If you`re considering buying a house in the UK, you may have heard of a 106 agreement and wondered if it will have any impact on your purchase. In this article, we`ll explore what a 106 agreement is, and whether it affects your ability to buy a house.
What is a 106 Agreement?
Section 106 (S106) of the Town and Country Planning Act 1990 allows local planning authorities in the UK to enter into legally binding agreements with developers. These agreements, also known as « planning obligations, » are a way of mitigating any negative impacts that development may have on the local community.
The terms of a 106 agreement can vary widely depending on the project and the needs of the community. Some common provisions include requirements for the developer to provide affordable housing, contribute to local infrastructure projects, or create public spaces.
Can I Buy a House with a 106 Agreement?
In short, yes – you can buy a house with a 106 agreement. However, it`s important to be aware of how the agreement may affect your purchase and your future plans for the property.
For example, if the 106 agreement includes a requirement for the developer to provide affordable housing, that may limit your ability to make changes to the property or rent it out at market rates. You may also be subject to certain income and residency requirements in order to qualify for the affordable housing.
Additionally, if the 106 agreement requires the developer to contribute to local infrastructure projects, you may be subject to additional costs for things like road improvements or new utilities.
It`s also worth noting that a 106 agreement is a legally binding document, and failure to comply with its terms can result in financial penalties or even legal action. So if you`re considering buying a property subject to a 106 agreement, it`s important to review the terms of the agreement carefully and seek professional advice if necessary.
Conclusion
In summary, a 106 agreement is a legally binding agreement between a developer and a local planning authority that aims to mitigate the negative impacts of development on the local community. While you can still buy a property subject to a 106 agreement, it`s important to be aware of how the agreement may affect your purchase and your future plans for the property. As always, it`s a good idea to seek professional advice if you`re unsure about any aspect of the buying process.
