A Section 104 agreement is the legal mechanism under the Water Industry Act 1991 by which new sewers on a development are adopted by the local sewerage undertaker. For any developer building more than a handful of plots, or any commercial scheme with significant drainage, the Section 104 agreement is the route by which your new sewers become the water company’s problem rather than yours.
This guide explains what a Section 104 agreement is, what it covers, and how to navigate the process. For the full step-by-step walkthrough, see our Section 104 adoption process guide.
What Section 104 Actually Is
Section 104 of the Water Industry Act 1991 allows a developer to enter into an agreement with the sewerage undertaker (the water and sewerage company serving the area) under which the company agrees to adopt the new sewers once they are built and meet the adoption standards.
Without a Section 104 agreement, the new sewers remain privately owned. Ownership of private sewers is a significant long-term liability, and most housebuyers’ solicitors will flag private sewers as a conveyancing risk.
With a Section 104 agreement, the sewers pass to public ownership on completion and the developer is released from liability for their ongoing maintenance.
What Gets Adopted
A Section 104 agreement typically covers:
Foul water sewers serving two or more dwellings.
Surface water sewers serving two or more dwellings, provided they drain to an adoptable outfall.
Sewer rising mains and pumping stations (subject to specific design standards).
Shared private drains that serve multiple plots on the development.
Site-specific private drainage that serves only one plot is not adoptable and remains in private ownership. Our clean water vs foul drainage explainer sets out which networks go where on a typical site.
The Application Process
The Section 104 process broadly follows this sequence.
One. Pre-application consultation with the water company, discussing the proposed development and drainage strategy.
Two. Submission of detailed design drawings and calculations to the water company’s adoption team.
Three. Technical review by the water company. Any issues are raised and addressed.
Four. Issue of a draft Section 104 agreement for the developer’s legal review.
Five. Signing of the agreement before construction begins.
Six. Construction of the sewers to the approved design, under the water company’s inspection regime.
Seven. Completion certificate issued by the water company after testing and snagging.
Eight. Bond release (if a bond was required) twelve months after the completion certificate.
The Bond
For most Section 104 agreements, the water company requires the developer to provide a bond (a financial guarantee) equal to the cost of completing and rectifying the sewer works if the developer fails to finish them.
Bonds are typically held for twelve to twenty-four months after completion. Some water companies now accept parent company guarantees as an alternative to cash bonds.
Bond values are usually 100 to 120 per cent of the sewer construction cost and can be a substantial cash flow item for a developer.
Adoption Standards
Water companies publish their own design and construction standards, but they broadly align with Sewers for Adoption (SfA) 7 (in England and Wales) and similar standards elsewhere. Key requirements include:
Minimum pipe sizes (usually 150mm for foul, with surface water sized for flow).
Minimum cover depth.
Gradients within acceptable ranges.
Manhole spacing and construction.
Testing to agreed pressure and CCTV standards.
Any deviation from the standards must be agreed in advance. Unapproved deviations discovered during inspection are a common cause of delay.
Fees and Charges
Section 104 agreements attract several fees:
Application fee: typically £1,500 to £5,000, paid on submission.
Inspection fee: charged per metre of sewer or per plot, often £150 to £400 per plot.
Bond administration: typically £500 to £2,000.
Commuted sums: payments for the long-term maintenance of specific features (for example, pumping stations).
Total Section 104 fees on a typical 100-plot development run £30,000 to £80,000.
Timelines
Pre-application to signed agreement: usually ten to twenty weeks.
Construction on site: aligned with the build programme.
Adoption inspection and completion certificate: six to sixteen weeks after construction completes.
Bond release: twelve to twenty-four months after completion certificate.
Common Pitfalls
Late engagement. If the Section 104 application is raised at RIBA stage 5, the timeline becomes tight and design revisions can delay construction.
Non-adoptable elements included in the application. Items like private connections or drainage from single dwellings are not adoptable, and including them in the application causes rejection.
Inadequate testing records. The water company requires comprehensive pressure tests, CCTV surveys, and manhole inspections. Poor record-keeping during construction can block adoption.
Unapproved design variations. Changes to pipe runs, gradients, or manhole positions made on site without approval are a frequent source of snagging.
What Good Looks Like
A well-run Section 104 process starts with pre-application consultation at RIBA stage 3, detailed design submission by stage 4, agreement signature before construction begins, and clean inspection records from day one of build. Adoption follows routinely within a few months of construction completion.
Done well, the developer forgets about the sewers six months before practical completion. Done badly, adoption drags on long after the last plot is sold and the bond is still outstanding.
The Bottom Line
Section 104 agreements are standard practice in UK residential development and most commercial schemes with multiple plots or buildings. The process is well-defined and the outcomes are predictable if you engage early and build to the published standards. The worst outcome is an application rejected after construction is complete, which leaves the developer with privately-owned sewers and a long adoption battle. Avoid that by starting the Section 104 conversation at the same time as the new water mains design, not after it. Developers of housing and high-rise residential schemes tend to get the best results when Section 104 is part of the masterplan from day one.