Section 106 Agreement (Basic) Precedent

RBKC Template for affordable housing
Section 106 Agreement

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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U:\TCLLSP\Secretarial
\New Precedent documents\s106 proposed amendments - rev1.doc
PC100404 - Document4

NOW THIS DEED WITNESSES AS FOLLOWS:1.
INTERPRETATION
1.1.
In this Deed the following words and expressions shall unless the context otherwise
requires 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
"Development"
] on [the Plan]
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:
AxB=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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(RPIX) published by the Office for National Statistics every month

Scheme Development Standards means the criteria set by the Housing Corporation applied to
the physical standards of developments by Registered Social
Landlords which are funded by the Housing Corporation
Shared Ownership
means ownership under the terms of a lease of a unit of

Affordable Housing granted for a term of not less than 99
years at an initial premium of less than 100% of the whole
value of the lease and providing for the tenant to acquire
additional shares in the unit of Affordable Housing in terms
specified in the lease provided that the share to be first
disposed of in relation to a Shared Ownership Unit shall not be
greater than 25%.
Shared Ownership Units
means the [
] units of Affordable Housing as described in
Schedule 2 which are to be provided by way of Shared

Ownership on the Contribution Land
Social Housing Grant Funding means funding provided by the Housing Corporation to enable
the provision of the Affordable Housing Units
Total Cost Indicators
means the Total Cost Indicators, Grant Values, Value Limits

and Discount Amounts, Rent Cap and Administration
Allowances (including all supplementary multipliers) last
published by the Housing Corporation for self-contained
accommodation in the cost group designated to the Council for
the relevant period
1.2.
Words in this Deed importing the singular meaning shall where the context so admits
include the plural meaning and vice versa
1.3.
Words in this Deed of the masculine gender shall include the feminine and neuter
genders and vice versa and words denoting natural persons shall include corporations
and vice versa
1.4.
References in this Deed to any statutes or statutory instruments shall include and refer to
any statute or statutory instrument amending consolidating or replacing them
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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.
3.3.
The Council covenants as set out in Schedule [ ] [delete if not applicable]
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
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4.2.
The Owner hereby warrants that the Affordable Housing Units can be constructed on

the Contribution Land in full compliance with the Scheme Development Standards
applicable at the date of execution of this Deed
4.3.
The Mortgagee hereby consents to the completion of this Deed and acknowledges that
from the date of the Agreement the Land shall be bound by the restrictions and
obligations contained herein PROVIDED THAT the Mortgagee shall not be liable in
respect of any breach of the terms of this Deed unless and until he takes possession of
the Land or otherwise exercises any contractual or statutory power in relation thereto
5.
NOTICE PROVISIONS
5.1.
The Owner shall give the Executive Director not less than ten (10) working days prior
written notice of Implementation of the Planning Permission
5.2.
The Owner shall give the Executive Director immediate written notice of any change in
ownership of any of the interests in the Land and such notice shall give details of the
transferees or lessees full name and registered office (if a company or usual address if
not) [if necessary]
5.3.
The Owner shall give the Executive Director written notice of the Owner entering into a
binding agreement to transfer the Contribution Land to the Registered Social Landlord
in accordance with this Deed and shall supply him with a copy of the said transfer
within twenty-one (21) days of the said transfer
5.4.
Any notice required under this Deed shall be in writing and shall be addressed to the
Executive Director at the Town Hall Hornton Street London W8 7NX and delivered to
him personally or by recorded delivery post
6.
INTEREST
6.1.
Where any sum or amount which the Owner is obliged to pay to the Council pursuant to
the obligations set out in this Deed is not paid on the date on which it is due and remains
unpaid for a period exceeding thirty (30) days then (but without prejudice to any other
right of the Council) interest thereon at the interest rate of three percent (3%) per annum
above the Lloyds TSB Bank plc bank rate shall be paid on demand by the Owner to the
Council from the date on which the payment (or part thereof) became due to the date of
actual receipt by the Council in addition to the outstanding balance of the payment
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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
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The Owner hereby covenants with the Council as follows:PC100404 - Document4

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 a
Registered 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
10
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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]
Not to Implement the Planning Permission [or] Not to Occupy or permit the Occupation
1.4
of [%] 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 Registered
Social 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
SERVICE CHARGES
2.
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.
3.1
GARAGES
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 LAND
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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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)
)
)
13
CHELSEA was hereunto affixed

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

Director
Secretary
Signed as a Deed
by the said
)
)
)
Director
Secretary
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14
DATED
2006
THE MAYOR AND BURGESSES OF

THE ROYAL BOROUGH OF
KENSINGTON AND CHELSEA
-and-
-and-
______________________________________
DEED
Made pursuant to Section 106 of
the Town and Country Planning
Act 1990 (as amended by the
Planning and Compensation Act 1991)
Re: Land at [insert address]
______________________________________
Gifty Edila
Director of Law and Administration
The Royal Borough of Kensington and Chelsea
The Town Hall
Hornton Street
London
W8 7NX
My Ref: [insert reference]
Tel: 020 7361 [ext no.]

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RBKC Template for affordable housing