How do Section 278 Agreements work?

Highway infrastructure is often a critical component of any proposed new housing development, and these agreements, which form part of the Highways Act 1980, are used to make changes to an existing public highway. The need for highway agreements is often identified within a Section 106 Agreement or in the decision notice as a pre-commencement or occupation condition.

Where a developer is required to undertake highway works in association with their development, their planning consent will require them to enter into a highway agreement to carry out the works.

How the process operates

The layout of the development is established at the planning stage, including the type of junction required to provide access onto the public highway, together with the proposed configuration of any internal roads. Once planning permission has been obtained, the Local Planning Authority cannot refuse to enter into an agreement for the developer to carry out the highway work required to facilitate their development, provided that all appropriate design and safety standards are fully met and complied with.

Typically, these legally-binding agreements cover infrastructure projects providing access into a development site, such as roundabouts, signalised junctions, right-turn lanes, new pedestrian crossings, or priority junctions. They can also cover utilities diversions, drainage systems and street lighting.

The costs involved

The developer is responsible for meeting all costs associated with the design and implementation of Section 278 Agreements. The developer will also be required to deposit a bond to cover the cost of the highway alterations, meaning that if they fail to carry out the work satisfactorily, the bond can be called upon to complete the project.

Where the proposed infrastructure will require ongoing maintenance, the agreement process provides for a commuted sum to be secured to fund the work.

What these agreements cover

They typically include:

• Details of the planning permission under which these works will be carried out
• A detailed schedule of works to be undertaken
• Details of the bond or surety required
• Details of who will design or project-manage the work, usually either the local Highway Authority or a consultant Highway Engineer working on behalf of the developer
• A full schedule of the costs of the works to be paid for by the developer, together with the administrative, design and inspection costs payable
• Details of commuted sums for future maintenance.

Section 38 Agreements

Section 278 Agreements are often entered into alongside Section 38 Agreements. The latter enable developers to ask the Highway Authority to ‘adopt’ new roads created within a new development, along with associated infrastructure such as drains and lighting. Adoption means that the Highway Authority agrees to take over maintenance from a stipulated date. The planning consent will usually include an indication of any roads that will need adopting.

How we can help

We have particular expertise in acting for landlords and developers in Section 278 and Section 38 Agreements, and can assist in the drafting, reviewing and negotiation of these documents. We know that there can often be time pressures on completing these agreements, as they have a direct impact on the progress of the development, and we recognise the need for prompt action.

Salvatore Amico, Associate and Head of Town & Country Planning has this advice to offer: “These agreements require a thorough and detailed approach. The specifications relating to any highway works and the conditions attaching to any bonds need to be exact and precise. We always seek to protect our clients’ interests and ensure their obligations are clear, so that there is no scope for disagreement at a later date. In addition, land ownership or title issues are also common features of these agreements, and we offer the expertise needed to handle them.”