Section 38 Agreement
A Section 38 agreement (or S38) is a section of the Highways Act 1980 that can be used when a developer proposes to construct a new estate road for residential, industrial or general purpose traffic that may be offered to the Highway Authority for adoption as a public highway along with associated infrastructure such as drains, lighting and supporting structures.
Once adopted the highway authority agrees to undertake the maintenance and upkeep of the road under the Section 38 agreement. This date will be decided upon by the agreement.
The Highway Authority has no power to insist that a developer enter into an S38 agreement. However, many developers also see it as the better option, as the adoption process can be lengthy, and if it takes place after a road is completed, the developer will be responsible for all maintenance until adoption takes place.
If a Section 38 is to be entered into and the road is built to adoptable standards this might differ from roads that are to remain under the control or ownership of the developer. Less stringent specifications are therefore required if roads are not to be adopted. Many new estate roads are not built to adoptable standards. Each local authority is different as to what they will and will not allow.
Once a section 38 agreement is made, the developer will have to operate within a set of conditions, terms and timescales. It is supported by a bond or cash deposit calculated by the Highway Authority, and based on the works proposed. This bond or cash deposit can be called upon if the developer goes into liquidation or otherwise defaults on their responsibilities.
The Section 38 Agreement may contain:
- Details of the relevant planning permission
- Details of the bond or cash deposit
- Drawings indicating the extent of the area to be adopted
- Technical drawings of the works
- A programme for the works and for the adoption
- Provision for inspection and certification of the works
- Agreement regarding the adoption of supporting structures if these are to be adopted
A Section 38 is often entered into agreement along with a Section 278
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