We will track here amendments to this resource that reflect changes in law and practice.
Under section 38 of the Highways Act 1980, a local highways authority can enter into a legal agreement with a developer to adopt a highway provided the highway has been constructed to a specified standard and to the satisfaction of the local highways authority.
This standard document assumes that the highway to be adopted by the local highways authority has not been constructed.
This standard document contains guidance notes (integrated drafting notes) within the text, drawing attention to specific issues. You can elect to view the standard document with, or without, the integrated notes by using the options in the "Actions" box in the top right hand corner of the screen.
The standard document has been drafted for use where the developer owns the land on which the highway works are to be carried out.
The following assumptions have been made in this standard document:
Title to the land is freehold.
The parties to the standard document are companies incorporated in England and Wales.
A surety enters into the standard document to guarantee the performance of the developer.
The highway has not been constructed.
If the above assumptions do not apply, appropriate amendments will be required to cover the actual circumstances.
This agreement is dated [DATE]
(A) The Council is the local highway authority for the area in which the Land is situated.
(B) The Developer owns the Land which includes the site of the proposed Road and all other land required for the Works.
(C) The Developer has requested that after the Works have been completed and maintained, the Council shall adopt the Road as a highway maintainable at the public expense, which the Council has agreed to do on the terms and conditions of this agreement.
(D) The Surety has agreed to enter into this agreement for the purposes set out in clause 21.
(E) [The Mortgagee is the registered proprietor of the charge dated [DATE] referred to in entry no [NUMBER] of the charges register of Title number [NUMBER] and has agreed to enter into this agreement to grant the consent contained in clause 34.]
The Background must be adapted to suit the particular circumstances.
1.1 The definitions and rules of interpretation in this clause apply in this agreement.
For further information on the CDM Regulations, see Practice note, Construction (Design and Management) Regulations 2007 (www.practicallaw.com/0-207-2306).
CRC is a new compulsory emissions trading scheme for large non-energy intensive businesses and public sector organisations in the UK. The scheme is expected to come into force in April 2010. It is expected to apply to around 5,000 organisations, primarily those with annual electricity bills above £500,000.
For further information on CRC, see Practice note, CRC - Carbon Reduction Commitment Energy Efficiency Scheme: overview (www.practicallaw.com/0-294-1952).
(a) the cost of carrying out the Default Work;
(b) the cost of maintaining the Works for the Maintenance Period; and
(c) the usual establishment charges of the Council.
A health and safety file will usually be required by the CDM Regulations for the Works.
For further information on the:
Health and Safety file, see Practice note, CDM 2007: Transactions Issues: The health and safety file in practice (www.practicallaw.com/6-242-4966).
CDM Regulations, see Practice note, Construction (Design and Management) Regulations 2007 (www.practicallaw.com/0-207-2306).
(a) any off-site highway drainage shown coloured [COLOUR] on the Drawings;
(b) the footpaths, street lighting, all verges, service strips, service margins, vehicular crossings, road surface water drainage system (if any); and
(c) all other ancillary items.
and Roads shall mean more than one of them.
For further information on sewer adoption agreements, see Practice note, Adoption of sewers: section 104 agreements (www.practicallaw.com/2-422-3067).
(a) persons authorised under any enactment to carry on an undertaking for the supply of electricity, gas, water and any sewerage undertaking;
(b) the Environment Agency;
(c) a holder of a licence to operate telecommunication systems;
(d) the Civil Aviation Authority; and
(e) the holder of a licence to supply cable television.
A railway, tramway, road transport, water transport, canal, inland navigation, dock, harbour, pier or lighthouse undertaking.
An undertaking for the supply of hydraulic power.
The definition in this agreement has therefore been widened.
This agreement contains standard boilerplate provisions dealing with the rules of interpretation. In particular note that email communication will not be treated as being "written" or "in writing". For further information on boilerplate clauses, see Boilerplate: drafting notes (www.practicallaw.com/1-107-3655).
1.2 Clause, Schedule and paragraph headings shall not affect the interpretation of this agreement.
1.3 A person includes a natural person, corporate or unincorporated body (whether or not having separate legal personality).
1.4 The Schedules form part of this agreement and shall have effect as if set out in full in the body of this agreement. Any reference to this agreement includes the Schedules.
1.5 A reference to a company shall include any company, corporation or other body corporate, wherever and however incorporated or established.
1.6 Unless the context otherwise requires, words in the singular shall include the plural and in the plural shall include the singular.
1.7 Unless the context otherwise requires, a reference to one gender shall include a reference to the other genders.
1.8 A reference to any party shall include that party's personal representatives, successors or permitted assigns.
1.9 A reference to a statute or statutory provision is a reference to it as [amended, extended or re-enacted from time to time OR it is in force at the date of this agreement][;provided that, as between the parties, no such amendment, extension or re-enactment shall apply for the purposes of this agreement to the extent that it would impose any new or extended obligation, liability or restriction on, or otherwise adversely affect the rights of, any party].
1.10 A reference to a statute or statutory provision shall include any subordinate legislation made [from time to time OR as at the date of this agreement] under that statute or statutory provision.
1.11 A reference to writing or written does not include [faxes or] e-mail.
1.12 [Documents in agreed form are documents in the form agreed by the parties and initialled by or on behalf of them for identification.]
1.13 [A reference to "this agreement" or to any other agreement or document referred to in this agreement is a reference to this agreement or such other document or agreement as varied or novated (in each case, other than in breach of the provisions of this agreement) from time to time.]
1.14 References to clauses and schedules are to the clauses and schedules of this agreement; references to paragraphs are to paragraphs of the relevant schedule.
1.15 An obligation in this agreement on a person not to do something includes an obligation not to agree or allow that thing to be done.
