BIM51645 - Builders, property dealers & developers: Private street works: England and Wales

The Highways Act 1980 provides that where a building is to be erected on land fronting on a private street, the owner of the land shall, before building commences, pay or secure to the local authority a sum equal to the estimated cost of the street works. The benefit of any amount so paid or secured passes with the ownership of the land. Where the amount paid or secured proves to be in excess of the actual cost of the street works, the excess is refunded or a corresponding part of the security released. Similarly, if the building is not proceeded with, the whole of the amount paid is refunded or the security released provided that the street works have not been carried out.

The Act further provides that the local authority is to allow interest on amounts paid to it at a rate fixed by the Treasury, the interest to run from the date of payment to the date the street is taken over, or to the date it is decided not to proceed with the building. The interest is added to the amount paid and dealt with as if it formed part of that amount. Thus where the actual cost of the street works exceeds the amount paid, the whole or part of the interest is appropriated by the local authority and applied towards that cost.