House with unadopted road, no management company

SalarySlave

Hi All

I have just put in a bid on a house and it has been accepted. I have since found out that the road in the development (10 houses) Has not been adopted by the council yet. The developer of the houses has since gone bust. The management company also no longer exists. The seller has offered a 10 year indemnity insurance.

I do not understand most of this which is why it may not be clear what I am asking

Someone has told me that this situation is really common and nothing to worry about. I have also been told that the lender may refuse to lend because of this.

So... what should my next steps be?

Does anyone know which lenders would refuse and which ones would not care.

Finally... should I walk away?

sammyjammy

Most new build estates will have unadopted roads, the council are unlikely to ever take charge of them.

IMHO no lenders would care, its very common place

davidmcn

SalarySlave wrote: »

The seller has offered a 10 year indemnity insurance.

Indemnity against what?

The road being unadopted isn't necessarily a problem.

Have you spoken to your solicitor about it yet?

Tomg84

We've got a (small) unadopted road in front of our house but its officially in our plan so we own it. I don't think a mortgage lender will care, ours didn't, and our broker didn't bat an eyelid.

We know eventually we'll have to pay to fix/replace it. Coordinating with your neighbours when the time comes will probably be more challenging but nothing that tea and cake can't fix.

flashg67

Tomg84 wrote: »

We've got a (small) unadopted road in front of our house but its officially in our plan so we own it. I don't think a mortgage lender will care, ours didn't, and our broker didn't bat an eyelid.

We know eventually we'll have to pay to fix/replace it. Coordinating with your neighbours when the time comes will probably be more challenging but nothing that tea and cake can't fix.

We actually have a management company on our small estate (21 houses) and just getting everyone to chip in their fair share is nigh on impossible and of course, people see one or two not paying and the problem spirals.
Not having one might not worry the mortgage provider but I'd be wary if/when issues do arise - unless your cake is really really good!

SalarySlave

I've spoken to a solicitor who warned me that they would have to inform the lender about the road, and if the lender sees this as a risk to reselling the property then they may not lend against it, or they may reduce the perceived value of the house.

I am nervous that I may go to several lenders paying several surveys and getting rejected.

I love the house.

davidmcn

SalarySlave wrote: »

I've spoken to a solicitor who warned me that they would have to inform the lender about the road, and if the lender sees this as a risk to reselling the property then they may not lend against it, or they may reduce the perceived value of the house.

I am nervous that I may go to several lenders paying several surveys and getting rejected.

Any lender would need to be told about it, as their standard valuation assumptions would include that the road is adopted - so the valuer would need to reassess it on the basis that it's private. Like I said, that doesn't mean it's unmortgageable.

Have any of the other houses been sold "second hand" yet?

SalarySlave

davidmcn wrote: »

Any lender would need to be told about it, as their standard valuation assumptions would include that the road is adopted - so the valuer would need to reassess it on the basis that it's private. Like I said, that doesn't mean it's unmortgageable.

Have any of the other houses been sold "second hand" yet?

Yes there has certainly been one house sold recently.

I remember seeing it advertised and then marked as sold

martindow

In a few decades when the road surface starts to break up and pot holes form, these estates are going to be a real problem when houses are sold. The state of the roads is not going to be a selling point.

Getting large numbers of households to agree to finance repairs will be next to impossible.

Kis1981

I'm having pretty much exactly the same issue with the house I'm selling!!! The difference being that we do have a management company. We are just waiting to hear from the buyers lender as to whether they are happy to proceed. Very Stressful!

RelievedSheff

sammyjammy wrote: »

Most new build estates will have unadopted roads, the council are unlikely to ever take charge of them.

IMHO no lenders would care, its very common place

That isn't strictly true.

By far and away most developments have the main access roads adopted under a Section 38 agreement with the local highways authority. Occasionally by a different process Section 37 but quite rarely.

Private shared driveways (usually but not always limited to 5 dwellings per driveway) exist on these developments but they are never intended to be adopted and are not built to adoptable standards. These are always to be maintained by the residents and will never be able to be adopted.

As I understand it in the OP's case the road has been intended for adoption however the developer never got the adoption process, which can be very lengthy, fulfilled. It could be worth approaching the local highways authority and finding out how far along the adoption process the road actually got. It may be possible for the residents to get the road signed off and adopted.