1.16 Any phrase introduced by the terms including, include, in particular or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms.
1.17 This agreement is made under section 38 of the Highways Act 1980, section 111 of the Local Government Act 1972 and any other enabling powers of the Council.
2.1 The Developer shall, at its own cost, use [its best endeavours OR all reasonable endeavours] to carry out and complete the Works:
(a) in a good and workmanlike manner;
(b) using only good quality materials approved by the Proper Officer;
(c) in accordance with this agreement, the Specification (a copy of which has been received by the Developer) and the Drawings;
(d) to the Proper Officer's [reasonable] satisfaction; [and]
(e) in compliance with all relevant British Standards, codes of practice and good building practice; [and]
(f) [[within [NUMBER] calendar months following the date of this Agreement OR within [NUMBER] calendar months following the date of occupation of the first [DWELLING OR BUILDING] on the Land].]
2.2 The Developer shall give to the Proper Officer not less than [NUMBER] Working Days written notice of the date of starting the Works.
2.3 [Save as provided for in clause 11.3] the Developer shall maintain the Road until the date of issue of the Final Certificate.
Clause 11.3 establishes who will be responsible, during the Maintenance Period, for maintaining and paying for the illumination of the street lights and traffic signs. If the Developer is responsible, the words in square brackets should be deleted.
The Developer declares and warrants to the Council that throughout the duration of this agreement the Developer has or will have full right, liberty and consent to carry out such works as may be necessary to connect the Road to a highway that is, or will be, maintainable at the public expense.
If a delay occurs, which is the fault of the Council and the contract does not make provision for that delay, the Developer may argue that the original completion date falls away and time is "at large". This does not mean that the Developer would have as long as it likes to complete the works: it means that the Developer would be under an obligation to complete the works within a reasonable time.
Time at large results from the application of the "prevention principle", which provides that no party may require the other to comply with a contractual obligation in circumstances where that party has itself prevented such compliance.
If the Council has prevented the Developer from carrying out the works "on time" (and the contract does not provide for how that delay is dealt with), the Council may not be able to insist that the Developer meets the original timetable for completion of the Works.
This issue is dealt with in more detail in standard form building contracts, such as the JCT Design and Build Contract, 2005 edition, Revision 2 2009, clauses 2.23 to 2.26. For more information, see PLC Construction, Practice note, Time for completion and extension of time (www.practicallaw.com/6-385-2414).
4.1 Without prejudice to any remedy of the Council, the Proper Officer may at any time, exercising absolute discretion [subject only to any objections by the Surety] grant an extension of time to complete the Works for a further period or periods by giving written notice to the Developer.
4.2 If, by any impediment, prevention or default, whether by act or omission by the Council (except to the extent caused or contributed to by any default, whether by act or omission of the Developer), the Council delays the carrying out and completion of the Works [or the Developer's obligations under clause 11], the Proper Officer shall grant an extension of time to complete the Works [or the Developer's obligations under clause 11] for a further period or periods, by giving written notice to the Developer. Such extension shall be commensurate with the delay suffered by the Developer that was caused by such impediment, prevention or default.
5.1 If the Developer intends to suspend construction of the Works for a period of more than [NUMBER] Working Days, the Developer shall notify the Proper Officer in writing of:
(a) the intended suspension not less than [NUMBER] Working Days before the start of the suspension; and
(b) the Developer's intention to re-commence construction of the Works not less than [NUMBER] Working Days before such re-commencement.
5.2 If the Developer fails to notify the Proper Officer under clause 2.2 and clause 5.1, the inspection fee referred to in clause 35 shall be increased by such amount as the Proper Officer, exercising absolute discretion, sees fit to reimburse the Council any additional cost incurred by the Council in inspecting the Works because of such failure.
If the Council incurs any additional expense in inspecting the Works because the Developer has failed to notify the Council either five working days before works start or before works are suspended for a specified period, the Council may increase the fees payable by the Developer for the inspection of the Works.
6.1 During construction of the Works, the Developer shall give to the Proper Officer and any other Council officer free access to every part of the Works and Land for the purpose of inspecting the Works and all materials used, or intended to be used, for the Works.
6.2 While carrying out any inspection under clause 6.1, the Proper Officer and any other Council officer shall comply with any reasonable health and safety requirements notified to them by the Developer.
6.3 During construction of the Works, the Proper Officer may require the Developer to open up or expose any of the Works that have been covered up without previously being inspected by the Proper Officer. If the Developer fails to comply with any such request, the Council may take up or expose the relevant part of the Works causing as little damage or inconvenience as possible to or in respect of any other part or parts of the Works. The Developer shall pay the Council's [reasonable and proper] costs of such taking up, exposure and reinstatement.
7.1 The Developer must apply to the Proper Officer in writing for a:
(a) Part 1 Certificate;
(b) Part 2 Certificate; and
(c) Final Certificate.
7.2 Within ten Working Days following receipt of a written application from the Developer for the issue of a Part 1 Certificate or Final Certificate and within 20 Working Days following written application from the Developer for the issue of a Part 2 Certificate, the Proper Officer shall:
(a) inspect the Works to which the application relates; and
(b) provide the Developer (where necessary) with a definitive written list of any works required to be carried out to remedy any defect or damage to the Road before the issue of that certificate.
7.3 The Developer must carry out the works referred to in clause 7.2(b) without delay and at its own cost.
7.4 The works referred to in clause 7.2(b) shall be subject to the same inspection procedure detailed in this clause 7 until such time as the works have been completed to the [reasonable] satisfaction of the Proper Officer.
