S278 Agreement Bond

Are you a developer looking to build on private land or planning to carry out major infrastructure work in the UK? If yes, then you may need to secure an s278 agreement bond.

What is an s278 agreement bond?

An s278 agreement bond is essentially a performance bond that developers or contractors are required to provide by local planning authorities. It guarantees that the developer will carry out the necessary highway works, such as road improvements, footpaths, cycleways, and other associated infrastructure. The bond works as a form of insurance, providing the council with financial security in case the developer defaults on their agreement.

Why is an s278 agreement bond important?

In many cases, developers are required to carry out infrastructure work as a condition of planning permission. Projects that impact the road network, such as new housing estates, commercial developments, and transport links, can result in a significant increase in traffic, leading to safety concerns and congestion. Local authorities, therefore, use s278 agreements to ensure that the necessary highway works are carried out before the development is complete.

An s278 agreement bond is important for both developers and the local council. It provides the developer with the assurance that they will receive their bond back once the works have been completed, and the council with the knowledge that they can recoup any costs incurred if the work is not carried out or is found to be inadequate.

How does the s278 agreement bond work?

The bond amount is based on the cost of the works, and it is typically set at 10-20% of the total cost. The developer is required to provide the bond before the start of the works, and it remains in place until the council is satisfied that the works have been carried out to the required standard.

If the works are not completed to the required standard or are not completed at all, the council can call on the bond to cover the cost of rectifying the issue. However, if the developer completes the works on time and to the required standard, the bond will be returned to them.

Final Thoughts

If you are planning to carry out infrastructure work or develop private land, it is important to understand the requirements for an s278 agreement bond. Failure to comply with the agreement can result in penalties, delays, and the potential loss of your bond. Therefore, it is essential to work with a professional and experienced team who can advise you throughout the process and ensure that everything runs smoothly.