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...
6th July, 2018
When a business invests in its community it deserves praise – but it must go beyond that, writes Helen Watson, a trustee at Claire House and partner at Aaron and Partners Solicitors. Corporate social responsibility (CSR) is the link between a company and the community in which it operates. As a trustee on charity boards including Claire House... Read More »
4th July, 2018
Stuart Haynes, Corporate & Commercial Partner and IAG Global Board Member, reports on IAG Global – Wiesbaden held 14th to 17th June 2018 Stuart Haynes (IAG Global Board Member) Stuart Scott-Goldstone and Nick Clarke attended the recent IAG Global meeting in Wiesbaden which was held at the Grand Hotel Nassauer Hof from 14th – and 17th July 2018 The meeting... Read More »
6th June, 2018
Rhiannon Edwards, Solicitor in the Wills, Trusts and Tax department, discusses the recent judgement in the case of Nield-Moir v Freeman, where the High Court has ordered one of two daughters of Colin Birtles, who has died, to take a DNA test to prove paternity as part of an inheritance dispute In an unusual case, the High Court... Read More »