Within 20 Working Days following completion of the Part 1 Works to the [reasonable] satisfaction of the Proper Officer, the Proper Officer shall issue the Part 1 Certificate to the Developer.
Under a sewer adoption agreement (also known as a section 104 agreement) a sewer is subject to a specified maintenance period before it can be adopted by the statutory undertaker as a sewer maintainable at the public expense.
For further information on the procedure for the adoption of sewers, see Practice note, Adoption of sewers: section 104 agreements (www.practicallaw.com/2-422-3067).
Within 20 Working Days following completion of the Part 2 Works to the [reasonable] satisfaction of the Proper Officer, the Proper Officer shall issue the Part 2 Certificate to the Developer provided that the maintenance period of any sewer constructed on or under the Road in accordance with a Sewer Adoption Agreement [is currently running or] has expired.
10.1 The Developer can apply to the Proper Officer for a Part 1 Certificate or a Part 2 Certificate for any part of the Road (being the whole width of the Road between specified points to be agreed by the Proper Officer and defined in the application).
10.2 If the Proper Officer is satisfied that the part of the Road defined is suitable to be treated as a separate road for the purposes of construction and adoption under this agreement, the Proper Officer may issue a separate Part 1 Certificate or Part 2 Certificate, as the case may be, for that part of the Road.
10.3 The same procedures may then be taken in respect of the said part of the Road as if it were the subject of a separate agreement under which the terms of this agreement applied, but without affecting the application of this agreement to the remainder of the Road.
10.4 [Following the date of issue of a Part 1 Certificate or a Part 2 Certificate, as the case may be, for part of the Road, the liability of the Surety shall be reduced as may be directed by the Proper Officer.]
11.1 From and including the date of the Part 2 Certificate:
(a) the Maintenance Period shall commence to run for a period of [NUMBER] calendar months [or, if construction vehicles continue to travel along the Road, such longer period as the Proper Officer may reasonably determine]; and
The maintenance period is usually 12 calendar months following the date of the Part 2 Certificate. However, the maintenance period can be expressed, for example, as running until a certain percentage of any buildings erected on the Land are occupied.
If a Part 2 Certificate is to be granted for part of the Road (see clause 10), the maintenance period needs to be carefully thought about as construction vehicles may still need to travel along roads that are subject to a Part 2 Certificate.
(b) the Road shall become a highway open for use by the public at large, but shall not be regarded as a highway maintainable at the public expense.
11.2 During the Maintenance Period, the Developer shall, at its own cost and to the [reasonable] satisfaction of the Proper Officer:
(a) maintain the Works, including all grassed and planted areas, and carry out routine maintenance of the Road, including sweeping, gully emptying and snow clearance; and
(b) clear all abandoned vehicles, rubbish, or other unauthorised materials from the Road.
11.3 During the Maintenance Period [the Council OR the Developer] shall, at its own cost:
(a) undertake routine maintenance of all Street Furniture; and
(b) be responsible for, the supply of energy and all associated costs including for the avoidance of doubt any CRC Costs for all the Street Furniture.
The CRC is a new obligatory emissions trading scheme for large non-energy intensive businesses and public sector organisations in the UK. It is expected to apply to around 5,000 organisations, primarily those with annual electricity bills above £500,000. The CRC will operate on a "cap and trade" basis - that is, the Government will auction a limited number of allowances each year and participants can then either buy or sell allowances from each other, depending on whether they have a deficit or surplus of allowances at the end of the relevant trading periods. An allowance represents the right to emit the equivalent of one tonne of carbon dioxide.
The scheme is expected to come into force in April 2010.
For further information on CRC, see Practice notes:
11.4 Before the Maintenance Period expires, the Developer shall, without delay and at its own expense, reinstate and make good any defect or damage to the Road, which may have arisen from any cause or be discovered, during the Maintenance Period (including any defect in, or damage to, the road surface water drainage system) of which the Developer has been notified in writing by the Proper Officer, so that the Works comply with the Specification and the Drawings.
The Proper Officer shall issue the Final Certificate to the Developer provided that:
(a) the Developer has paid to the Council all amounts due to the Council under this agreement including any commuted sum payable under clause 23;
(b) any necessary reinstatement or other works notified in writing to the Developer in accordance with clause 11.4 have been completed to the [reasonable] satisfaction of the Proper Officer;
(c) the Road connects directly to a highway [maintainable at public expense];
(d) the Developer has delivered to the Proper Officer each of the following:
(i) [NUMBER] sets of coloured drawings showing to a scale of [1:500] the Works as constructed, in a format specified by the Proper Officer;
(ii) [NUMBER] copies of the Health and Safety File; and
(iii) highways inventory data in a format specified by the Proper Officer.
(e) The Developer has at its own expense provided the Proper Officer with verification that any sewers constructed on or under the Road, in accordance with a Sewer Adoption Agreement, have been adopted by a Statutory Undertaker;
(f) the Developer has obtained and delivered to the Council all necessary deeds of easement under clause 19;
(g) the Developer has procured that an independent safety auditor, approved by the Council, has undertaken road safety audit stages 1, 2, 3 and 4 (Road Safety Audits) on the Works in accordance with H.D 19/03 (Road safety audit volume 5: design manual for roads and bridges); [and]
The purpose of the road safety audits is to apply operational road safety experience to the design and construction of a highway.
Safety auditors identify and address problem areas using experience obtained from accident reduction schemes. Only road safety is looked at.
There are four stages to a road safety audit:
A stage 1 audit is carried out at the completion of the preliminary design of the highway works.
A stage 2 audit is carried out at the final design stage of the highway works. The audit team looks at the layout of the highway including junctions, position of signs, carriageway markings and lighting provisions.
