Section 104 and Section 102 Agreements: A Developer’s Guide to Sewer Adoption

A Section 104 agreement is the mechanism that gets a development's new sewers taken over and maintained by the water company. A Section 102 agreement does the same job for sewers that already exist. Both sit in the Water Industry Act 1991, and for anyone building more than a single house in England they settle something that outlives the build itself: who owns and maintains the drainage once the diggers have gone. Get a Section 104 agreement in place and the sewerage undertaker inherits the pipes, the liability and the maintenance bill. Miss it, and that responsibility stays with the site, its owners, or a private management company for good. It is why the surface water drainage strategy and foul drainage design behind an application should be built for adoption from the outset, not retrofitted once the layout is fixed.

Adoption decides who is responsible for a development's sewers for the rest of their working life, and whether that cost lands on the water company or on the people who buy your homes.

The two sections answer the same question from opposite ends. Section 104 is arranged in advance, before the sewers are built. Section 102 is used afterwards, for pipes that are already in the ground. This guide explains what each one is, how the process works, what it costs, and the part that catches most developers out: the sustainable drainage that the water company will not adopt at all.

What are Section 104 and Section 102 agreements?

Both are routes to sewer adoption, the point at which a private sewer becomes a public one and passes to the regional water and sewerage company. The difference is timing. A Section 104 agreement is a forward-looking contract: a developer agrees to build new sewers to an adoptable standard, and the undertaker agrees to adopt them once they are finished and signed off. A Section 102 application deals with sewers that are already built and operating, asking the undertaker to take on infrastructure that was never adopted at the time.

The distinction matters because it changes the evidence, the cost and the risk. Under Section 104 the standard is fixed up front and the work is inspected as it goes in, so it pays to have the drainage designed for adoption before the layout is set. Under Section 102 the undertaker is being asked to adopt something it never watched being built, so it will want proof the pipe is sound and may require remedial work before it agrees.

Section 104: adopting new sewers

A Section 104 agreement is a written contract under section 104 of the Water Industry Act 1991 between the person building the sewers and the sewerage undertaker. The undertaker commits to adopt those sewers once they are completed to the agreed standard. The Act lets the developer, or a person funding the construction, ask the undertaker to enter into it, and it makes the promise binding on the undertaker:

In practice it is the standard route for any scheme that builds shared foul or surface water sewers intended for the public network. The agreement is signed, and a bond or other security lodged, before construction starts, because the undertaker is agreeing to inherit assets built to its own specification. The Code for Adoption is clear that no adoptable sewer should be built until every party has signed. The process runs in a clear sequence:

1. Pre-application discussion. Talk to the water company early, confirm capacity and the point of connection, and agree the design principles before the layout is fixed.
2. Design submission. Submit the drainage design and supporting calculations for a technical check against the Design and Construction Guidance.
3. Agreement and bond. Sign the Section 104 agreement and lodge the security bond before any adoptable sewer is built.
4. Construction and inspection. Build the sewers to the agreed standard, with the undertaker inspecting the work as it goes in.
5. Provisional certificate. Receive a provisional certificate of adoption once construction passes inspection.
6. Maintenance period. Maintain the sewers through a rectification period, commonly around twelve months, during which defects are your responsibility.
7. Vesting. On satisfactory final inspection the undertaker issues a declaration of vesting and the sewers become public.

Section 102: adopting existing sewers

Section 102 of the Water Industry Act 1991 lets a sewerage undertaker declare that an existing sewer, lateral drain or sewage disposal works vests in it, transferring ownership from private hands to the public network. The owner of the pipe can apply for that declaration, or the undertaker can propose it itself. It is the route used when a sewer is already built and operating but was never brought into an adoption agreement, usually because a Section 104 was never put in place, or a scheme was built out before adoption was settled.

The undertaker does not have to say yes. Before it declares a sewer vested, the Act requires it to weigh a defined set of considerations:

• Adaptability to the wider system. Whether the sewer is adaptable to the general sewerage of the area.
• Where and how it was built. The location and manner of construction of the sewer.
• How much it serves. The number of buildings the sewer serves or is likely to serve.
• Construction quality. Whether the sewer was built to a sound and adoptable standard.
• Detriment to the owner. Whether adoption would be seriously detrimental to the owner.

A Section 102 declaration cannot be made for a sewer completed before 1 October 1937, and the undertaker must give at least two months' notice before a declaration takes effect. An owner who disagrees with the decision has a right of appeal to Ofwat, the economic regulator. Because the undertaker is being asked to adopt a pipe it never watched being built, a Section 102 application usually turns on condition surveys, and the applicant normally pays for any remedial work needed before it is accepted.

