As with any contract, it is important that you speak to your lawyer as quickly as possible to navigate the process if you are asked to enter into a Section 75 agreement as part of your planning application. Your lawyer is in the strongest position to negotiate more favorable terms to the agreement, terms that will be less painful for future owners of the property, which will facilitate the sale of the property in the future, or tastier commitments for your lender, so that your mortgage will not have to be repaid before the start of development. “Planning agreements play a limited but useful role in the development management process, where they can be used to overcome barriers to building permits. An agreement may mean that development can be authorized or improved, while potentially negative effects on land use, the environment and infrastructure can be reduced, eliminated or offset. When entering into a Section 75 agreement, the financial obligations imposed on the landowner can be a costly surprise if they are not taken into account when filing the development application. It is also important that the agreement be linked to the country in accordance with Section 75, so that the conclusion of such an agreement will have significant consequences. We conduct due diligence, including advice to funders and land buyers in the event of a potential liability risk in the event of an existing Section 75 agreement. We also help minimize planning risks by negotiating specific guarantees and compensations and organizing distribution interviews on behalf of our clients. It is in Scotland that they are produced most often (but not exclusively) under Section 75 of the Town and Country Planning (Scotland) Act 1997. The Section 75 agreements are broadly in line with the “Section 106 agreements” in England and Wales. For example, a developer applying for permission to build a large subdivision could be required to enter into an S75 contract that has a mortgage on the land, the lender must give its consent before the contract is entered into in accordance with Section 75.
A landlord must ensure that the Section 75 contract is not contrary to the terms of the mortgage and, in certain circumstances, the lender may require that the mortgage be paid. After the conclusion, a section 75 contract is registered against landowner ownership. The Section 75 agreement is only discharged if the financial contribution is paid or the planning obligation is met. The agreement may restrict land use and/or regulate field activities to be developed.