Developer pauses work on a development

A

andycole

Registered User
Messages
150
Hi - Quick question.

What happens for buyers if a developer stops work on a development, e.g. lets go Building Site Foreman, Brick Layers, Plumbers etc..when he has still more than half of a developmen to complete?

If work stops for a period of time - weeks or months due to the downturn in the economy - would buyers be entitled to a discount due to the delay?
Or would buyers be allowed to pull out - and possibly get refunded Deposit?

Also if the Completion Period of 30 months is exceeded - would a reasonable delay include such a stoppage/pause in the building process as described above?
 
Construction contracts usually have a "long stop" date in them - this is the latest date that the developer can deliver a finished building without breaking the contract. The long stop date can often be much later than the date's builders put in sales materials. Important thing is to check the contract.
 
Is a "long stop" date part of the Building Agreement document or Conditions of Sale document? I've read through my own contract again over the weekend and nearly certain there is nothing mentioned similar to this. Generally how would a contract be worded if it includes a "long stop" date? Should there be a separate condition for this if it exists?
The Completion Period of 30 months seems the longest period of time mentioned in the contract - I don't see anything longer than this.
 
Hi andy,
It should be in your building agreement. Where have you found the reference to 30 months?
 
Its in the Building Agreement - It states 30 months from date Employer (myself )and Contractor (Builder) have signed contract.
Its called a Completion Period - and it states 30 months.

However it does state that this may be exceeded if the Builder encounters something that could be seen as a reasonable delay..
 
Andy what your quoting there sounds like a copy of the agreement between the developer and its contractor - a contract that you're not a party to.

What did you sign when you paid your deposit? You'll need to check out the terms and conditions of that agreement to see if there's a period for performance. I doubt its been rigidly defined, and it probably envisages situations like this and gives the developer some lee-way.

If the agreement doesn't state a date, then you will a right to performance within a reasonable time. There are arguments about rescission etc., that could be made - but you should check out the agreement first.
 
there seems to be some problem in general with building contracts about 'time being of the essence'.. i.e in other words, the contract isn't completely explicit on the fact that time is very important, so there's a good chance you'd lose in court, and it would be very expensive to challenge.

It would, or should be different at least, if the builder is building a sports stadium for the World Cup or something.. then it has to be done on time.
 
Any progress with this issue OP? I have a similar situation with this kinda thing at the moment. In my contracts it says all works on site to be completed within 2 years of me signing!

Its now 26 months in and they are pulling off site with at least a third of site unfinished.
 
Update -

Developer gone into examinership since early April.
This entitles the Developer to 100 days protection from creditors.

Building Progress to Date:

All work has halted on the Building Site - at present apprx. out of 6 Blocks 1 Block has people living, 1 Block complete but nobody living in this block and difficulities with getting people to close on contracts,
1 Block 2/3 completed.
1 Block just started with a little foundational work but not worth mentioning.
2 Blocks not yet started.

Legal Difficulities:

High Court petitions from two creditors to wind up the Developer over monies owed.

Examinership process through which the Developer is looking for Bank Loans due to cash flow problems.

Completion Periods for most buyers have now been exceeded. This possibly is a breach of terms of contract on behalf of the Developer. Buyers most probably will be instructing solictors that as terms of contract has been breached they wish to pull out of contract.
Deposit paid most probably lost as well.


The immediate future?

Is uncertain. Will the examiner allow buyers to pull out of contracts because the completion period has been exceed. Or will he and the Developer continue to argue that a "reasonable delay" that is mentioned in the contracts also covers the economic problems that the Developer is currently going through?

Possible Best Case Scenario?

Walk away from contract with a loss of Deposit plus associate legal expenses.
 
You must log in or register to reply here.
Back
Top