Heads of Terms for S106 Agreement

Heads of Terms for s106 Agreement: A Comprehensive Guide

If you`re looking to develop a new property site, then you`ve likely come across s106 agreements. These agreements are a crucial tool used by local authorities to ensure that new developments make a positive contribution to the local area. They can include provisions for things like affordable housing, green spaces, and infrastructure improvements.

But before a s106 agreement can be settled, you`ll need to negotiate what`s known as the “Heads of Terms.” This document outlines the basic details of the agreement and acts as a framework for future negotiations. In this article, we`ll outline what you need to know about Heads of Terms for s106 agreements.

What are Heads of Terms?

Heads of Terms are essentially a pre-contractual agreement that sets out the key terms and conditions of the s106 agreement. They`re used to define the scope of the agreement, outline the responsibilities of each party, and clarify the time frame for completion. This document is typically drafted by the developer, and then negotiated with the local authority.

What should be included in Heads of Terms for s106 agreements?

While the exact contents of the Heads of Terms will depend on the specific circumstances of your development, there are a few key elements that are typically included:

1. The parties to the agreement: This should include the names and addresses of both the developer and the local authority.

2. The purpose of the agreement: This should explain the reason for the s106 agreement, and give an overview of the proposed development.

3. The obligations of the developer: This should include a list of the requirements that the developer will need to meet in order to satisfy the terms of the agreement. This might include things like providing affordable housing, contributing to infrastructure improvements, and creating green spaces.

4. The obligations of the local authority: This should outline the responsibilities of the local authority in relation to the agreement. This might include things like reviewing and approving plans, monitoring progress, and enforcing the terms of the agreement.

5. Deadlines and time frames: This should set out the key milestones that need to be hit, and when they need to be completed by.

6. Payment terms: This should outline how any financial contributions will be made, and when they will be due.

7. Dispute resolution: This should outline how any disputes that arise during the course of the agreement will be resolved.

Why are Heads of Terms important?

Heads of Terms are important because they establish the key terms of the s106 agreement before it`s finalised. This means that both the developer and the local authority have a clear understanding of what they`re committing to, and can negotiate any points of disagreement before the agreement is signed.

Heads of Terms are also important because they can help to speed up the negotiation process. By having a clear framework in place, both parties can focus on the details of the agreement, rather than getting bogged down in broader issues.


Negotiating a s106 agreement can be a complex process, but by putting together a comprehensive Heads of Terms document, you can ensure that you have a solid foundation to work from. Remember to be clear and specific about what you`re willing to commit to, and to negotiate in good faith with the local authority. If you do this, you`ll be well on your way to securing a successful development project.