A stage 3 audit is carried out when the highway works are substantially complete on the ground and ideally before the road is open to traffic. All road signs, carriageway lines and street lighting should be in place.
A stage 4 audit is carried out after the road is open.
The drafting assumes that a stage 4 audit will be carried out by the Developer during the Maintenance Period. The audit will examine the causes of any personal injury accident.
The audits will identify any problem areas and specify remedial works which the Developer should carry out at its own cost.
(h) The Developer has carried out, at its own expense, all the remedial works identified in the Road Safety Audits to the [reasonable] satisfaction of the Proper Officer; [and]
(i) [the Developer has completed or procured, to the satisfaction of the Proper Officer, the transfer of the Road Land to the Council under clause 26.]
Once the Final Certificate is issued, the Road is adopted and the highways authority, at its own cost, becomes responsible for ensuring that the highway is safe and fit for traffic that may be expected to use the Road.
From and including the date of issue of the Final Certificate, the Road or any part of the Road, as the case may be, shall become a highway maintainable at the public expense.
14.1 The Developer shall, if requested by the Proper Officer, make all necessary arrangements for an independent accredited testing facility, approved by the Council, to test the materials proposed to be used in connection with the Works. The Developer shall bear the full cost of such testing and give to the Proper Officer, at no expense to the Council, copies of all material testing certificates.
14.2 Any material rejected by the Proper Officer acting reasonably, as a result of the tests carried out under clause 14.1 shall not be used by the Developer for any of the Works.
Until the date of issue of the Final Certificate, the Developer shall:
(a) appoint a supervisor qualified in accordance with the provisions of section 67 of the New Roads and Street Works Act 1991; and
(b) remain the street manager of the Road under section 49(4) of the New Roads and Street Works Act 1991.
A street manager of a street that is not a publicly maintainable highway is the authority, body or person liable to the public to maintain or repair the street or if there is none, the authority, body or person who has management or control of the street (section 49(4), New Roads and Street Works Act 1991).
A person commits a criminal offence if anything is deposited on a highway and a highway user is injured or endangered (section 161, Highways Act 1980). Mud deposited on the highway, by vehicles leaving construction sites, can cause cars and cycles to skid. It is therefore in the Developer's interest to provide vehicle and wheel cleaning apparatus on site.
This clause is a useful reminder.
The Developer shall:
(a) before commencing the Works provide suitable vehicle and wheel cleaning apparatus on the Land; and
(b) during construction of the Works ensure the cleaning apparatus is well maintained and used by all vehicles immediately before leaving the Land to prevent mud and other materials being deposited on the highway.]
17.1 Before connecting the Road to the carriageway of a highway maintainable at the public expense, the Developer shall give notice to the relevant Statutory Undertaker of any service or services laid in, on, or under the existing highway of the proposal to make such connection as if the connection were works for road purposes or major highway works as defined in section 86 of the New Roads and Street Works Act 1991.
17.2 The Developer shall:
(a) carry out, at its own cost, any works or measures required by a Statutory Undertaker as a result of the Works; and
(b) indemnify the Council for the cost of any works or measures carried out, as a result of the Works, by the Council at the request of the Statutory Undertaker.
No buildings erected by or on behalf of the Developer that front, adjoin, abut or have access to the Road shall be occupied until:
(a) the Proper Officer has issued the Part 1 Certificate for the Road, or the part of the Road that will provide the occupier with access to a vehicular highway;
(b) a base course pedestrian access (where applicable) to such highway has been provided;
(c) the Road or that part of the Road referred to in clause 18(a) has operational street lighting columns erected in accordance with the Specification and the Drawings; and
(d) the Road or that part of the Road referred to in clause 18(a) has street name plates erected as agreed with the Proper Officer.
Easements may be needed by the Council to secure necessary drainage or access rights. The cost of obtaining such rights will fall on the Developer.
For further information, see:
19.1 Before the Proper Officer issues a Final Certificate, the Developer shall, without cost to the Council, execute and complete or procure the execution and completion of:
(a) any deeds of easement that are in the opinion of the Council necessary to secure for the Council full drainage rights to such parts of the surface water drainage system of the Road Land that are not within the Road Land; and
(b) any other deeds of easement required by the Council for the future maintenance by the Council of any street furniture not within the Road Land.
19.2 The Developer shall pay the Council's proper and reasonable legal costs and disbursements in connection with the grant of any deeds of easement.
19.3 The Council shall not be liable for the payment of compensation or legal or any other costs or fees arising on account of the completion of any deeds of easement referred to in clause 19.1 or due to the subsequent use of the easement.
The Construction (Design and Management) Regulations 2007 (SI 2007/320) (the CDM Regulations) control health and safety issues on construction sites. The CDM Regulations apply to almost all construction work, including development such as that contemplated by this standard document.
For further information on the CDM Regulations, see Practice note, Construction (Design and Management) Regulations 2007 (www.practicallaw.com/0-207-2306).
20.1 The Developer elects to be treated for the purposes of the CDM Regulations as the only Client. The Council agrees with such election by the Developer.
20.2 The Developer agrees to undertake all the obligations of a Client and to use [its best endeavours OR all reasonable endeavours] to ensure that the Works are carried out in accordance with the CDM Regulations.
The Developer can either agree with the Council to ensure the works are carried out in accordance with the CDM Regulations or to use its best or reasonable endeavours to do so. Whichever alternative is selected will depend upon the amount of responsibility and financial risk the Developer is undertaking. For more information, see PLC Corporate, Practice note, Best or reasonable endeavours? (www.practicallaw.com/6-380-0482)
20.3 Before commencement of the Works, the Developer shall ensure that the Works are properly notified to the Health and Safety Executive in accordance with the CDM Regulations and shall give the Council a copy of the notification and any acknowledgement from the Health and Safety Executive.
20.4 The Developer shall ensure that the Health and Safety File is maintained correctly and is available for inspection in accordance with the CDM Regulations.
20.5 The Developer warrants it has taken or shall take all reasonable steps to be satisfied that all contractors engaged on the Works are suitable and competent having regard to their responsibilities in relation to the Works and the CDM Regulations.
20.6 The Developer shall indemnify and keep the Council indemnified against any breach of the Developer's obligations under this clause 20.
21.1 If any of the default events listed in clause 31 occur, the Head of Legal Services may, without affecting any statutory rights or powers or any other right, claim, or remedy under this agreement for such non-performance or non-observance, give to the Surety a Default Notice:
(a) specifying the Default Work; and
(b) containing an estimate by the Proper Officer of the Default Cost. The Default Cost shall not exceed:
(i) the Estimated Cost;
(ii) [£ AMOUNT] [PERCENTAGE %] of the Estimated Cost on and after the issue of the Part 1 Certificate;
(iii) [£ AMOUNT] [PERCENTAGE %] of the Estimated Cost on and after the issue of the Part 2 Certificate; or
(iv) an amount to be determined by the Proper Officer, exercising absolute discretion, after the issue of either part of a Part 1 Certificate or part of a Part 2 Certificate.
21.2 Within 20 Working Days following the date of receipt of the Default Notice, the Surety shall:
(a) pay the Default Cost to the Council; or
(b) send the Surety's Counter Notice to the Council.
21.3 If the Surety, having sent the Surety's Counter Notice to the Council, fails to start the Default Work within 20 Working Days from and including the date of receipt by the Council of the Surety's Counter Notice, the Surety shall without delay, pay the Default Cost to the Council together with simple interest at a rate of 4% per annum above the base rate of [NAME of BANK] from time to time, calculated from and including the date on which the Default Notice was sent to the Surety to and including the date the payment is made.
21.4 If the Surety, having sent the Surety's Counter Notice to the Council, starts the Default Work, and the Default Work is not completed within [NUMBER] calendar months from and including the date the Surety's Counter Notice was received by the Council, or within such further period or periods as may be agreed by the Proper Officer, the Surety shall forthwith on demand by the Head of Legal Services, pay to the Council:
(a) such sum as the Proper Officer may determine as being the cost of carrying out any Default Work not carried out by the Surety or the cost of maintaining the Works for a period of [NUMBER] calendar months before the Road becomes maintainable at public expense (or the cost of both); and
(b) the amount determined by the Proper Officer and the Head of Legal Services as representing the usual establishment charges of the Council.
21.5 The sum payable under clause 21.4 shall not exceed the Default Cost.
21.6 Following the issue of a Final Certificate for:
(a) any part of the Road, the liability of the Surety shall be reduced by an amount as may be directed by the Proper Officer [acting reasonably]; or
(b) all of the Road or the final part of the Road, the Surety shall be released from all liability under this agreement.
The Council covenants with the Developer and the Surety for the benefit of each and every building plot fronting, adjoining, abutting, or having access to the Road:
(a) to use [all reasonable endeavours OR best endeavours] in consultation with the Surety to mitigate any loss or damage sustained because of any default by the Developer, by taking such reasonable steps as the Council thinks fit;
(b) to use all monies received from the Surety pursuant to clause 21 towards the carrying out or completing the Works and maintaining and making good all defects for a period of [NUMBER] calendar months after completion of the Works. The amount received from the Surety shall be deducted from any sum that would otherwise be recoverable from the owners of premises fronting the Road under the Highways Act 1980;
(c) if the sum paid by the Surety to the Council exceeds the cost of carrying out or completing the Works and maintaining and making good all defects as set out in this agreement (together with the amount of the Council's usual establishment charges) to repay to the Surety within 20 Working Days following the date of the Final Certificate, the amount of any excess; and
(d) on the issue of the Final Certificate to give such notices and do whatever else may be required for securing that the Road or any part thereof, as the case may be, shall become a highway maintainable at public expense.
On the date of completion of this agreement, the Developer shall pay to the Council the sums specified in the second column of Schedule 3 in respect of the future maintenance and/or replacement cost of the corresponding item described in the first column of Schedule 3.
If there is any conflict between the Specification and the Drawings, the Specification shall take precedence unless otherwise agreed in writing by the Proper Officer.
If the Proper Officer determines that technical advice is required before any feature or structure included as part of the Works or that is under or over the Road can be approved, the Developer shall reimburse to the Council, within 20 Working Days following receipt of an invoice, all costs incurred by the Council in obtaining such technical advice.
26.1 Following the date of completion of this agreement, the Developer shall without delay and at its own cost, if requested by the Council, execute and complete, or procure the execution and completion by all necessary parties of, a transfer to the Council of the Road Land with full title guarantee and at nil consideration.
26.2 The transfer of the Road Land shall be free from encumbrances, other than those created prior to the date of this agreement (with the exception of any purely financial charge), which are consistent with the use of the Road Land for highway purposes or the proper management and maintenance of the Road Land.
26.3 The Developer shall assist in any application to the Chief Land Registrar for the registration of the Council with title absolute in respect of the Road Land.
26.4 The Developer shall not, without the Council's prior written consent, make a disposal of the whole or any part of the Road Land to any other person or persons, or grant any rights over it, except a right of way for all purposes in accordance with any planning permission granted by the local planning authority in respect of the Road Land.
The Private Street Works Code is a set of rules contained in sections 205-237 of the Highway Act 1980 that set out the procedures to be followed by the highways authority if it proposes to adopt a private street. A private street is a street not maintainable at the public expense.
