JCT query

J_B

We ( A Ltd Co) signed a JCT Contract with a developer (Ltd Co) to renovate an old hotel into three apartments in late 2016,

All three apartments are habitable but several of the outside jobs (and a few inside) are still incomplete.

I'm struggling to find any words in it to mention a completion date and whether there is anything we can do if it's not complete.

It's an ICD 2011 contract (if that means anything to anyone) and on Page 10 it does say "Date for completion of works = 22/09/2017" so we're only 7 years over!

We are meeting our solicitor in a couple of days but does anyone have any pointers as to our 'rights'

We are still on speaking terms with the developers who are struggling to find anyone to do the works!

born_again

Sounds like time to take them to court.

J_B

We would really like them to just get the job done but, it's testing our patience somewhat!

ComicGeek

This is a good article on the issue of damages from RICS  https://www.rics.org/content/dam/ricsglobal/documents/standards/Damages_for_delay_to_completion_archived.pdf

Normally the liquidated damages for overrunning the contract would be set out clearly in the contract (ie profit lost from rental income per month). It's difficult enforcing it without - as a Ltd company you can only rely on what's in the contract, and you can't retrospectively add liquidated damages. ICD contract includes Contractor's Design so isn't a simple JCT contract. Did the other party create the contract for you to sign, leaving out any onerous clauses for them?
 
Also note that if completion is certified with outstanding works (which it may have been if partial completion has been provided for the apartments?), a contractor is not liable for delay damages whilst they undertake the outstanding works.

Are you still paying the contract sum as agreed in 2016, with no increases? The real kick would be paying today's prices on a project 7 years late.

J_B

Many thanks @ComicGeek for your detailed reply - will dig a little deeper.

Regarding payments ... we haven't actually had any bills for several years so another thing to consider ....

ComicGeek

But again the contract should set out the agreed contract sum, payment schedules, any provisional sums etc, and whether increased material/labour costs can be passed on etc.

You need to read every word of the contract. If the contract was drawn up by the developer and you just signed it, then likely they took out all negative clauses for them - unfortunately no 'consumer rights' when a Ltd company enters a contract with another company. 

Make sure that you are speaking with a solicitor who is experienced with construction contracts, and possibly speak with a surveyor/QS about reviewing past invoices, future invoices, works on site etc. Never seen delays that long - 7 years late on a circa 12 month build contract would suggest serious issues.

J_B

It takes a little explaining, but B Homes (Mr & Mrs Jones x 2) bought the old hotel which was 11&12 knocked through - a 20 bedroom seafront hotel (4 storey)  with .... two bathrooms!!! So, in need of modernisation. They got planning to turn it into 8 apartments. We purchased No 11 from them with the JCT from B Construction (same Jones's, different company) to develop it. We tweaked the planning to have one bigger duplex apartment and two single storey apartments and they employed contractors to do the work.

Once our three were habitable, they moved on to completing No12 as they had sold the four apartments that side 'off plan', and promised to finish off the outside jobs when all No 12 were complete.

Sadly, their contractor had had enough of working away from home so quit 12 months ago ...  and they haven't been able to find anyone else to help.

We do have an agreed sum, circa 360k but not sure <<whether increased material/labour costs can be passed on etc.>>

JCT was drawn up by the developer but was signed on approval of our (non-specialist) solicitor, and theirs.

One of the Mr Jones, the one who has been managing the project, is a QS and has worked out all the costings.

J_B

ComicGeek said:

Make sure that you are speaking with a solicitor who is experienced with construction contracts...............

We've been to the solicitor, and he agreed with you - he is investigating ....

ComicGeek

Do you get partial completion for your 3 apartments? Have they been sold/rented out now? That would usually draw a line under any liquidated damages claim.

If you haven't paid them for work that hasn't yet been done, and they are significantly delayed and obviously not interested in finishing, can't you just agree with them to cancel the contract and finish it yourself?

Mr Jones QS works for the other side so you really need your own QS if there is disagreement over costs.

J_B

ComicGeek said:

Do you get partial completion for your 3 apartments? Have they been sold/rented out now? That would usually draw a line under any liquidated damages claim.

Yes all three are habitable, we do holiday rentals from two and AST the other one

If you haven't paid them for work that hasn't yet been done, and they are significantly delayed and obviously not interested in finishing, can't you just agree with them to cancel the contract and finish it yourself?

Yes but .... a lot of the remaining work is communal work outside - car parking, fire escape etc, which 'next door' are expecting to be completed by the people who they bought from (I don't think any have a 'retainer')

Mr Jones QS works for the other side so you really need your own QS if there is disagreement over costs.

Hmm - understood - there have been no disagreements ... yet!

Thanks for your input.