Unadopted road - repossessed new development

andie_303

Hi all

I've scoured the forums and seen lots of threads on this matter but none seem to indicate a conclusion so I'm not sure how successful (or not) they were.

I'm in the very late stages of buying a property it is a "new" development of just 15 houses (other phases may well be built as there is planning for 130) I say "new" as it was actually built in 2006 but the builder went bust before finishing. RBS repossessed them and have just finished them. The building regs completion and energy certificates as well as the 10 year new home warranty all started in August 2012.

The last sticking point holding up the sale is lack of S.38 which means the council has yet to adopt the road. As its a new development (the road was completed by RBS's developers not the original ones that went bust) I believe this is entirely normal and as long as its up to standard the council will adopt (at some point). As a side point Severn Trent have adopted the sewers underneath.

The problem is RBS have written in their contract that the transferee (I.e me) will be liable for road maintanence until it is adopted. Our solicitor has tried (and failed) to have them remove this clause. They have indicated in writing through their solicitor that "we understand that the road surface itself is almost complete to an adoptable standard. The S.38 agreement has been agreed in principal and it has been submitted to the local authority for completion." And "We confirm that the S.38 agreement is presently being negotiated, we anticipate that this will be finalised shortly"

Should we accept their written ascertains that its going through or not?

Our solicitor has had to refer the lack of s.38 to our lender would this likely affect our mortgage?

We are massively time bound as our buyers are threatening to pull out if they do not get a concrete exchange/completion date by tomorrow

jonahinoz

Hi,

Can you insure against it not being adopted before repairs are required?

What does the Planning Permission say about occupation before road is adopted? I understand that companies used to liquidate just before they had to construct a road, so Planners adopted a hard attitude ....but that was forty years ago.

JW

andie_303

Hi

There is nothing in the planning permission letter about the road prior to occupation and I cannot find any form of insurance available to cover this situation

Furts

Hi andie_303
My thoughts are your solicitor should know more about procedures than me! Does the following help?

The original developer should have taken out a "bond" (that is an "insurance"policy) lodged with the council. If he went bust, leaving unfinished works, the council could call in this bond to fund works. This either by their own labour or via tenders and the appointment of a contractor. Hence the risk element is here and not with you.

If the estate was not regulated and no bond was placed...that is a problem!

Did RBS call in this bond to finance works?

If Severn Trent have adopted the drainage this means it has been pressure jetted and CCTV and any remedial work done (By RBS). But it is vital you have all this in writing. And it is not all positive - Severn Trent will not have adopted the road gullies and all drainage connections from them - that is RBS (or your!) responsibility. If there is a surface water outfall or headwall, or pumping station, or flow control etc, make sure you know exactly where you (Or RBS!) stand. This may be excluded from the adoption or subject to manufacturers guarantees etc. Again this should be checked out!

This is all before I talk about the road - which is another matter

You may detect a theme here - I think RBS are being shrewd and perhaps looking for innocent purchasers.

Let me know if this helps

andie_303

It was the RBS developer that did the road in this case - the homes were repossessed before completion by the original developer. No bond has been paid by RBS although they tell me (in writing) that the council have agreed in principle to adopt the road our solicitor has asked for written proof of this.

This is the wording used by RBS's solicitor "The S.38 agreement has been agreed in principal and it has been submitted to the local authority for completion."

andie_303

The searches confirm that sewers and drains have been adopted so we have at least one thing in writing

Furts

But Severn Trent do not adopt all the drains...what about the excluded bits?

Agreed in principle by whom? This could be RBS staff and not the council.

The S38 has been submitted but it does not mean it will be accepted by the council

Remember it is RBS saying the road is almost complete and not the council.

Check carefully who did the original road and at what stage both physically, and in terms of construction, RBS took on any responsibility.

Trust this helps

andie_303

Thanks Furts out of interest if the road is adopted as normal would that mean the council are responsible for all the bits Severn Trent aren't? Forgive my ignorance.

They tell me it has been agreed in principle by Notts County Council - we have asked for written evidence of this.

The drains/sewers run either side of the road I have read in the planning docs that the council would not allow any services under the road.

The initial Tarmac road off the main highway was started by the original developer I.e a basic road to allow the diggers etc on site but was turned into a "proper" road by RBS this then turns into block paving for us to drive around the back of our house (where the garage is located) as well as access to other homes. I saw this being laid less than 2 months ago and is wholly work done by RBS.

Pitlanepiglet

Don't get side tracked by the drains - that isn't your problem at the moment.

Subject to what your lender says, I would be asking for a retention in respect of the potential risk of you being asked to pay towards the upkeep on the road prior to the S38 agreement being finalised.

So your solicitor would retain an amount (I'd start at £2k and see what could be agreed) in their client account until the road has been adopted by the Highways Authority. Once that has happened they release the retained amount to the seller. If the road isn't adopted and you are asked to contribute to it being brought up to standard then you have the retained amount.

andie_303

Thanks piglet - I asked our solicitor if we could do that and haven't had a response yet. I will chase it again in the morning

Furts

Sorry piglet but if RBS pass road responsibility to andie this will include the drains.

The council will only become responsible when adopting the road .

The brutal truth is this. No council really wants to adopt a road - it is incurring potential risks and future maintenance for which they struggle to find finances. These costs are born by you and I - that is council tax payers. Councils are more concerned in the interests and votes of us than in adopting a road

It is in the council's interest to spin out adoption for as long as possible. RBS know this. And if RBS think there is anything dodgy in what they are offering to the council they will get rid of it as quickly as possible - to anybody they can find!