RS Bonds Surety - Highway / Road Bonds

Our primary role is to work with housebuilders and developers to assist them in satisfying the Adopting Parties bond requirements in relation to the following Legal Agreements:

  • Section 38 Agreement Bond (Highways Act 1980)
  • Section 278 Agreement Bond (Highways Act 1980)
  • Section 220 Agreement Bond (Highways Act 1980)
  • Scottish Road Bond (Security For Private Road Works Regulations 1985)

Our exclusive commitment and expert knowledge of the Highway / Road Bonds market means we can add value and provide more favourable terms than elsewhere achievable in the general surety or insurance markets.

Section 38 Agreement Bond (Highways Act 1980) – Adoption of a New Highway

These agreements are entered into by Developers to provide a legal vehicle to enable the status and responsibility of a new road(s) to be transferred from them to the Local Authority, providing they have been constructed to the required specification and standards.

The relating Section 38 Agreement bond enables the Local Authority access to funds to satisfy the Developers outstanding obligations, should they default on the particulars of the agreement.

Section 278 Agreement Bond (Highways Act 1980) – Alteration to a Public Highway

As part of planning permission, a Developer may be required to enter into a Section 278 Agreement bond which obliges them to undertake modifications or improvements to the existing highway to account for the impact of the new development. The nature of the types of works a Developer is required to undertake as part of a S278 agreement include:

  • Construction of new junctions, with and without traffic lights
  • Construction of roundabouts
  • Construction of cycle lanes or improved footpath network
  • Construction of traffic calming measures (Speeds humps, road narrowing, etc)
  • General improvements works (Street lighting, resurfacing works, etc)

The relating Section 278 Agreement bond enables the Local Authority access to funds to satisfy the Developers outstanding obligations should they default on the particulars of the agreement.

Section 220 Notice (Highways Act, 1980) - Advanced Payment Code

An advanced payment code is a legal notice that a Local Authority serves on a Developer. This requires the Developer to secure a surety bond to cover the estimated cost to construct a highway on a development.

This bond is only cancelled when the Local Authority are satisfied a new highway has been constructed to acceptable standards or a Section 38 Agreement is entered into, in which case the bind is often transferred as the associated.

Scottish Road Agreement Bond (Security For Private Road Works / Scotland / Regulations, 1985)

A Scottish Road Agreement bond is a financial guarantee provided by a Bondsman to the Adopting Party (Scottish Local Authority) before work can begin on a housing development.

This surety bond provides a guarantee to the Scottish Local Authority that the road will be completed to an adoptable standard.

A Developers inability to comply to the standards agreed in the Scottish Road Agreement bond will allow the Scottish Local Authority to secure a sum of money off the Bondsman (calling in on the bond), necessary to fund the completion or rectification of the road.