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Flood and Water Management Act 2010

Non-performance bonds

229.Paragraph 12 explains what a non-performance bond is. When approving an application, the Approving Body may require the applicant to deposit a non-performance bond as a condition of granting approval. The value of the bond will be decided by the Approving Body, but it cannot exceed the best estimate of the most that it will cost to build the drainage system in line with the approved proposals. Sub-paragraph (6) provides for the Minister to issue guidance, to which approving bodies must have regard, about what amounts may be required for the bond.

230.If the Approving Body certifies that the drainage system has not been constructed in accordance with approved proposals or is unlikely to be completed, it may give a certificate leading to forfeit of the bond. Before doing this it must consult the applicant about whether it should do this. Once it has decided to issue a certificate leading to forfeit of the bond, it must then use the money to complete the drainage work in compliance with national standards. If any money is left over, the Approving Body must pay the remaining amount back to the applicant.

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