Section 75 agreement for planning permission

In order to obtain planning permission, a planning authority may require developers to enter into a contract to offset adverse impacts of their project. Such a contract contains provisions designed to overcome obstacles to the grant of consent and is typically concluded before a planning permission is formally issued.

In Scotland, they are most commonly (though not exclusively) made under Section 75 of the Town and Country Planning (Scotland) Act 1997. Section 75  agreements are broadly equivalent to “Section 106 agreements” in England and Wales. 

Section 75 agreements are used where conditions attached to the planning permission itself are not appropriate. While planning conditions control how a project is built and used, Section 75 agreements tend to provide for financial contributions and any requirements affecting land outside the area to which the planning permission relates (outside the “redline boundary”).   

For example, a developer seeking consent to build a large housing estate might be required to enter into a Section 75 agreement covering:

• provision of affordable housing (so that a proportion of the houses delivered is made available by the developer for occupation at below market value) or payment in lieu of providing affordable housing (so the planning authority can build affordable housing elsewhere) and
• transport improvements (so the developer pays for and/or installs new bus stops or pedestrian crossings to service the residents of the new houses being built)

Section 75 agreements affect:

• developers, for whom Section 75 agreements can unlock the grant of consent for proposals which might otherwise not comply with local policy
• planning authorities and decision-makers, which can use Section 75 agreements to secure policy objectives and regulate development.
• investors, mortgagees, landlords and future owners of the land (Section 75 agreements can involve large sums of money and last for many years - they are normally registered on the title of the land and can potentially be enforced against successive owners and occupiers, despite them not being party to the original agreement. Statutory provisions could even impose continuing liability on parties after they sell their interest in the affected land)
• local communities, which stand to benefit from transport and infrastructure improvements, employment opportunities, affordable housing and other investments through a Section 75 agreement.