News & Insights

What is a Section 38 Agreement?

Lauren Walker, an associate in our Real Estate team, explains what a Section 38 Agreement is and why they are used.

Section 38 of the Highways Act 1980 is used when a developer wants to construct a new estate road for industrial, residential or general traffic that may be offered to the highways authority for adoption as public highway. This can also include any associated infrastructure such as drainage, lighting and supporting structures.

Adoption of public highway is where the highways authority agrees to undertake the maintenance of a road from an agreed date at the public expense. The highways authority will require that any such roads are built to a required standard, such standard will depend on the local authority as each local authority is different.

Before entering into a section 38 agreement, the developer must have obtained planning permission, including approval of any reserved matters. The planning permission will generally include an indicative layout of the roads to be adopted.

A section 38 agreement may contain provisions relating to any or all of the following:

  • Details of the planning permission
  • Drawings showing the extent of the land to be adopted
  • Provision for land dedication
  • Technical drawings of the works to be carried out
  • A programme for the works and for the adoption of the roads once complete
  • Provision for inspection and certification of the works
  • Agreement regarding the adoption (or not) of supporting structures.

The agreement will also usually provide for any fees associated with the agreement to be paid by the developer. This may include fees for producing the agreement, any inspection fees, ongoing maintenance and any costs associated with checking designs. The agreement may also require for a bond from the developer to cover the highways authority against any possibility that the developer fails to carry out the works or fails to carry the works out to the required standard for adoption or fails to maintain them during the agreed initial maintenance period (often 1 year). The highways authority can then use the bond to remedy any breach by the developer.

If you require any assistance with a section 38 agreement, please do not hesitate to contact our Real Estate team who would be happy to assist.

This article forms one of a series of planning articles we have released. Please see the other related articles as follows: