Many section 106 agreements impose requirements for Registered Providers (RPs) to enter into a S278/38 agreement under the Highways Act. This agreement ensures that the roads serving the properties on a development are dedicated as public highways. But if this is delayed, it can have the knock on effect of delaying occupation of the units on the scheme. Not good news if buyers are lined up with mortgage offers ready to go and the developer cannot obtain pre-occupation sign off without the Highway’s Agreement in place. It is the case that, the highways works cannot commence until a Highways Agreement has been entered into – which can cause even further delays.

How can RPs mitigate against delays?

In certain circumstances, an RP may be able to persuade a council to issue a letter confirming that the pre-occupation condition relating to the Highways Agreement is waived. However, in most circumstances a council will be reluctant to issue a waiver letter and / or applying for and issuing a waiver of a condition can take time in itself, which both the RP and the council will be keen to avoid.

The case of DB Symmetry Ltd and another v Swindon Borough Council [2022] UKSC 33 concerned a condition attached to an outline planning permission that read as follows:

“The proposed access roads, including turning spaces and all other areas that serve a necessary highway purpose, shall be constructed in such a manner as to ensure that each unit is served by a fully functional highway, the hard surfaces of which are constructed to at least base course level before occupation and bringing into use. Reason: to ensure that the development is served by an adequate means of access to the public highway in the interests of highway safety”.

The principal issues for the court were the vires and correct interpretation of the condition, and whether the wording of the condition required dedication of the access road as a public highway.

While the Supreme Court confirmed a long-established principle (in Hall & Co Ltd v Shoreham-by-Sea Urban District Council [1964] 1 WLR 240) that planning conditions cannot be used to require a landowner to dedicate land as a public highway and that any condition which purports to do so is ultra vires, it determined that the condition in question was a valid planning condition that did not purport to require the dedication of the access roads as public highway. It was a condition addressing the need for the access roads to be constructed before the development was occupied. It did not seek to ensure that there was a public highway through the site.

The position remains that if it is important that new roads within a development become adopted highways then this requirement must be secured by a s.106 agreement (or other form of legal agreement), although it would be usual for a condition to also be imposed on planning permission that included a trigger for when “highway works” need to be completed by, for example pre-occupation.

A reference to “highway works”, or undertaking works to “an adoptable standard” in a condition will not, per DB Symmetry, ordinarily be interpreted as a requirement for a developer to dedicate land as a highway, or publicly maintainable highway (so making the condition ultra vires), provided the context of the condition is clear.

It is important for both RPs and developers to consider the implications of pre-occupation conditions (and the consequences of not discharging them in time) at the earliest opportunity to avoid further costs and time being expended later down the line (e.g. renewing mortgage offers, aggrieved plot purchasers etc). Early engagement with the council is a key factor to ensuring that the conditions are met and discharged in good time.

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With over 12 years experience advising the affordable housing sector, Anita is a Legal Director specialising in property development and regeneration for registered providers, focusing particularly on development site acquisitions, site assemblies and stock disposals.

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Published: 9th November 2023
Area: Social Housing

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