Following an investigation by 5 live Investigates (a programme on BBC Radio 5 Live) on the 25th October 2015 the BBC news website published a report into the problems facing thousands, if not tens of thousands, of home owners on private housing developments in England and Wales. To read the BBC news report click on this link, to hear the Radio 5 Live report click on this link to download the podcast.
For those of you fortunate enough to have never experienced these problems you may not be aware that a very large number of purchasers on new developments are discovering (after purchase) that the Highways Authority have not taken the appropriate steps to ensure the developer builds the road to a good standard or entered in to a voluntary road adoption agreement, called a Section 38. The Section 38 is not a legal requirement on the developer’s part, although probably it should be because if the local authority doesn’t adopt the road then the home owners have the difficult and expensive task of maintaining it themselves. The same problem also often applies to drains and sewers on a new development, with the developer not taking the appropriate steps to ensure that when the development is completed the maintenance is taken on by the relevant Water Company.
This is a national scandal and something which everyone should be concerned about.
Successive Governments have nothing to address the problem, and the last time central government even attempted to measure the scale of the issue appears to have been in 1974. The reason you should be concerned about this is that it can happen to anyone who buys a new home on a private development and the law offers you little or no protection whatsoever. There is, however, some hope of a solution offered to those currently experiencing this problem by pioneering advocacy group Resident Adoption Action Group, , about whom we shall talk more at the end of this article.
When a new development is constructed best practice is that the developer enters into a ‘Section 38‘ agreement with the local authority to adopt the road when the development is completed, and a ‘Section 104‘ agreement with the relevant water company to do the same with the drains and sewers. This will ensure that the roads, drains and sewers are maintained by the local authority and the water company on an ongoing basis.
Unfortunately, this is often not the case. If the Highways Authority have not served the correct notice on the developer, their legal powers to force the developer to completion are diminished. Therefore the road could remain incomplete. In addition if the developer ceases to trade, the road would remain incomplete as no money was secured from the developer under notice to cover this eventuality. In either situation the effect on the owners of these new homes can be devastating. They have to pay for maintenance themselves, and on occasion they have to have pay out of their own pockets to complete half built roads, sewers and drains. In a case reported on by the BBC, local residents had to find £250,000 simply to finish the road to their homes. What is perhaps even more shocking is that these unlucky home owners are in effect paying for all this twice: once in direct maintenance charges they pay for looking after the roads, drains and sewers, and then again through their council tax and water rates – which would have covered these costs if the developer had done what they supposed to do when the site was under construction. Local authorities and water companies don’t give discounts to people who have to maintain their own roads, drains and sewers.
There is process which is laid down in law, which would (were it followed by the public authorities responsible for that process) at least partly resolve this problem.
Under the Highways Act 1980, Building Control (District Council or Metropolitan Borough level), have a duty to notify the Highways Authority, within 7 days, after Building Regulations approval (technical approval of the building plans) has been passed, advising an Advanced Payment Code (APC) is required if 6 or more houses are being built. An APC is either a sum of money or surety bond, from the developer held by the Highways Authority. This money/bond will be the value estimated by the council to build the roads to a good standard. Once the roads have been completed and inspected by the council as made up to a good standard, the money will be refunded to the developer. If the developer defaults or ceases to trade during construction, the above bonds will be called in to complete the works to an adoptable standard.
The notification to the developer should be made in the form of Section 220 notice by the Highway Authority within 6 weeks of Building Regulations approval. Without an APC or signed and enforceable Section 38 agreement in place it is an offence for the developer to commence building work.
Sounds simple enough doesn’t it? If the developer chooses not to have the road adopted, then at least there should be money held to make sure that the roads get completed.
However, in practice things often go wrong in one or more of the following ways, particularly if the developer goes bust, or becomes uncontactable, before the road gets completed:
The all too frequent problem is that either:
A. Building Control fails to notify the Highway Authority and the Section 22o notice is not served within the 6 week period.
B. The Highways Authority simply fails to enforce the rules, and the developer gets away with building on the site without either a Section 38 agreement in place or the APC in place.
Help is at hand though from RAAG, which is a not for profit group which assists home owners left ‘high and dry’ by unscrupulous developers. RAAG, which we note receives no public funding and makes no charge to the people they help, was formed by a group of home owners who, after living on development with unadopted roads for a period of 10 years, finally managed to get their local authority to adopt the roads on their development. The way they did it was by campaigning. This is the approach they are promoting, which they aptly describe as ‘People Power’.
If you are experiencing these types of problems on the development where you live then we recommend that you contact RAAG by clicking on the link to visit their website. As far as we are aware they are the only campaign and support group dedicated to this issue in England and Wales, and the help they offer extends to residents with a similar problem in Scotland and Northern Ireland. They have a wealth of experience and can help guide you through the steps towards achieving the same resolution they themselves achieved. They are also maintaining a register of developments where this problem is occurring. As we explained above, successive Governments have made no effort whatsoever to even investigate the scale of this issue and everyone who registers their development with RAAG is adding more weight to their campaign to get the current Government to take notice and do something to tackle this widespread problem. No Government will address a problem which they don’t know exists.