Builders Build and Buyers Buy – Or Do They?


It is by no means unusual for building projects to overrun. When they do, a variety of things may happen.
In a recent case, a builder who was constructing 11 flats did not meet the stipulated date for completing them and the investors who had contracted to buy them served notices on the builder to complete them. When the builder did eventually finish them, the buyers did not proceed with their purchases. The seller applied to the court for ‘specific performance’ of the contracts. Specific performance is the legal term for an order of the court that one party to a contract must do what it has promised to do in the contract – in this case to complete the purchase of the flats.
The prospective buyers opposed the application, arguing that the contracts were unenforceable because a term within the agreement (which related to an additional discount arrangement) was not included and that the builder did not complete the flats within a reasonable time.
The court found that the contracts had not been rescinded by the buyers and that the non-inclusion of the additional discount term in the contracts had been at their request. Although the builder was in breach of his contractual obligations, the delay in completion was not serious enough to justify the argument that it constituted a repudiation of the contracts by the builder. The buyers were therefore contractually bound to buy the flats.
Says <<CONTACT DETAILS>>, “This case may come as a disappointment to buyers seeking to extract themselves from contracts to purchase properties under construction entered into at a time when property prices were stable or rising.”
If you have problems with a building contract, contact us for advice.

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