What Are the Key Stages of a Road or Sewer Bond?
When you are doing work on a highway or sewer system, you will need to take out a road and sewer bond if you wish to transfer responsibility of the road or sewer to the local authority or water company. This blog will discuss the requirements of a road and sewer bond, and how you can make sure you meet them.
Which Road or Sewer Bond Do You Need?
Depending on the site infrastructure that is being completed, there are different bond requirements. The most frequently procured highway bonds include:
- Section 38 Agreement Bonds (used for the construction of new roads)
- Section 278 Agreement Bonds (used for highway improvements or alterations, traffic management measures, and road closures or diversions)
- Section 184 Agreement Bonds (used for construction of vehicle access points, works affecting public highways, and reinstatement of highways)
- Section 220 Agreement Bonds (used for private roads connecting to public highways, damage or impact on public highways, and ensuring safe access to public roads)
For Scotland, the two main highway bonds are Section 21 Agreement Bonds and Section 56 Agreement Bonds. In Northern Ireland, the road and highway bonds are Article 32 and Article 24.
The most frequently procured sewer bonds include:
- Section 104 Bond (used for developers who are constructing or improving sewerage infrastructure that a water and sewerage company will adopt)
- Section 185 Bond (used for diverting or altering existing sewers that may interfere with a new development or construction project)
- Article 161 Bond (This provision outlines the process and conditions under which private sewers or drains can be adopted by a public sewerage company in Northern Ireland)
The Lifecycle of a Road Bond
In England and Wales, the type of Road or Highway Bond required can vary depending on the specific infrastructure works being undertaken. Below is an example of a typical road bond lifecycle:
Agreement: The developer enters into a Section 38 Agreement with the local authority, which outlines the specific roadworks to be completed and the required standards.
Issuance of Bond: To guarantee the satisfactory completion of the work, the developer arranges for a Section 38 Bond, which is often issued by a surety company. The bond amount is typically based on the estimated cost of completing the roadworks.
Completion of Works: The developer constructs the road according to the plans and to the standards specified in the Section 38 Agreement.
Inspection and Adoption: Once the roadworks are completed, the local authority inspects the roads to ensure they meet the required specifications. If the works are satisfactory, the roads may be formally adopted by the local authority, and the bond is released.
Failure to Complete: If the developer fails to complete the works or does not meet the standards set in the agreement, the local authority can call on the bond to fund the completion or rectification of the roadworks.
Key Considerations:
- The bond is a guarantee that the roads will be completed and meet the necessary standards before they are adopted by the local authority.
- The bond value is typically based on the estimated cost of the roadworks.
How Do Sewer Bonds Differ?
Sewer Bonds are a type of surety, which can vary depending on the type of sewerage works being undertaken. The most frequently requested Sewer Bonds are:
A Section 104 Bond is typically required when a developer is constructing a sewerage system (either new or as part of a development project) with the intent that it will be adopted by the water company or sewerage authority for ongoing maintenance. The bond is required before the adoption process can take place and serves as a guarantee that all works will meet the required standards.
A Sewer Diversion Bond is typically required when the proposed development will interfere with an existing public sewer and the developer needs to reroute or alter the sewer’s path to facilitate construction. This type of bond is required to ensure that the sewer diversion works are properly carried out and that the sewer system will continue to function properly once the diversion is complete.
[H2] How RS Bonds Can Help With Road and Sewer Bonds
RS Bonds is the only company in the UK that specialises solely and exclusively in the procurement of Road and Sewer Bonds. Our mission is to procure the best value road and sewer bonds for housebuilders as efficiently as possible.
Fill in our quote request form today to find out more about how long your Road and Sewer Bond will take to obtain.
