The Property Ombudsman has recently been contacted by Northern Ireland Water to inform us of a case whereby an Article 161 Agreement became invalid because it was not transferable. Below is the case study and information on the appropriate course of action in this situation:
- A property was previously owned by Developer1.
- Developer1 had taken out an Article 161
- Agreement with Northern Ireland Water Ltd in respect of the sewers for the above property
- Developer1 subsequently ceased trading
- Developer2 has now acquired the above property.
The Article 161 Agreement which was taken out by Developer1 was not transferable.
- Developer2 does not therefore have the benefit of this Article 161
- The above property is therefore in the same position as a property in respect of which no Article 161 Agreement has ever been
- It will therefore be necessary for Developer2 to enter into a fresh Article 161 Agreement in respect of the above
Under Article 166 of the Water and Sewerage Services (Northern Ireland) Order 2006, it is a criminal offence to cause a drain or sewer to communicate with a public sewer in the circumstances set out in that article.
What do in this scenario
If you are asked to act in the sale of a new-build property where the Article 161 Agreement is not in the name of the developer selling the property, you should advise the developer of the need to procure such an agreement.
- If the sale of a new-build property is agreed where the Article 161 Agreement is not in the name of the developer selling the property, this is likely to prevent or delay completion of the sale, and thus payment of your fees.
- Emphasise to all solicitors that their duties are owed not only to the purchaser of the property but also to the lender and that, as a result, they should not comply with any instructions from a purchaser who is taking out a mortgage, to proceed with a purchase in the absence of such an Agreement.