Non-Adopted Roads

MenstrieBen

usually the developer will have had to lodge a bond with the authority for just this kind of eventuality.

you need to speak to the development control section of the council to find out the status of the road/development.



unfortunatley i know of cases where a developer has walked after realislising "loosing the bond" will cost them less than actually finishing the required work - this then leaves thecouncil to try and pick up the pieces without the funds to do it....

silvercar

Add an electric gate to the entrance to the road; market the house as on a private gated development and add £100,000 to the price:)

Premier_2

What I find so amazing is that according to the OP

"...Nobody's solicitor pointed out what an unadopted road meant ..."

How may solicitors are we talking about here, all who seem to have allegedly failed in their duties of care? :eek:

Or did all the purchasers use the same solicitor, probably recommended by the developer themselves? :rolleyes:

DottyThistle

The developers didn't creturn the section 38 form to the council with a bond, which is why there is no section 38 in place, and no money help us deal with this.

Sadly most of us used the same company of solicitors and yes you guessed correctly, they were recomended by the estate agent working for the developers. I'm learning a lot of very hard and very expensive lessons here.

Thank you all for your comments, they're much appreciated

DottyThistle

I've just found an old letter from my solicitor. After she did the searches in Nov '06, she sent me a letter saying the following:

"I am pleased to confirm that I have now received the result of you local authority search and this has not shown up any problem entries.
At present the roadway is not adopted by the local authority, nor has section 38 been entered into between the developer and the local authority. This is in the process of being completed, but the transfer deed contains a covenant by the developer to construct the same and indemnify you, until such time as it is adopted".

I asked her again almost a year later before I completed if the road had been adopted and she gave me the same reply verbally this time.

Has she been negligent or have I just been naive?

Does anyone know if there is an ombudsman I can go to and have this investigated? Or is there a certain disciplne of solicitor I should go and see.

silvercar

If you want to complain about the solicitor you start off by using the firms internal complaints procedure, every practice will have a partner responsible for this. If that fails you go to the Law Society, but you have to go through the internal procedure first.

Premier_2

DottyThistle wrote: »

..."I am pleased to confirm that I have now received the result of you local authority search and this has not shown up any problem entries.
At present the roadway is not adopted by the local authority, nor has section 38 been entered into between the developer and the local authority. This is in the process of being completed, but the transfer deed contains a covenant by the developer to construct the same and indemnify you, until such time as it is adopted"....

You need to go back to your solicitor, explain that the road has not been adopted to date, that the developer has now gone bust and that you now need details of the indemnity that you were promised by her was in place for just such eventuality.

If your solicitor can provide you with the details of that indemnity now, I don't think you have any claim against her (although I would have preferred if she provided you with them when you bought the property).

You can then call upon that indemnity policy to fund the necessary work to ensure the road is adopted.
If an indemnity policy exists, the value of your home will not be affected if you choose to sell up before the road is actually adopted.
Our road took about 7 years before the council adopted it and some people had sold up and moved on before then.

Richard_Webster

If your solicitor can provide you with the details of that indemnity now, I don't think you have any claim against her (although I would have preferred if she provided you with them when you bought the property).

You can then call upon that indemnity policy to fund the necessary work to ensure the road is adopted.
If an indemnity policy exists, the value of your home will not be affected if you choose to sell up before the road is actually adopted.

All the builder has done is covenant in the transfer to make up the road and indemnify the buyer against the cost of making it up if the buyer gets stuck with bill. There isn't an indemnity policy here. Indemnity covenant not worth anything because builder gone bust. Solicitor should have pointed out that, although at that time unlikely, if builder went bust then house owners could get stuck with cost of making up road.

Problem is that lenders used to be far too ready to proceed with mortgages on new houses where there was no section 38 agreement and bond. They used to keep back a retention which encouraged builders to get on and complete the section 38 agreement. They shouldn't have been so easy going on this, but then Northern Rock shouldn't have lent 120% and lenders generally shouldn't have believed builder's claims of the values of their new builds. By the way s106 is not necessarily to do with road agreements.

If the road was never intended to be adopted or is a country lane that is obviously not made up then this generally doesn't matter. It is only when the road looks like an adopted road and isn't intended to remain private, that lenders can be concerned.

Premier_2

If you're right Richard, that really is bad news to the OP.

However, why would the builder covenant to indemnify as well as covenant to get the road adopted? Surely with the covenant to get the road adopted, the covenant to indemnify is superfluous.
i.e. if the builder was still solvent, than action could be taken to force the builder to get the road adopted under the terms of the covenant.

I read it as that there existed a covenant for the builder to get the road adopted and that there also existed an indemnity of some kind should the builder not be able to comply with the covenant.

Either way, an average buyer is not expected to understand the nuances of such legalese and that is why they employ the services of an independent legal adviser whose duty is to explain to their client what actually exists and what potential risks their client could be exposing themselves to.

If the solicitor has failed to to that, she has failed in her duty of care to her client and damages could rightfully be sought against her.

DottyThistle

Hello again,

I spoke to the solicitor today and they confirmed Richard's comments about the indemnity. They said they no longer need to inform lenders either that there is no section 38 in place and that my mortgage lender (Nationwide) complains to them when they do.

If my solicitor had told me what all this meant and what might happen, I would have at the very least have requested a retainer, but most likely would not have proceded with the purchase. When she said there where no problem entries I believed her, and I thought I was fully covered for the road. I didn't know it meant only if the builder doesn't go bust. Surely she could and should have warned me about this.

When you buy off plan, you are even more dependant on your solicitor to advise you. It was clear that the developers were struggling, but because they had such a large deposit from me and because I thought I was safe, I stuck with it. She knew what they were like because she was representing so many of the residents. It makes her conduct even more dispicable. I believe she should have told her clients exactly what that wording meant.

The council never pushed to have section 38 put in place, and they didn't even enforce the advance payment code, which would have pushed the developer to do setion 38.

The developer has walked away from this because the 2 main institutions that could have stopped them - the council and the solicitors - chose not to.