The highways authority gives notice to the owners and occupiers of premises in the street that the street is to become a highway maintainable at the public expense. The highways authority will produce a specification detailing the works required to bring the street up to an adoptable standard.
The cost of the works can be paid by the highways authority, but usually the cost will be charged to the owners of the land and property that front onto the street (the owners are also known as the frontagers). Some highways authority may allow the frontagers to make payments in annual instalments plus interest, over a period of up to 30 years. In exceptional cases the debt may be left as a charge against the property and only interest is payable until the property is sold.
Where the majority of the street owners object to the adoption of the street, the highways authority has to apply to the local magistrates' court for an order overruling the objections and declaring the street a highway maintainable at the public expense. The magistrates' court has a wide power to nullify or amend the resolution to adopt and the specification of works.
Once the street is adopted, it becomes maintainable at the public expense and will no longer be the responsibility of the frontagers to maintain.
This power is useful where the owner of the road is unknown and a developer is therefore unable to enter into a section 38 agreement.
If the Developer fails to perform any of its obligations under this agreement, nothing in this agreement shall prevent or restrict the Council from exercising its powers under the Private Street Works Code contained in Part XI of the Highways Act 1980 or any other statutory provision.
The Advance Payment Code (APC) is a set of rules contained in sections 219 to 225 of the Highways Act 1980. The APC requires the Developer to make a payment or provide security to the highways authority for the making up of the roads onto which the Developer's development fronts.
The APC only applies to certain areas including all of the following:
Outer London boroughs.
All counties in which the APC was in force before 1974.
Any parish or community in which the APC has been adopted by resolution of the county council in accordance with Schedule 15 (Application of APC) of the Highways Act 1980.
To trigger payment under the APC, the highway authority must, within six weeks following the date of building regulations approval of a building, serve a notice on the person who deposited the building regulations plans requiring the payment of a specified sum or security. The sum required is the amount that in the opinion of the highways authority would be recoverable under the Private Street Works Code to bring the road up to an adoptable standard.
Once the six week period has expired the highways authority cannot ask the Developer to provide any payment or security under the APC. Until payment is made or security is given it is a criminal offence to start construction of any building.
Section 205 of the Highways Act 1980, sets out a number of exceptions to the APC. One of these exceptions is where a section 38 agreement is in place.
Section 221(3) of the Highways Act 1980 enables the highway authority to refund the whole or any part of the sum, with or without interest, or release the security, where payment or security has been made or given before the date of completion of a section 38 agreement.
On the date of completion of this agreement, the Council shall in respect of those plots detailed in column 1 of Schedule 4:
(a) refund to the Developer the sums shown in the second column of Schedule 4, paid by the Developer to the Council under the Advance Payment Code [together with simple interest at the base rate of [NAME OF BANK] from time to time, calculated from and including the date of deposit to the date of this agreement];
(b) release the security, shown in the fourth column of Schedule 4, given by the Developer to the Council under the Advance payment code.]
29.1 The Developer shall indemnify the Council in respect of any actions, charges, claims, costs, losses, damages, demands, liabilities and proceedings arising out of any breach or non-observance of the Developer's obligations in this agreement including (but not limited to):
(a) third party claims for death, personal injury or damage to property;
(b) statutory or other liability for the safety or security of the Land, working methods, employment practices, protection of the environment and control of pollution; and
(c) third party claims for unlawful interference with any rights of light, air, support, water, drainage or any other easement or right.
29.2 The Developer shall indemnify the Council in respect of any claims for compensation under section 10 of the Compulsory Purchase Act 1965 and claims under the Land Compensation Act 1973 arising out of, in connection with or incidental to, the carrying out of the Works and their subsequent use, other than those arising out of or in consequence of any negligent act default or omission of the Council.
29.3 The indemnification referred to in clause 29.2 includes:
(a) compensation payments under Part I of the Land Compensation Act 1973;
(b) all fees incurred by claimants, and those of the Council or its agent or contractor, in negotiating any claims (together with VAT payable on the claimants' professional advisors' fees);
(c) statutory interest payments to claimants and their professional advisors; and
(d) the Council's reasonable and proper legal costs in making the compensation, fees and interest payments under clause 29.3.
29.4 [The Developer shall only be required to indemnify the Council in accordance with this agreement if:
(a) the Council notifies the Developer as soon as reasonably practicable on becoming aware of any matter which becomes the subject of a claim for indemnity;
(b) the Council keeps the Developer reasonably informed of all progress of which it is, or becomes, aware of in connection with that matter and of any proposed settlement;
(c) where it is permitted by the Council's insurer, not settling or compromising that matter without the previous consent of the Developer, such consent not to be unreasonably withheld or delayed. Where the Developer does not consent it shall indemnify the Council against all costs incurred by the Council in litigating that matter and will assist the Council in such litigation by providing such witnesses and other evidence as it is able to do relating to any matter in contention.
The Developer is obliged to maintain public liability insurance. The level of cover should reflect the size and complexity of the Works, but may also depend on the availability of cover on the insurance market at the time the agreement is negotiated.
From and including the date of completion of this agreement until the date of issue of the Final Certificate, the Developer shall maintain public liability insurance in the Developer's own name to cover claims for injury to or death of any person or loss or damage to any real or personal property for an indemnity of not less than £[AMOUNT] for any one occurrence or series of occurrences arising out of the same event.
For further information on:
Corporate insolvency, see Practice note, Corporate insolvency: a guide (www.practicallaw.com/8-107-3973).
Personal insolvency, see Practice note, Personal insolvency: a quick guide (www.practicallaw.com/4-386-0721).
