Property Price Fall Was Foreseeable
28th March, 2013
When a firm of consulting engineers created an ‘egregious delay’ in the commencement of a building project, they found themselves liable for the losses suffered by the landowner as a result.
The firm had been appointed to design a road for the entrance to a building site in Cornwall and to arrange for it to be adopted by the local council. Planning permission had been obtained for house building on the site in 2006.
The consulting engineers were contracted to complete their work by March 2007 but delayed, not for days or weeks but for more than a year. In April 2008, the landowner instructed another firm of consulting engineers to carry out the work and the road was approved by the council shortly afterwards.
The court found that had the original firm of consulting engineers not failed to complete their work, the project would have been completed by June 2008. It was actually completed in July 2009. By that time, the value of the property had fallen by nearly £400,000.
The landowner sought compensation for the loss in value of the property, the return of the £20,000 he had paid to the consulting engineers and the cancellation of a further invoice for £2,900 they had later raised.
The Court of Appeal accepted the argument that the delay was negligent and that the fall in property prices was ‘reasonably foreseeable’. Accordingly, the landowner could bring an action for compensation against the consulting engineers.
Andrew Lees, a solicitor in Aaron and Partners’ real estate department says “Causing unreasonable delay in the completion of a contract can have unwelcome consequences and many contracts do contain clauses specifically providing for compensation in the event of a delay. If you are negotiating a contract, especially one in which ‘time is of the essence’, contact us for advice.”
For more information contact Andrew Lees on 01244 405580 or email [email protected]
You might also be interested in...
22nd November, 2018
Family Law Partner Sandy Edwards believes there is. Next week, from 26 to 30 November, Resolution, an organisation of 6,500 family lawyers and other professionals, will be promoting “Good Divorce Week” which will focus on how separating and divorcing couples can put their children’s needs first and limit the impact of conflict. The week falls during the government’s divorce... Read More »
16th November, 2018
It is reported that a quarter of all complaints dealt with by the Legal Ombudsman revolve around costs. Therefore to avoid complaints and confusion, it is important to be clear from the outset. The new Transparency Rules (which the SRA have now confirmed will come into effect on 6 December 2018) require that accurate and relevant information is... Read More »
5th November, 2018
Aaron & Partners LLP has once again seen improved rankings in The Legal 500 – a comprehensive guide... Read More »