Unilateral Undertaking - an alternative to a Section 106 Agreement

Commercial property and land developers are increasingly seeking faster and more cost‑effective ways to navigate the planning process. Kevin Danez, Experienced Property Lawyer at TMT Legal Services, explains that Unilateral Undertakings can, in the right circumstances, provide a practical alternative to a traditional Section 106 Agreement. In this article, Kevin highlights the importance of understanding how each mechanism operates and when it is most appropriate to use them. This knowledge helps ensure that developments progress smoothly while meeting planning obligations in a proportionate and compliant manner.

What Is a Section 106 Agreement?

During the planning process, a Council and a developer may enter into a legal agreement that sets out how the developer will provide, or fund, necessary infrastructure, services, or other measures to mitigate the impact of a development. These obligations can relate to works carried out either on or off the development site.

This type of agreement is known as a Section 106 Agreement or Planning Obligation.

What Is a Unilateral Undertaking?

A Unilateral Undertaking is a legal deed in which a developer commits to fulfilling certain planning obligations. It serves a similar purpose to a Section 106 Agreement, but with one key difference: the Council does not need to be a party to it.

The undertaking automatically takes effect once the associated planning permission is granted.

Why Choose a Unilateral Undertaking?

A Unilateral Undertaking can offer several advantages, including:

• Faster processing – Standard templates reduce or eliminate the need for protracted negotiations with the Council.

• Lower costs – Fewer negotiations usually mean lower planning permission and administrative fees.

• More efficient planning – Submitting the undertaking alongside the planning application can help streamline both the planning approval process and any subsequent site disposal.

When Is a Unilateral Undertaking Appropriate?

Applicants are encouraged to use a Unilateral Undertaking when:

• Required financial contributions are known in advance; and

• The planning obligations are simple and straightforward.

In these cases, the undertaking can be submitted with the initial planning application documents, helping to avoid delays.

Will a Unilateral Undertaking Require Payments?

Yes. A Unilateral Undertaking requires the developer to pay the specified financial contributions associated with the development.

When Do Financial Contributions Become Payable?

Under the Council’s standard templates:

• 50% of the contribution is due upon commencement of development, and

• The remaining 50% is due within 365 days or upon first occupation, whichever is earlier.

If you are considering or currently working on a development project and want to understand whether a Unilateral Undertaking or a Section 106 Agreement is the right approach, TMT Legal Services can help. Our experienced property lawyers provide clear, practical guidance tailored to your specific circumstances. Contact us today to discuss your development plans and ensure you secure the most efficient and compliant route through the planning process.