Section 38 Agreement

Brummie_2010

Hi we are very close to exchanging contracts on our house but our solicitor has today told us that the house is on unadopted land but there is an agreement in place for the local council to adopted the land in the near future. My solicitor has told me that the sellers solicitor must provide details of the section 38 agreement and details of any bond in place to ensure that if the property developer went bust before the adoption we could not be held liable.
After some digging I found the property developer went bust in Jan 2013 (house is 8 years old). My solicitor has said it is critical that the agreement and bond details are seen to ensure that we are covered.
Sellers solicitor says it should have been done during the local searches and they will not pay for it (£40). My solicitor insists they should provide it ?!
So we have stand off, anyone know who is right ?


I certainly won't let £40.00 stand in the way of exchange/completion !


Thanks

bigadaj

Your solicitor is right, though I can see why the vendors solicitor has taken his view.

You could offer to pay the £40 if you are keen to progress, however I'd be sceptical as to whether there is a bond in place if the developer has gone bust. If the road and pot ethically other services, haven't been adopted then that would harm the value of the property, and if the vendor can't demonstrate this then they should reduce the price proportionally. Even then if it is a street then you would be jointly liable with other residents for maintenance, in many cases people won't pay or can't agree to this so the road etc can deteriorate over time, again hitting value.

ValHaller

Straightforwardly, your best course of action is to reduce your offer by the amount you consider you are at risk and reinstate the original offer if the vendor can produce evidence of the S38 and the bond being in place.

Brummie_2010

Thank you both for your replies, there is S38 in place and a bond of £50,000.00 in place. However my solicitor has advised caution and said that if the road remains unadopted after the value of the bond is used up we could still end up liable. I thought the bond automatically paid anything to get the adoption through.

The road is in a very good state of repair at present as it is only 7 years old.

What to do, that is the question ?!?

ValHaller

Brummie_2010 wrote: »

What to do, that is the question ?!?

Get quotes for all the work to get the affected roads adopted?

I think I would move on from this one.