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New Builds & private roads...

Anyone have any experience with new builds and private roads? I'm in process of buying a property (5 year old) whereby the road it's on, was not adopted by the council.

It's the duty of the developer to make up the road to an adoptable standard and procure its adoption by the Council. If the developer doesn't do this then it will fall upon the individual homeowners to do this. The costs involved could be considerable. Apparently a Section 38 Agreement and Bond would offer some protection to the homeowners should this happen, but my solicitor has advised that this agreement and bond is not in place.

Below is the corrospodance from my solicitor...

I have noticed from the Search result that Great Western Way is not adopted by the Council, i.e. it is a private road.



I wrote to the seller’s lawyers and asked whether a Section 38 Agreement and Bond had been entered into in respect of the road. A Section 38 Agreement and Bond would offer some protection because under that agreement, the developer would promise to make up the road to the required standard for the Council to be able to take it over (adopt it). If the developer were to go bust, or leave the development without having made up the road to adoptable standard, then the financial bond (a sum of money deposited by the developer under the agreement) could be used to construct the road to adoptable standard and then cover the costs of having it adopted by the Council.



The Council have now written to me and said no Section 38 Agreement and Bond is in place. This means that if the developer does not construct the road to adoptable standard and procure its adoption by the Council, then it will fall upon the individual homeowners to do this. The costs involved could be considerable.



Please can you advise me how you wish to proceed.
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Comments

  • davidmcn
    davidmcn Posts: 23,596 Forumite
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    edited 6 February 2019 am28 11:49AM
    Are you buying with a mortgage, and if so is this acceptable to your lender? As that might make your mind up for you.

    What condition is the road actually in? If it appears to have been completed satisfactorily, worst case scenario is that you (and the other owners) (or a management company if there's one in place) will need to sort out maintenance in years to come - but presumably nothing needing done in the near future.
  • Yes buying with a mortgage. Not advised my lender yet, as I've only received this information today.

    There is a management company involved. The road is not made up yet, but was advised by the vendor during viewing, that they've had letters to say the road will be made up within the next month.
  • davidmcn
    davidmcn Posts: 23,596 Forumite
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    32_Briggsy wrote: »
    Not advised my lender yet, as I've only received this information today.
    I would let your solicitor deal with that, rather than confuse the issue. They might want to go back to the valuer, as the valuation will probably have assumed it's either adopted or guaranteed to be.
  • robatwork
    robatwork Posts: 7,235 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    I have some experience with a house on an unadopted road with a promise that the developer brings it up to standard and maintains it.

    DON'T TRUST THE DEVELOPER TO DO ANYTHING ONCE THEY FINISH BUILDING.

    OK that's out my system. On the road in question, there are supposed to be gates, CCTV, lights, parking management etc. There isn't, and as far as I know the developer (v small company) is still in business but none of this has been sorted out, and legal action has been commenced and pending for years. I am quite sure it will never be sorted out and the road won't ever be adopted.
  • Pretty much all new builds constructed in the last ten years or so will not have had the public realm adopted by the LA and instead the maintenance costs are shared between the residents.

    I suspect more LAs would be reluctant to adopt as they won't have the money to carry out the subsequent maintenance..
  • LadyDee
    LadyDee Posts: 4,293 Forumite
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    Think about the future OP if in say 5 or 10 years you want to sell, the road hasn't been adopted and is a poor state, prospective buyers could well be reluctant to proceed.
  • Hannah2
    Hannah2 Posts: 283 Forumite
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    Be careful with the management company and what you are actually signing up for. Are the management company due to take over the maintenance of the road, or are the council due to adopt it?

    Re. the maintenance charges, have a look into the company that they are using (Greenbelt?) and research feedback/reports on the company. Do the maintenance company own any land it is "employed" to maintain? Make sure you are aware as to what the annual fee will cover and what ad-hoc charges there might be (vandalism, play equipment maintenance, tree/shrub replacement) and if they plan to apply deadlines to pay these extra charges (eg 7 days) and late payment fees if you dont!

    Be sure of the area/map that the fees will cover, is there woodland involved, open spaces, public areas, playground equipment? Make sure you plan over the next 5 years or more for the fees to increase.

    Check what you need to do with the maintenance company in order to transfer your details to them when you buy the property - there is usually a fee involved. Also check what you need to do and how much it costs if you wish to sell your house in the future.

    I would make sure you are happy to accept all the above, plus the unknown increases in costs before you go ahead. Although Freehold you are in effect purchasing a leasehold property due to being linked to a maintenance company (depending on the details on the TP1/deeds).

    We pulled out of a new build purchase when we discovered what was involved with the management company (Greenbelt) and avoided buying a different new build when we discovered the road would not be adopted but would be "maintained" by a management company. Good luck!
  • Hmmm ... 5 years old and the road is not adopted. Surely if the road was to be adopted it would have happened by now?
  • davidmcn
    davidmcn Posts: 23,596 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Hmmm ... 5 years old and the road is not adopted. Surely if the road was to be adopted it would have happened by now?
    The OP has said it's not made up yet, and it's not going to be adopted before it's complete. Don't know the history of the site but it's not uncommon for developments to take years to complete in various phases, with road adoption not happening until the whole thing is done and dusted.
  • Slinky
    Slinky Posts: 10,714 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Hmmm ... 5 years old and the road is not adopted. Surely if the road was to be adopted it would have happened by now?


    We've new housing near us that started in 2006 and the last phase is being built. Only now are all of the roads being finished to an adoptable standard. We're talking 450 homes on a Taylor Wimpey development.
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