Section 98 Agreement Bond (Water Industry Act 1991) - Sewer Requisition
It is the duty of the water company to provide a public sewer for domestic purposes if required to do so by the requisitioner. This agreement is detailed under Section 98 of the Water Industry Act 1991.
The water company is responsible for the design, construction and maintenance of the sewers or lateral drains.
Requisitioners can be developers, owners/occupiers and local authorities and these parties are liable for 100% of the total cost of the works.
Under a Section 98 Agreement, the requisitioner will agree to meet the annual deficits on the sewer for 12 years following the provision of the public sewer, in which a reasonable guarantee in the form of an S98 bond or cash is required. This can be paid in either a 12-year repayment agreement or a commuted lump sum.
Once all the remaining invoices have been paid, the bond can then be cancelled or the cash returned.
2. Section 104 Agreement Bond (Water Industry Act 1991) - Sewer Adoption
These agreements are entered into by developers to provide a legal vehicle to enable the status and responsibility of new sewer networks to be transferred from them to the statutory water company, providing they have been constructed to the required specification and standards.
The relating Section 104 Agreement bond is calculated at 10% of the estimated construction cost of the sewers (33% in Wales).
3. Section 185 Agreement Bond (Water Industry Act 1991) - Public Sewer Diversion
These agreements are entered into by developers where it has been identified that a public sewer is compromising the viability of a development project and the developer wishes to divert or alter the route of an existing adopted public sewer.
The relating Section 185 Agreement bond is calculated at 100-110% of the estimated construction cost to undertake the works and provides a financial guarantee that the developer will undertake the works to the water company’s requirements.