Most private sewers and lateral drains connected to the public network transferred to the water companies automatically on 1 October 2011, so Section 102 today tends to deal with newer or isolated private infrastructure built since that transfer.

The Code for Adoption and adoptable standards

Since 1 April 2020, sewer adoption across England has run to a single national framework: Ofwat's Code for Adoption Agreements, and the Sewerage Sector Guidance that sits beneath it, including the Design and Construction Guidance. Together they replaced the long-standing Sewers for Adoption 7th edition, and they set out the model Section 104 agreement, the application process and the technical standard a sewer must meet to be adoptable. The Design and Construction Guidance has since been updated, with version 2.2 in effect from 1 July 2022.

The Code standardised a process that used to differ from one water company to the next, but it did not widen the range of drainage the undertakers will adopt.

That second point is where sustainable drainage runs into trouble. The framework brought in common documents, service levels and an industry adoption panel, so a developer working across several undertakers meets broadly the same requirements each time. What it left untouched was the line between the piped systems a water company will take on and the surface features it will not.

Bonds, timescales and what adoption costs

There is no national price list for adoption; each water company sets its own fees. A Section 104 agreement carries three main costs:

• Application and design-check fee. Charged for reviewing the drainage design against the adoptable standard.
• Security bond. Protects the undertaker if the developer fails to finish the works, typically set as a percentage of the estimated construction cost, sometimes with a fixed minimum. Thames Water, for example, requires a bond of £5,000 or 10% of the estimated construction cost.
• Building to the adoptable standard. The cost of constructing the sewers to the specification the undertaker will accept in the first place.

Timescales are the part most often underestimated. The maintenance or rectification period runs after construction, not before, and vesting only follows a satisfactory final inspection at the end of it. Add the pre-application discussions, the design check and the agreement itself, and adoption is a process measured in months, running on its own timetable alongside the planning application rather than inside it.

Build the adoption timetable into your programme from the start, because the maintenance period alone commonly adds around twelve months between finishing the sewers and the water company taking them over.

SuDS, roads and what stays private

This is the trap. A Section 104 agreement adopts piped sewers, but it does not adopt most of the sustainable drainage a modern scheme must now build to the 2025 National Standards for sustainable drainage. Above-ground SuDS features such as swales, detention basins, ponds and permeable paving generally fall outside what water companies will take on under the Design and Construction Guidance, and there is no automatic public body waiting to adopt them instead. In England, Schedule 3 of the Flood and Water Management Act 2010, which would have created SuDS Approving Bodies with a duty to adopt approved systems, has still not been commenced, so the adoption gap remains open.

Of around 170 SuDS adoption applications made to the six largest water companies over three years, only three succeeded, according to Home Builders Federation research published in October 2025.

The result is that surface water features on a new development frequently end up with a private management company, funded by an estate charge on the homeowners. That charge is now the norm. The Competition and Markets Authority found roughly 80% of new homes from the major builders carry estate management charges, averaging about £350 a year, largely because the SuDS, and sometimes the roads and sewers, are never adopted. The Independent Water Commission led by Sir Jon Cunliffe recommended in July 2025 that the government finally commence Schedule 3. Until it does, adoption has to be planned asset by asset, which is where a drainage strategy that designs for adoption from the start earns its keep.

Where sewer adoption fits your planning and drainage strategy

Adoption and planning are separate regimes, and a Section 104 or 102 agreement is not part of the planning application. Three things run in parallel. Planning permission establishes that a scheme is acceptable in principle. The right to connect to the public sewer sits in section 106 of the Water Industry Act 1991, confirmed by the courts in Barratt Homes Ltd v Welsh Water. Adoption then decides who maintains the pipes afterwards. Each has its own fees and timescales, and each involves the undertaker in a different way, which we set out in our guide to how water companies fit into the planning process.

A drainage strategy that quietly assumes adoption the water company will never grant just stores up a problem for later.

They are still linked in practice. The drainage strategy that supports a planning application should already anticipate how the finished system will be owned and maintained. Getting it right means two things: designing the drainage to an adoptable standard where adoption is the aim, and being honest at the outset about the parts that will stay private. Settle the maintenance and cost picture before homes are sold, not after. If you are working out how your scheme's drainage will be built, owned and maintained, Unda can prepare the surface water drainage strategy and foul drainage design that reflect the real adoption position, and align them with the flood risk assessment your application needs.

Frequently asked questions