The Council may terminate this agreement (except for clause 1, clause 3, clause 7, clause 18, clause 19, clauses 21-23, clause 26 and clauses 32-42) immediately by written notice to the Developer without prejudice to any other rights the Council may have, if any of the following events occur:
(a) the Developer is in fundamental breach of any of its conditions, stipulations or obligations and liabilities in this agreement; or
(b) the Developer is in substantial breach of any of its conditions, stipulations or obligations and liabilities in this agreement and has failed to rectify the breach within a reasonable time after receiving notice to rectify from the Head of Legal Services; or
(c) where the Developer is a corporation:
(i) has an administrative receiver or receiver appointed over the whole or part of the Developer's assets or suffers the appointment of an administrator; or
(ii) any step is taken in connection with any voluntary arrangement or any other compromise or arrangement for the benefit of any creditors of the Developer; or
(iii) [an application is made for an administration order in relation to the Developer; or]
(iv) in relation to the Developer, the appointment of an administrator, the filing of documents with the court for the appointment of an administrator or the giving of notice of intention to appoint an administrator by the Developer or its directors, or by a qualifying floating charge holder (as defined in paragraph 14 of Schedule B1 to the Insolvency Act 1986); or
(v) a receiver or manager is appointed in relation to any property or income of the Developer; or
(vi) a liquidator is appointed in respect of the Developer; or
(vii) a voluntary winding-up of the Developer is commenced, except a winding-up for the purpose of amalgamation or reconstruction of a solvent company in respect of which a statutory declaration of solvency has been filed with the Registrar of Companies; or
(viii) [a petition is made for a winding-up order for the Developer; or]
(ix) the Developer is struck-off from the Register of Companies; or
(x) the Developer otherwise ceases to exist; or
(d) Where the Developer is an individual:
(i) the taking of any step in connection with any voluntary arrangement or any other compromise or arrangement for the benefit of any creditors of the Developer; or
(ii) the presentation of a petition for a bankruptcy order or the making of a bankruptcy order against the Developer.
32.1 Without affecting clause 2 and clause 31, if the Developer fails to carry out or complete the Works in accordance with the Developer's obligations under this agreement, the Council, after giving to the Developer [and the Surety] not less than 20 Working Days written notice, shall be entitled to carry out or complete the Works in default, using the Council's own employees, or by contractors or otherwise and to recover from the Developer or Surety the cost or carrying out or completing the Works as certified by the Proper Officer.
32.2 The Developer hereby grants to the Council and the Council's agents, contractors and employees full right and licence to enter onto and remain on the Land together with all machinery plant and materials in order to carry out or complete the Works and remedy any defects or damage to the Road pursuant to clause 32.1.
For further information on arbitration, see Practice note, Arbitration: a ten minute guide (www.practicallaw.com/7-203-8663).
Although this standard document relates to the construction of a road, the Construction Contracts (England and Wales) Exclusion Order 1998 (SI 1998/648) includes a statutory exception relating to section 38 of the Highways Act 1980, so that statutory adjudication rules (and the statutory rules on payment) do not apply.
Statutory adjudication and statutory payment rules affect "construction contracts" under Part II of the Housing Grants, Construction and Regeneration Act 1996 (see Practice note, Adjudication: do I have a "construction contract"? (www.practicallaw.com/6-204-4037)).
If any dispute arises out of this agreement, the dispute shall be referred to an arbitrator appointed jointly by the parties. If the parties cannot agree on the arbitrator's identity the arbitrator shall be appointed on either party's request by the President for the time being of the [Institution of Civil Engineers OR Royal Institution of Chartered Surveyors]. The arbitrator shall act in accordance with the Arbitration Act 1996 and the costs of the arbitration shall be payable by the parties in the proportions determined by the arbitrator (or if the arbitrator makes no direction, then equally).
The Mortgagee consents to the terms of this agreement but without liability save in the event that the Mortgagee becomes successor in title to the Developer at any time before the Developer has fully performed all its obligations contained in this agreement.]
35.1 On the date of completion of this agreement or whenever demanded, within ten Working Days of written demand, the Developer shall pay to the Council:
(a) £[AMOUNT] in respect of the [reasonable and proper] costs and expenses incurred or to be incurred by the Council in connection with the technical assessment, [safety audit] and inspection of the Works being [PERCENTAGE]% of the total of the Estimated Cost subject to a minimum fee of £[AMOUNT];
(b) the Council's [reasonable and proper] legal costs and disbursements in connection with the preparation, completion and registration of this agreement;
(c) any costs incurred by the Council in making and implementing any orders that regulate traffic which the Proper Officer deems necessary because of the Works and whether made or implemented before, during or after completion of the Works; and
Orders that regulate traffic enable highway authorities to restrict or prohibit the movement of vehicular and/or pedestrian traffic on a road. These orders can take effect at all times or during specified periods and certain classes of traffic may be exempted from an order.
A temporary order for road works may last for up to:
six months for footpaths, bridleways, cycle tracks and byways open to all traffic; and
18 months on other roads.
The length of the temporary order can be extended if the highway works will take longer to complete.
(d) the Council's [reasonable and proper] legal costs and disbursements in connection with the preparation, completion and registration of the transfer of the Road Land to the Council under clause 26.
35.2 Receipt by the Council of the payment of any sum shall not create any contractual relationship between the Council and the Developer, nor absolve the Developer from any liability or obligation imposed on the Developer by the terms of this agreement, or by statute or at common law.
The Developer may not assign this agreement without the prior written consent of the Council [such consent not to be unreasonably withheld [or delayed]].
For further information about the local land charges register, see Practice note, Searches: Local land charges (www.practicallaw.com/1-107-4834).
As soon as practicable, following the date of completion of this agreement, the Council shall enter this agreement and its terms and conditions in the local land charges register.
