Occupy or permit the Occupation of [ %] of the [Business Unit/Market

Housing/Etc] until:

(a) the Affordable Housing Units and/or Shared Ownership Units are constructed and

ready for Occupation as Affordable Housing by a tenant or tenants of a Registered

Social Landlord;

(b) it has entered into a binding agreement to transfer the Contribution Land to a

Registered Social Landlord on the terms set out in Schedule 4;

(c) the Owner has served notice on the Executive Director advising that the

Affordable Housing Units and/or Shared Ownership Units are ready for

Occupation in accordance with sub-paragraph 1.4(a) and may be inspected at any

time between 9am and 5pm Monday to Friday during the 10 working days

following receipt of the notice or such other time as may be agreed with the

Council;

(d) the Affordable Housing Units and/or Shared Ownership Units have been

inspected on behalf of the Council during the period set out in sub-paragraph

1.4(c) or at such other time as agreed in accordance with that sub-paragraph; and

(e) the Executive Director has confirmed in writing to the Owner that the Affordable

Housing Units and/or Shared Ownership Units have been constructed and are

ready for Occupation in accordance with the covenants contained in this Deed

PROVIDED THAT this sub-clause shall be deemed to have been complied with

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if no written communication has been received from the Executive Director within

[20] working days of the date on which the Affordable Housing Units and/or

Shared Ownership Units were inspected

[or if the RSL is to construct the units]

1.4 Not to Implement the Planning Permission [or] Not to Occupy or permit the Occupationof [%] of the [Business Unit/Market Housing/Etc] until:

(a) it has entered into a binding agreement to transfer the Contribution Land to a

Registered Social Landlord on the terms set out in Schedule 4; and

(b) the Registered Social Landlord to whom the Contribution Land is to be transferred

has confirmed to the Executive Director in writing that the Affordable Housing

Units and/or Shared Ownership Units can be constructed in accordance with the

covenants set out in this Deed

1.5 The covenants contained in this Deed shall not be binding;-

(a) In respect of any part of the Land where an occupant of an Affordable

Housing Unit and/or Shared Ownership Unit has exercised a statutory right to

acquire the whole of the freehold or of a leasehold estate under the Housing Act

1996 and in this event this Deed shall thereupon determine and be of no further

effect in relation to such part of the Land only

(b) Subject to paragraph 1.6 of this Schedule on the mortgagee of a RegisteredSocial Landlord who seeks to dispose of the Land or any part thereof (as to such

part) pursuant to its power of sale exercised pursuant to default of the terms of the

mortgage or any receiver appointed by such mortgagee or person deriving title under

them

1.6 In the event that a mortgagee of a Registered Social Landlord or any receiver

appointed by such mortgagee seeks to dispose of the Contribution Land or any part

thereof (as to such part) pursuant to its power of sale exercised pursuant to default of

the terms of the mortgage such person shall first use reasonable endeavours to sell

the Contribution Land to another Registered Social Landlord PROVIDED THAT if

after a period of three months (having used all reasonable endeavours as aforesaid)

such person shall not have sold the Contribution Land or relevant part thereof to

another Registered Social Landlord the mortgagee of the Registered Social Landlord

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or such receiver shall henceforth be under no obligation to sell the Contribution Land

or relevant part thereof to a Registered Social Landlord and shall be entitled to

exercise its powers of sale or make a disposition as the case may be free of any

restrictions under this Deed which shall thereupon determine and be of no further

effect

2. SERVICE CHARGES

2.1. That the service charges payable by any tenant of a Registered Social Landlord in

respect of any of the Affordable Housing (the Service Charge) ;-

(a) shall only be levied on the items set out in Schedule 5 subject to any

additional services that may be provided following consultation and agreement between

the Registered Social Landlord and its tenants and approval in writing from the Council

(such agreement and approval in each case not to be unreasonably withheld or delayed);

and

(b) the amount of the Service Charge shall not be more than the actual cost of the

services provided

2.2. To notify the Council of any level or levels at which the Service Charge for any of the

Affordable Housing is set within three weeks of the level of any Service Charge being

set or altered and to provide to the Council within three weeks of any request by the

Council such other details as may be reasonably requested by the Council as to the

process undertaken and the matters taken into account in setting the Service Charge

3. GARAGES

3.1 That the Garages shall not be used except for car parking by tenants of the Development

and they shall be provided to such occupants free of any extra rent charge or fee (but

providing that the occupants may be required to pay any reasonable service charge) [delete

if not applicable]

SCHEDULE 4

CONTRACTUAL TERMS FOR THE TRANSFER OF THE CONTRIBUTION LANDDocument1



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The contract to transfer/agreement to lease the Contribution Land to the Registered Social Landlord

must include the following terms:

(1) That the Contribution Land be transferred/leased at a price that enables the Registered

Social Landlord to complete and provide the Affordable Housing Units and/or Shared

Ownership Units as Affordable Housing to a tenant or tenants of the Registered Social

Landlord at a total price to the Registered Social Landlord that is equal to 80% of the Total

Cost Indicators (which for the avoidance of doubt include the reasonable on-costs actually

incurred by the Registered Social Landlord) applicable to the Affordable Housing Units at

[preferably] the date of this agreement [or as follows] the time that the development of the

Land is approved for the purposes of Social Housing Grant Funding

(2) That the transfer/lease of the Contribution Land be free from encumbrances save any

existing encumbrances and such rights reservations and covenants as are necessary to enable

the Owner to develop the Land in accordance with the Planning Permission and shall grant

to the Registered Social Landlord such rights and covenants as are necessary to enable it to

complete (and provide) the Affordable Housing Units and Shared Ownership Units

(3) That the Owner shall not require the Registered Social Landlord to meet any of the Owners

legal or other conveyancing costs

(4) That the Affordable Housing Units and/or Shared Ownership Units will be built in full

compliance with the Scheme Development Standards applicable at the time that the

development of the Land is approved for the purposes of Social Housing Grant Funding

(5) That a certified copy of the completed contract/agreement for the lease relating to the

Contribution Land shall be sent to the Executive Director within 7 days of it being entered

into

SCHEDULE 5

SERVICE CHARGES

IN WITNESS of which this Deed has been executed on the first date before written

THE COMMON SEAL of the MAYOR )AND BURGESSES OF THE ROYAL )BOROUGH of KENSINGTON AND )

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CHELSEA was hereunto affixed )in the presence of:- )

Signed as a Deed )

by the said )in the presence of:- )

Director

Secretary

Signed as a Deed )by the said )in the presence of:- )

Director

Secretary

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DATED 2006

THE MAYOR AND BURGESSES OFTHE ROYAL BOROUGH OF

KENSINGTON AND CHELSEA

-and-

-and-

______________________________________

DEED

Made pursuant to Section 106 ofthe Town and Country Planning

Act 1990 (as amended by thePlanning and Compensation Act 1991)

Re: Land at [insert address]

______________________________________

Gifty EdilaDirector of Law and AdministrationThe Royal Borough of Kensington and ChelseaThe Town HallHornton StreetLondonW8 7NX

My Ref: [insert reference]Tel: 020 7361 [ext no.]

section 106 agreement (basic) precedent

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