Un­adopted roads on new developments may drive up costs

Yorkshire Post - Property - - PROPERTY - John Rob­son

un­der Sec­tion 38 of The High­ways Act 1980. Sub­se­quent al­ter­ations to ex­ist­ing high­ways are un­der­taken un­der Sec­tion 278 of The High­ways Act 1980. Com­mu­nal ar­eas or pub­lic open spa­ces are adopted un­der sim­i­lar leg­is­la­tion.

De­vel­op­ers en­ter into Sec­tion 38 Agree­ments sup­ported by bonds (sums of money placed with the coun­cil to se­cure the con­struc­tion costs). This pro­vides com­fort for prop­erty buy­ers and en­sures they will not in­cur a fi­nan­cial cost con­tri­bu­tion to­wards the fi­nal con­struc­tion.

Ini­tially, the de­vel­oper will cre­ate the base and kerb­ing of the road en­abling build­ing work to pro­ceed and houses to be ac­cessed and thus sold. Once the de­vel­op­ment is com­plete the fi­nal sur­face will be laid, street lighting in­stalled and the coun­cil will in­spect with a view to adoption. The de­vel­oper is then re­quired to main­tain the roads to the adopt­able stan­dard for a pe­riod of 12 months be­fore the coun­cil will for­mally adopt the road and there­after main­tain it at pub­lic ex­pense.

All of the above reg­u­la­tory pro­ce­dure is time con­sum­ing and ex­pen­sive, both to the de­vel­oper and lo­cal author­ity. Hence the cur­rent trend for the roads serv­ing prop­er­ties within new developments to be trans­ferred to man­age­ment com­pa­nies formed to main­tain com­mon parts within the de­vel­op­ment. How­ever the es­tate le­gal doc­u­men­ta­tion pack must de­fine the pro­posed pro­ce­dure and fi­nan­cial costs. The rel­e­vant man­age­ment com­pany will usu­ally del­e­gate their re­spon­si­bil­i­ties set out in the trans­fer doc­u­men­ta­tion to ex­pe­ri­enced es­tate man­agers. Each prop­erty owner will or­di­nar­ily take a share in the man­age­ment com­pany. The man­agers will pro­duce a pro­posal and es­ti­mate as to the man­age­ment costs.

A pro­por­tion of such costs will be al­lo­cated to each unit prop­erty. The level is usu­ally dic­tated by the size of the house. For ex­am­ple, the per­cent­age level al­lo­cated to a five-bed­roomed prop­erty will be higher than a one -bed­roomed starter home.

It is im­por­tant your con­veyancer makes a thor­ough in­spec­tion of the doc­u­men­ta­tion. It is im­per­a­tive there is a ve­hi­cle in place for the man­age­ment com­pany’s es­tate man­ager to carry out a fi­nal in­spec­tion of the com­mon parts, pub­lic open spa­ces and road­ways to en­sure they have been con­structed and com­pleted to the same level as if they were to be coun­cil adopted. This must take place be­fore own­er­ship is trans­ferred to the man­age­ment com­pany.

Pro­vid­ing the le­gal doc­u­men­ta­tion has been prop­erly drafted cov­er­ing the rights of way re­quired, adoption and fu­ture main­te­nance pro­vi­sions this ar­range­ment works well and will not ad­versely af­fect the value or saleabil­ity of the prop­erty. How­ever, the ini­tial es­ti­mated main­te­nance costs can, and usu­ally will, in­crease over time.

John Rob­son is Res­i­den­tial Con­veyanc­ing Man­ager at Ford & War­ren Solic­i­tors, Leeds.

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