Delays and overruns
Construction delay: what your contract actually says
Most off-plan contracts allow the developer a grace period, list events that extend the date without penalty, and offer you a remedy only after a long-stop date. Find those three things in your contract before deciding whether a delay is a breach.
Before deciding whether a delay is a breach, find three things in your contract: the grace period the developer is allowed, the events that extend the completion date without penalty, and the long-stop date after which you actually get a remedy. Most off-plan contracts give the developer all three, and only the third one helps you.
The three clauses to find
| Clause | What it does | What to check |
|---|---|---|
| Grace period | Extends the completion date by a fixed period with no consequence | Length, and whether it runs from the original date or the revised one |
| Force majeure and extension events | Lists causes that push the date without breach | How broad the list is, and who decides an event has occurred |
| Long-stop date | The date after which you have a remedy | What the remedy actually is, and what notice you must give |
Extension clauses do most of the work
The list of events that extend the date without penalty is where the protection usually disappears. Weather, labour shortages, material availability, changes in regulation, delays by authorities: a broadly drafted list covers most of what actually delays construction.
Read who determines that an extension event has occurred, and whether the developer is obliged to notify you when they claim one. Where there is no notice obligation, you may learn that eight months of extensions were claimed only when you ask why the long-stop date has not been reached.
What the remedy usually is
Rarely damages that reflect your actual loss. Commonly a right to terminate and recover what you have paid, sometimes with interest at a stated rate, sometimes without. Occasionally liquidated damages at a small percentage per month, capped.
Termination is a real remedy but a poor one in a rising market, and a slow one in any market where recovering the money means litigating against a developer who is already short of it. Knowing this early is worth more than knowing it at the long-stop date.
What to do with the clauses once you have found them
- Write down the original contractual date, the grace period, and the resulting long-stop date.
- Keep every communication in which a new date is given, with its date.
- Ask, in writing, whether any extension events have been claimed and on what grounds.
- Establish what notice you must give to preserve a remedy, and how long before the long-stop date.
- Take advice from a lawyer in the country of the property well before that deadline, not after it.
A delay does not become a breach until the long-stop date passes, so the grace period, the extension clauses and that date are what your contract actually says about a delay, whatever the developer says about it.
Last checked
Questions on this
- Does a delay mean I can walk away?
- Almost never on the strength of the delay alone. The right normally arises only after the long-stop date, and only if you follow the notice procedure in the contract.
- The developer keeps giving new dates verbally. Does that matter?
- It matters a great deal, and it is why they should be asked in writing. A written record of revised dates is the evidence that the programme was never reliable.
- Is a two-year long-stop date normal?
- It is common, particularly in markets where off-plan sale is standard. Common is not the same as reasonable, and it is negotiable before signing far more often than after.