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 184 Agreement Bond (Highways Act 1980)
  • Section 220 Agreement Bond (Highways Act 1980)
  • Section 21 Agreement Bond (Roads Scotland Act 1984)
  • Section 56 Agreement Bond (Roads Scotland Act 1984)
  • Section 96 Agreement Bond (Roads Scotland Act 1984)
  • Article 24 Agreement Bond (The Private Streets | Northern Ireland | Order 1980/1992)
  • Article 32 Agreement Bond (The Private Streets | Northern Ireland | Order 1980/1992)

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 an 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 184 Agreement Bond (Highways Act 1980)

A Section 184 Agreement Bond is required when a person or organisation wishes to make temporary changes to the highway layout, such as verge, footway and carriageway changes, and whereby the highway layout will be returned to its original layout at the end of the period.

A Section 184 Licence deals with the formation of vehicle crossings over footways and verges, whereby a bond is used to secure any alterations made to an existing access or formation of a new access.

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 bond is often transferred as the associated.

Section 21 Agreement Bond (Roads / Scotland Act /1984)

A Section 21 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 with 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.

Section 56 Agreement Bond (Roads Scotland Act 1984)

In accordance with Section 56 of the Roads (Scotland) Act 1984, it is required that any developer wishing to execute works in the public road (including verge) must apply for a Section 56 permit and obtain Road Technical Approval. This can require a Section 56 Bond, enabling the Local Authority access to funds to satisfy the developers outstanding obligations, should they default on the particulars of the agreement.

Section 96 Agreement Bond (Roads Scotland Act 1984)

Local Authorities have a general power under Section 96 of the Roads (Scotland) Act 1984 to recover maintenance costs arising from damage caused by excessively heavy, or other extraordinary, vehicles or traffic.

The type of development where this applies are Wind Farms or major infrastructure projects. The use of the public road network by significant numbers of heavy goods vehicles and their interaction with other road users can lead to a variety of issues such as spillage, noise, dust and damage to the carriageway. The council can seek these contributions through the provision of a financial guarantee, otherwise known as a Section 96 Bond.

Article 24 Agreement Bond (The Private Streets | Northern Ireland | Order 1980/1992)

An Agreement under Article 24 of The Order provides for a developer to request that determined streets remain private. Developers should note that streets which have been determined but are to remain private under an Article 24 Agreement, must still be designed and properly constructed to the Department’s standards.

Where a Private Streets Determination forms part of a planning permission, Article 24 of The Private Streets (NI) Order 1980 (The Order) requires developers to make prior provision for street works expenses. Before commencing any building works, developers should contact Department for Infrastructure (DfI) Roads to put in place the necessary Agreement and Article 24 Bond which enables

The Department of Infrastructure access to funds to satisfy the developers outstanding obligations, should they default on the particulars of the agreement.

Article 32 Agreement Bond (The Private Streets | Northern Ireland | Order 1980/1992)

The Private Streets (NI) Order 1980 (the Order) and the Private Streets (Amendment) Order 1992 provide the statutory basis for the adoption of roads constructed by Developers.

The Order further provides for the Department (DfI Roads) to adopt the determined layout on satisfactory completion by the developer. Developers are required to enter into an Agreement with the Department so that, on satisfactory completion of the road construction, the roads become public roads.

The Agreement is normally provided under Article 32 of the Order, and can require an Article 32 bond to enable the Department of Infrastructure access to funds to satisfy the developers outstanding obligations, should they default on the particulars of the agreement.