No Section 38 Agreement in Place: What It Means for Your Development Project

As a developer, it is essential to be aware of the various legal requirements that can impact your project. One such requirement is the Section 38 Agreement, which applies to the adoption of new roads.

A Section 38 Agreement is a legal agreement between the developer and the local highway authority that outlines the responsibilities for the design, construction, and maintenance of the new road. It is a vital part of the development process as it ensures that the new roads meet the necessary standards and can be adopted by the local authority once completed.

However, if there is no Section 38 Agreement in place, it can cause significant issues for your development project. Here`s what you need to know:

Responsibilities are Unclear

One of the primary issues that can arise when there is no Section 38 Agreement in place is that the responsibilities for the design, construction, and maintenance of the new road are unclear. This can lead to disputes between the developer and the local authority, causing delays and additional costs for your project.

Adoption by the Local Authority is Not Guaranteed

Without a Section 38 Agreement, there is no guarantee that the local authority will adopt the new road once it is completed. This means that the developer may have to maintain the road themselves or seek alternative arrangements, which can be costly and time-consuming.

Limited Access to Funding

If the local authority does not adopt the new road, it can also impact your access to funding. Many funding schemes require the adoption of new roads by the local authority, and without it, you may not be eligible for these schemes.

It Can Affect Property Values

The lack of a Section 38 Agreement can also have a significant impact on property values. If the new road does not meet the necessary standards, it can affect the value of the properties in the development, as well as future sales and rentals.

Conclusion

In summary, a Section 38 Agreement is an essential legal requirement for the adoption of new roads. Without it, the responsibilities for the design, construction, and maintenance of the new road can be unclear, and adoption by the local authority is not guaranteed. It can also impact your access to funding, property values, and cause significant delays and additional costs for your development project. Ensure that you have a Section 38 Agreement in place before starting your development to avoid these issues.