Estate roads in new developments are generally adopted by councils at the completion of a development. However there are occasions when the developer's intention may be to keep the roads in private ownership and perhaps have them managed by a management company with payment levied through a service charge. An example here may be a high end, high spec gated residential development. In such cases, developers should be beware of the impact of the Advanced Payments Code (APC) because you may end up paying twice for the road works.
The Highways Act states that, in certain circumstances, where a proposed building will front a private street, that building may not be erected until the developer has paid the council a sum of money equivalent to the cost of bringing the private road up to an adoptable standard. In the case of a new development this would represent the total cost of constructing the estate roads. These provisions are being used increasingly regularly by councils due to recent case law decisions.
If a council is planning to serve an APC notice requiring the payment of such sum of money, it must do so within 6 weeks of the building regulation plans being submitted. An APC Notice is a registrable Land Charge.
This effectively means that you have to pay twice; once to actually construct the road and again to the council under the APC Notice. There is no right to appeal against the principle of the payment, however you can appeal against the actual amount if this exceeds the actual cost of construction. If work starts on the development before payment is made, then the developer opens himself up to the possibility of a fine.
And when will you see your money again? Well, unlike in a conventional highways agreement, councils have a discretion under the APC as to whether to refund money at all. They will consult with the owner of the road at the time they are considering the repayment and by this time the developer may well have sold all the units and transferred title of the road to the new owners or to a management company. Those new owners will then have the power to make representations about repayment.
Developers are advised to consider this possibility in drawing up the terms of the sale to best protect their position.
If the street works have not been carried out to an adoptable standard, for example where exclusive materials have been used or expensive street lighting has been installed, it is possible that the council may not refund the monies and the developer will then be substantially out of pocket. There are ways to seek to negotiate a solution around this, so do get in touch if you need more advice on this issue.
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