Housebuilder Top Tip - March 2015
Published 3 March 2015
Commuted sum payments under highway agreements are lawful so says the Court of Appeal.
Developers can be liable for the on-going and future highway maintenance work even after a road has been adopted and is "maintainable at the public expense" following a recent Court of Appeal decision. The Court decided in Redrow Homes v Knowsley Metropolitan Borough Council that Redrow was obliged to pay a commuted sum figure of £39,000 towards the future maintenance of street lighting after the adoption of an estate road.
Going forward, developers should begin negotiating highway agreements in the development process as soon as a detailed scheme is in place and pay close attention to what the relevant local authority policy is on highway maintenance.
A more risk-averse developer might consider negotiating with the selling landowner to make a contract conditional on a "satisfactory" highways agreement being entered into, or to provide for a price adjustment post highways agreement being entered into to ensure the development remains commercially viable on the basis of any charges or maintenance obligations that may be imposed.