For information on severance, see Severance: drafting note (www.practicallaw.com/7-107-3841).
38.1 If any court or competent authority finds that any provision of this agreement (or part of any provision) is invalid, illegal or unenforceable, that provision or part-provision shall, to the extent required, be deemed to be deleted, and the validity and enforceability of the other provisions of this agreement shall not be affected.
38.2 If any invalid, unenforceable or illegal provision of this agreement would be valid, enforceable and legal if some part of it were deleted, [the provision shall apply with the minimum modification necessary to make it legal, valid and enforceable OR the parties shall negotiate in good faith to amend such provision such that, as amended, it is legal, valid and enforceable, and, to the greatest extent possible, achieves the parties' original commercial intention].
For information on notice provisions, see Notice: drafting note (www.practicallaw.com/3-107-3843).
39.1 Any notice [or other communication] required to be given under this agreement, shall be in writing and shall be delivered personally, or sent by pre-paid first class post or recorded delivery or by commercial courier, to each party required to receive the notice [or communication] at its address as set out below:
(a) Council: [NAME OF CONTACT] [ADDRESS].
(b) Developer: [NAME OF CONTACT] [ADDRESS].
(c) Surety: [NAME OF CONTACT] [ADDRESS].
(d) [Mortgagee: [NAME OF CONTACT] [ADDRESS].]
or as otherwise specified by the relevant party by notice in writing to each other party.
39.2 Any notice [or other communication] shall be deemed to have been duly received:
(a) if delivered personally, when left at the address and for the contact referred to in this clause;
(b) if sent by pre-paid first class post or recorded delivery, at [9.00am] on the [second] Working Day after posting; or
(c) if delivered by commercial courier, on the date and at the time that the courier's delivery receipt is signed.
39.3 [A notice [or other communication] required to be given under this agreement shall not be validly given if sent by e-mail.]
39.4 The provisions of this clause 39 shall not apply to the service of any proceedings or other documents in any legal action.
For information on counterparts, see Counterparts: drafting note (www.practicallaw.com/8-107-3845).
This agreement may be executed in any number of counterparts, each of which when executed and delivered shall constitute an original of this agreement, but all the counterparts shall together constitute the same agreement. [No counterpart shall be effective until each party has executed at least one counterpart.]]
For information on third party rights, see Third party rights: drafting note (www.practicallaw.com/2-107-3848).
No person other than a party to this agreement [, and their respective successors and permitted assigns,] shall have any rights to enforce any term of this agreement.
For information on the reasons for, and drafting guidance on, governing law clauses, see Governing law and jurisdiction: drafting note (www.practicallaw.com/4-107-3852).
This agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of England and Wales.
This agreement has been entered into on the date stated at the beginning of it.
All highway drainage.
All other drainage contained within the Road.
All kerb foundations and where appropriate, kerbs including lowering at vehicle crossings, pram-ramps, sub-base and base court surfacing to pedestrian way.
Carriageway sub-base, road base, vehicle crossings and any supporting structures to the same.
Carriageway base course surfacing and all vehicle crossings where appropriate.
Demarcation of sight lines and clearance of vision splays.
Operational street lighting.
Temporary street name plates.
All outstanding kerbing not completed as part of the Part 1 Works.
Pedestrian ways and cycle ways.
Carriageway wearing course and carriageway base course including (where appropriate) speed restraint measures.
Vision splays, verges and service strips.
All outstanding street lighting and street furniture.
Street name plates.
Road markings and traffic signs.
All other works described in the Specification and shown in the Drawings.
[DESCRIPTION OF ITEM]
Date of Advance payment code notice and reference
Form of security given
The common seal of [NAME OF COUNCIL]
was affixed to this document in the presence of:
Executed as a deed by [NAME OF DEVELOPER] acting by [NAME OF FIRST DIRECTOR], a director and [NAME OF SECOND DIRECTOR/SECRETARY], [a director OR its secretary]
[SIGNATURE OF FIRST DIRECTOR]
[SIGNATURE OF SECOND DIRECTOR OR SECRETARY]
[Director OR Secretary]
Executed as a deed by [NAME OF DEVELOPER] acting by [NAME OF DIRECTOR] a director, in the presence of:
[SIGNATURE OF WITNESS]
[NAME, ADDRESS [AND OCCUPATION] OF WITNESS]
[SIGNATURE OF DIRECTOR]
Executed as a deed by [NAME OF SURETY] acting by [NAME OF FIRST DIRECTOR], a director and [NAME OF SECOND DIRECTOR/SECRETARY], [a director OR its secretary]
[SIGNATURE OF FIRST DIRECTOR]
[SIGNATURE OF SECOND DIRECTOR OR SECRETARY]
[Director OR Secretary]
Executed as a deed by [NAME OF SURETY] acting by [NAME OF DIRECTOR] a director, in the presence of:
[SIGNATURE OF WITNESS]
[NAME, ADDRESS [AND OCCUPATION] OF WITNESS]
[SIGNATURE OF DIRECTOR]
Executed as a deed by [NAME OF MORTGAGEE] acting by [NAME OF FIRST DIRECTOR], a director and [NAME OF SECOND DIRECTOR/SECRETARY], [a director OR its secretary]
[SIGNATURE OF FIRST DIRECTOR]
[SIGNATURE OF SECOND DIRECTOR OR SECRETARY]
[Director OR Secretary]
Executed as a deed by [NAME OF MORTGAGEE] acting by [NAME OF DIRECTOR] a director, in the presence of:
[SIGNATURE OF WITNESS]
[NAME, ADDRESS [AND OCCUPATION] OF WITNESS]
[SIGNATURE OF DIRECTOR]