Contract Question on Property Refurbishments

[snoorks]

Hi

I am seeking advice regarding a contractual issue I am facing with a property agent in the UK.

I recently purchased a property through this agent, who is also contracted to manage its refurbishment. Since the official handover of the property, the agent has failed to begin any work or meet the timelines previously promised. Despite repeated follow-ups, there has been no progress.

The contract includes a clause granting the agent exclusivity over the project management of the refurbishment. The delays are now adversely affecting the overall value and timeline of my investment.

Here are the relevant sections from the contract which I would appreciate advise on:

1. “The Agent has exclusivity over the project management of these refurbishments".

2. This Clause 5 shall survive Termination of contract.”

Please let me know:
1. Do I have legal grounds to terminate the contract due to the agent’s failure to perform or significant delays for the refurbishments?

2. What would be considered a reasonable timeframe for the agent to begin refurb work after property handover? As there is no timeframe set in the contract to start the refurb work.

3. Does the exclusivity clause prevent me from engaging another builder if the agent continues to delay? If so, how could I legally terminate it (if delay is still happening)?

4. For the clause that states "shall survive Termination of contract", will the contract still be valid if we terminate his services due to continuing delays?

5. What steps should I take to formally protect my interests and avoid liability when I arrange a new builder to do the refurb work (if current agent is still not doing anything)?

I would be grateful for any advice or direction offered.

Thank you

 

[Newchodge]

Hi

I am seeking advice regarding a contractual issue I am facing with a property agent in the UK.

I recently purchased a property through this agent, who is also contracted to manage its refurbishment. Since the official handover of the property, the agent has failed to begin any work or meet the timelines previously promised. Despite repeated follow-ups, there has been no progress.

The contract includes a clause granting the agent exclusivity over the project management of the refurbishment. The delays are now adversely affecting the overall value and timeline of my investment.

Here are the relevant sections from the contract which I would appreciate advise on:

1. “The Agent has exclusivity over the project management of these refurbishments".

2. This Clause 5 shall survive Termination of contract.”

Please let me know:
1. Do I have legal grounds to terminate the contract due to the agent’s failure to perform or significant delays for the refurbishments?

2. What would be considered a reasonable timeframe for the agent to begin refurb work after property handover? As there is no timeframe set in the contract to start the refurb work.

3. Does the exclusivity clause prevent me from engaging another builder if the agent continues to delay? If so, how could I legally terminate it (if delay is still happening)?

4. For the clause that states "shall survive Termination of contract", will the contract still be valid if we terminate his services due to continuing delays?

5. What steps should I take to formally protect my interests and avoid liability when I arrange a new builder to do the refurb work (if current agent is still not doing anything)?

I would be grateful for any advice or direction offered.

Thank you

You need to take the entire contract to a specialist solicitor and pay for their advice.

On this forum you may get some opinions, although I would not offer an opinion without seeing the enitrety of the contract, however lay opinions are of no use to you.

 

[Paul Kelly ICHYB]

As Cyndy says, go to a solicitor.

The key issue is:

The contract includes a clause granting the agent exclusivity over the project management

Is there a timescale for completion of work? Was a timetable agreed? WHat about cost control - can they charge what they want?

Your solicitor should have highlighted this before signing the deal <<holds breath waiting for response re solicitors advice!!>>

 

[snoorks]

@Cyndy and @paul, Thanks for the reply.

There was no timeline stated in the contract but we cannot wait indefinitely for him (its been 1 month and there are no progress). But verbally agent has mentioned works can be done in 1 month plus previously. As for cost, prior to contract he has also sent us an estimate.

I would like to know about termination possibilities and not be liable for these clauses when the vendor continues not to do anything.

 

[Lisa Thomas]

I can recommend a solicitor - feel free to dm me.

 

[eteb3]

verbally agent has mentioned works can be done in 1 month plus previously.

If he said that before you signed, then it’s possible it forms part of the contract. Again, a solicitor would have to tell you.

Exclusivity surviving termination sounds like irrational nonsense to me, and my opinion is that there’s a high probability it would be chucked out in court.

In terms of how to protect yourself (without paying a lawyer): it’s no guarantee, but being reasonable, very firm, open to resolutions creatively arrived at, and having an obsession with gathering evidence, seems to be a generally successful strategy.

And probably nobody needs to tell you that the best time to protect your interests was before signing the contract…

 

[snoorks]

If he said that before you signed, then it’s possible it forms part of the contract. Again, a solicitor would have to tell you.

Exclusivity surviving termination sounds like irrational nonsense to me, and my opinion is that there’s a high probability it would be chucked out in court.

In terms of how to protect yourself (without paying a lawyer): it’s no guarantee, but being reasonable, very firm, open to resolutions creatively arrived at, and having an obsession with gathering evidence, seems to be a generally successful strategy.

And probably nobody needs to tell you that the best time to protect your interests was before signing the contract…

@eteb3 Prior to signing the contract we checked the agent background and know of fellow investors who had deal with him. Found him ok that's why we proceeded. Now guess he took on more than he can handle that's why the delays etc. I would need to dig through our communications for the renovation timeline he promised and serve as part of the break clause. Thank you.

 

[eteb3]

You still want to look for an “entire agreement” clause in the contract. This attempts to fence off any prior discussions from the final agreement. It’s not always successful, but again only a solicitor could advise.

More generally, time is not “of the essence” in a contract unless time is specified in the contract. So the agent has as long as is reasonable to do the work, and the starting point for reasonable will be (I think but ask a solicitor) the upper limit on a commercially usual length of time - objectively viewed, your own preferences irrelevant. You could try to make time of the essence.

To be fully secure in cancelling you’d have to follow the termination clauses in the contract or else claim the agent is in “repudiatory breach” - that is, has shown an intention to abandon their side of the bargain entirely. That entitles you to “accept the breach”, that is, abandon your side of the bargain in turn, rather than doing your bit and then suing the agent for damages. The snag is that the repudiation must be of an essential term: again, time is not usually “of the essence” - not an essential term.

More pragmatically: if your think the agent has taken too much on, will they have time to sue you with all the uncertainty that brings, or would they rather just crank through the work they do have in hand?

 

[snoorks]

Thank you for the reply again Time is of the essence here because:
1. Agent knows my mortgage has started once the property was handed over to me
2. We have an existing agreement with a company to lease the property to them, so the renovation needs to be completed in a timely manner, or we may risk losing this tenant.

Agent has claimed he is and was checking and verifying the quotes with the builders since 2nd week of May (almost three times). Any clarifications should have been completed by now especially since it is not a major repair with structural works needed. Hence, I am thinking of cancelling our agreement due to his delay.

 

[eteb3]

Time is of the essence here because:

Time is of the essence for you, for your commercial purposes. But that’s irrelevant.

The relevant question is whether the agent agreed that time was of the essence, for the purposes of the contract.

Agent’s knowledge of 1 and 2 might suggest so, but it’s not a certainty. Again a solicitor could advise

 

[fisicx]

Termination will depend on the clause you intend to invoke. Not starting work on the date you hoped isn’t likely to win the case.

Did you get a solicitor to check the contract before signing?