Your Development Project v Covid-19
If you are involved in a development project, whether it be as a landowner, developer or investor you are now likely to face some unforeseen delays for reasons beyond everyone’s control.
We would normally expect contracts between the parties (whoever that may be) to set out some specific timescales to make sure everyone does what they say they will do within the timescales they say (with a bit of wriggle room for some common overruns). These timescales, quite often linked to planning consents, may now be unachievable.
At the best of times development projects can take years. The time taken obtaining planning consent usually plays a large factor in this.
We are now seeing that planning committees have been cancelled in many areas so if you have larger or more complicated applications this will now mean your applications are delayed considerably. Decisions made with delegated powers at a planning officer level are likely to see delays while planning officers adapt to working from home.
Some parties will look to exploit the situation whereas others will continue to want to work together to find solutions.
For those who want to work together, as is common in development projects, now is the time to communicate with each other, have a sensible conversation and agree some variations. This may be extending a termination date in a contract or option agreement or something as simple as relaxing some of the wording so that, rather than a categorical “you will do…” the parties will “do their best” with complying with certain obligations. Most agreements allow you to make alterations provided they are in writing and signed by everyone concerned.
For those who do not want to perform a contract, what are your options?
If you have an unconditional contract then, under the standard sale conditions you are unlikely to be released from your obligations.
Can you rely on “force majeure”?
These generally excuse one party from performing a contract if faced with certain circumstances beyond their control. Unfortunately, these are not that common in property contracts.
You could look to strictly enforce the performance of other obligations that are, in the circumstances, now very difficult to comply with. The obvious example is the obtaining of planning consent by a certain date. If you fail, then the Contract is terminated. If the planning committee is not sitting for a period or if the planning officer is unavailable due to isolation, then it will be very difficult to achieve this.
Every development project and contract is different so the message is to communicate with everyone involved. Importantly, you need to consult with your professional team to fully understand your position and any obligations that you are faced with. You can then assess what, if anything, needs to change…and also consider if you want it to change.
If you have any queries or would like any advice on this topic, please do not hesitate to contact Tony Dupreez on 01752 203500 or email tony.dupreez@GAsolicitors.com