Buying a Road?

[CateringPanic]

My road and some of the roads surrounding it is being sold at auction. Based on the guide price, a neighbour/friend and I could afford to buy it together without much issue. Part of me thinks this is a good idea because I would rather own it than someone else…but is there any reason not to?

I’m assuming there is a certain amount of liability around maintenance/fixing potholes etc

Are you in the UK? I’ve never heard of roads being sold at auction here.

Most roads (and pavements) are owned by the council (who are responsible for maintaining them), or by the developer eg: a new build estate where the management company owns and is responsible for their upkeep, and residents usually pay a maintenance fee to cover these costs, or there are private roads where the residents are responsible for maintenance costs.

You would be responsible for drains/ drainage as well as the road surface, and possibly street lighting. There may be minimum requirements for keeping the road in a good condition. How would you pay for future maintenance?

You could also be liable for damage caused to cars by driving over a pothole for example (the council I work for has had to pay out for this).

Based on my experience working in a council highways department, a road doesn’t seem like a good investment to me - they mostly need repairs!

This is about minimising your liabilities not gaining an asset.

Check your deeds. Do you have an obligation to pay an annual fee to the owner of the road for repairs and maintenance and how much control does the owner have over that amount?

If you don't have to pay anything then who does?

Owning the road is a gamble - can you get away with spending less on repairs and maintenance each year than the amount of income you get for maying for it. The more you can get in and the less you pay out the more worthwhile it is.

If someone else buys this road then they are betting that they can screw more out of you and other payers in ongoing fees than they ever have to outlay. If you buy it and end up spending less on maintenance than the fees would have been then you are at a slight advantage but you've locked away a big slice of your capital to gain that advantage. Whether its bought by you or a stranger it will be a very long time before any profit exceeds the price of the road.

If you buy with a neighbour how will you resolve any difference of opinion about what to spend on repairs and maintenance?

I live on an unadopted road. There are no streetlights (which is fine by us) but all 9 households are responsible for the upkeep. Depending on the number of cars each household has we pay a monthly amount into an account managed by one of the neighbours, who also manages the road repairs. It works for us, except our direct neighbours had an unwelcome surprise when they discovered their predecessors had not paid into the fund and they were liable. The arrangement is very much dependent on goodwill. If there is a legal way to set up some sort of cooperative to manage both the contributions and the liability for costs I would do it.

@EllieQ I’ve never heard of it either but yes I am in the UK. I live on what was a new build development 30 years ago so I’m wondering if it still owned by the developer or something.

That’s interesting - I’d assume the roads were owned by the developer or a management company that has been set up, as that is the usual arrangement for ‘new’ developments. Are they selling all the roads in the development?

I’d add to @YireosDodeAver comment about costs vs income that the cost of highways maintenance work (repairs, resurfacing, drainage) has really increased over the past couple of years - both the costs of materials and labour. Hence your costs (required maintenance work) could be unsustainable against any income received.

What are you hoping to get out of this? Owning a road seems like more of a liability than an asset.

I cant see an upside to this at all. You have to lay out money to buy the road then you have to pay out for the upkeep of the road. Where does any income come from?

When someone wants to buy it or put a mobile phone mast on it - that’s when you could make miney

Request the legal pack.
Read it.
Get scared shitless by the liabilities.
Research the costs of road maintenance.
Realise the hassle you'll get from the neighbours every time there's a pothole.
Reach a sensible conclusion and buy a pony instead.

(For those wondering, the road will come with an income from the Estate Charge)

It’s less about making money and more about stopping someone else buying it and doing something we don’t want done eg. Selling as access to a developer to build more houses on the playing field but no I don’t want it to be a money pit!

This isn't technically correct. There's a difference between owning the subsoil of an adopted road (not liable for maintenance) and owning and being responsible for various rights of way etc. You need legal advice on the title before proceeding to know what you actually would be buying

If the road was the only means for a developer to gain access to a valuable plot then I’d be very tempted - residents in a local street did similar to a bit of road when they moved into their houses some years ago and the (not very nice, to say the least) developers are now finding themselves on a hiding to nothing, something which is giving the residents great joy as the developers didn’t realise the bit of the street was privately owned.

If there wasn’t any benefit in terms of future development possibilities then I wouldn’t.