The Design and Build Contractor, the Planning Permission and the Section 106 Agreement…

“To carry out the Building Works in accordance with the terms of this Agreement, the Specification, the Drawings, the Planning Permission and the Section 106 Agreement…”  So runs the start of many a clause setting out a design and build contractor’s obligations.

The first three items are easy enough to recognise, even though they may not be that easy to accommodate, but what about the planning permission and section 106 agreement?

Planning permissions are familiar enough and, as the name suggests, permission is needed before development can take place. The section 106 agreement (which relates to infrastructure and community requirements) having undergone various transformations, now sits within the Town and Country Planning Act 1990 and is usually required for any significant development.

The planning permission and the section 106 agreement have a symbiotic relationship – sometimes the mechanism of conditions will not adequately control and regulate the proposed development, and resort has to be had to the law of contract, underpinned in this case by statute. Bring in now the design and build contractor who has to take on board the design and development control parameters – with his single point of responsibility under his contract he cannot ignore the planning permission and the section 106 agreement, since these two documents will underpin the basis of any development.   

There are many ways in which the design and build contractor will be involved with a section 106 agreement and planning permission. Perhaps he is the developer and possibly a party to the 106 agreement, in which case he may have had a hand in the negotiations. Or, the development proposal might have been brought to him with the s106 agreement and planning permission already in place. It may be a turnkey project, or a “golden brick” development, or an agreement for lease, or simply (!) arising under amendments to a standard form of building contract. But neither can be ignored – enforcement is a real and present danger.

So what might the contractor be faced with?

1. financial requirements  - contributions to highway infrastructure, education, open space, libraries
2. Offsite works – to mitigate the impact of the development
3. pre-implementation conditions – . remediation works, flood risk assessments, landscaping   
4. pre-occupation conditions -  usually linked to payment of contributions but can relate to completion of social housing, or sports or other  facilities,
5. social housing provision – integrated  proportions, as to mix and tenure

and so the list goes on ….phasing development, design standards, walking bus routes, travel plans, sustainability issues, eco-homes and so on.

And there the contractor stands, like the conductor of some splendid  orchestra, reading the score, keeping time, bringing in the various sections to the design and build contract  - architect, engineer, building services engineer,  sustainable homes assessor, designing  sub-contractors , all the while  making sure that each shares his responsibility in complying with the section 106  agreement  and planning permission  (not forgetting of course the need for collateral warranties by and for those involved in the contractual matrix), until the finale, when practical completion is achieved, the conditions to the planning permission are discharged, compliance is confirmed, and…. finally, the contract is put away.