If you Google un-adopted road news stories you will find lots of examples where plot purchases are complaining that their nice new houses are fronted by un-adopted pot-holed roads with defective drainage and sometimes no street lighting. In some parts of the country it has reached epidemic proportions both with old and new roads. There are some 40,000 un-adopted roads in the country. In Bradford alone, there are 1,500 un-adopted roads that it will cost £40M to put right! Some residents are complaining that they have to wheel their rubbish bins to the end of the road for the refuse collection lorries as they refuse to enter their road.
Why is this happening and why is it a problem across the country and how can you make sure that you don’t end up as the usual Aunt Sally holding the blame for not ensuring this didn’t happen when you acted for the buyers on their purchase of a new house?
Well in theory the process should work like this - the builder enters into an agreement under s.38 Highways Act 1980, supported by a bond; the builder builds the road, drains and street lighting to the required standard; the builder maintains the road for a year or so (the ‘maintenance period’); the relevant local highway authority (usually a County Council) inspects the road and certifies that it, the drains and streetlights are all up to standard whereupon the maintenance responsibility transfers to them. After that the residents needn’t worry as they can rely on the highway authority to keep the road up to standard.
However in numerous cases, nothing actually happens after the road is constructed. The builder never asks the Council to inspect the road at the end of the maintenance period. The Council doesn’t do anything about it either - after all it’s not their problem. Even if the builder does ask for the road to be signed off, the Council often doesn’t have the manpower in its Highways department to do the road inspection and it just ends up on a list of uncompleted jobs. Nothing happens then until potholes develop or the street lighting stops working, whereupon the residents discover the unpleasant fact that it is all their responsibility to try and chivvy everyone along to do anything about it.
It may be that pressure on local councillors eventually means the road is finally inspected but it is often discovered that there are problems with the construction of the road, or drains or streetlights so the road is rejected. Often the local council takes no action to have the work done, does not claim on the bond and so nothing happens again. As the owners were not a party to the s.38 agreement they have no right to force the Council to do anything about it either.
Even if Council does have the political will to do something about the road, it would probably take 3 or 4 years before their internal project approval tendering and finance requirements grind through the processes needed before works can be carried out.
Alternatively the owners of the adjoining properties might dig deep in their savings and pay for the cost of the repairs themselves, perhaps costing as much as £20-30,000 split between the owners.
The original plot purchasers may find that under the terms of the purchase contract the original builder was obliged to make sure the road was built to the right standard and adopted. However as any litigation solicitor will tell you, it’s one thing having the right to something and another thing to go to court to enforce it. The owners may have to spend money on expensive litigation and in some cases the original builder may have gone out of business anyway.
Back to square one for the residents, faced now with the prospect of expensive class actions and litigation as the only way of moving it on.What is worse they may find that no-one will buy their home either if they want to move house.
Some of the recent purchasers may have got an ‘un-adopted roads title insurance’ policy when they bought the property thinking that this will cover them. Think again - when they read the policy they may find that the policy covers them against action by the Council to recover road maintenance works but on condition that they don’t contact the council or take any action which would mean that the Council is made aware of the problem! After all, the insurance company don’t want you to do anything that would increase the chance of them being required to pay out do they? So they have the choice of doing nothing and watching the potholes get worse or doing something pro-active and invalidating their policy.
It’s about this time that they will be looking for someone to blame for this sorry mess and chances are their conveyancer will be high up on the list, after all, surely they should have been warned about this? They were told it was all going to be fine, weren’t they? No-one suggested a retention or explained the risks, did they? So off goes a complaint to the Legal Ombudsman and a resulting £400 bill to the solicitors involved for their costs in dealing with the complaint and the wasted time dealing with it.
So what do you do if you are acting for a purchaser of a new house who only seems to be interested in how glossy the kitchen units are and whether they can get in before Easter?
First of all - make sure that there is an obligation on the builder to procure the ultimate adoption of the roads. This shouldn’t be too hard as builders will expect to be required to give this.
Next - see if there is actually an s.38 agreement in place and if not, find out why not. Don’t be fobbed off by the builder - perhaps call the highways department direct and find out the back story if there is one. In my experience acting for builders they often have no interest in entering into the agreement if they don’t have to - it’s just extra legal fees and hassle. Often they find they can sell all the plots without entering into it and they then lose interest. Sometimes you can negotiate a retention but it has to be a substantial one to mean anything.
One conveyancer told me that he had sold off 175 plots on a new estate and that not one of the purchaser’s conveyancers had even asked why there was no s.38 agreement in place or asked whether it was proposed to enter into one!
Says something about the state of residential conveyancing perhaps.
For plot purchasers the CML’s attitude is that if either there is a s.38 and bond in place or a positive obligation on the builder they are happy - but of course they are only interested in the value of the property on resale covering their loan - they don’t have to live on a road with no street lighting, no refuse collection and potholes to boot. Another example of the lender’s interest and the buyers interest being different.
If there is a s.38 agreement - read it and see when it should have been adopted by or will be adopted. If in doubt again call the relevant Highways department. I have done this sometimes only to discover the horror that as far as they were concerned the road would never become adopted because of numerous problems with drains, layout, surface water outfalls, defects and so on. One road in question is still not adopted over 10 years later…
Finally it is absolutely essential that you explain in clear and plain English to the client what the risks they are taking if they decide to proceed nonetheless, so that they are not going to be able to come back and blame you if it all ends in a round of buck-passing by builders, councils, engineers, water companies and so on… Pre-prepared guides help with this.