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Can a developer force me to stop work on a housing project for six months?
16-07-2008, 03:06 PM
Post: #1
Can a developer force me to stop work on a housing project for six months?
I'm a housebuilding contractor. The developer has issued what he calls a "deceleration order" to me. In other words, he says he wants me to slow down or stop work so that the completion date is six months later than the one in the contract. Presumably he wants to wait until the housing market picks up a bit. He says he'll fix a new completion date and will compensate me for the costs of demobilising and remobilising again. Can he do this?
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16-07-2008, 03:36 PM
Post: #2
RE: Can a developer force me to stop work on a housing project for six months?
He can't issue a variation order stopping you, as those only cover scope of work issues.
He could issue an instruction to postpone the works if the contract was standard JCT 2005 (clause 3.15; or 3.10 if it's design and build)but:
a) if it's for more than the period stated in the Contract Particulars (2 months if unamanded) the Contractor can terminate after that period has expired-then he has a claim for losses, including lost profit;
b) even if there is no termination,he'd have to pay you the loss and expense associated with any postponement e.g site overheads,deferred profit,contribution to head office overheads,possible payments to subcontractors to reschedule work etc.

Still, in he current market, it might still be profitable for the developer to postpone for as long as he can and even risk a termination at some point,rather than be stuck with a load of houses ha can't sell!
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04-08-2008, 01:32 PM (This post was last modified: 04-08-2008 01:33 PM by Pedro Bonio.)
Post: #3
RE: Can a developer force me to stop work on a housing project for six months?
homeboy Wrote:I'm a housebuilding contractor. The developer has issued what he calls a "deceleration order" to me. In other words, he says he wants me to slow down or stop work so that the completion date is six months later than the one in the contract.

In most of our contracts the developer reserves the right to alter the construction programme without penalty. Prob a good idea to check your smallprint.

Best of luck.

http://www.bondgroupuk.com
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23-09-2008, 10:50 PM (This post was last modified: 23-09-2008 10:52 PM by yelkcub69.)
Post: #4
RE: Can a developer force me to stop work on a housing project for six months?
Having worked for a few developers / housebuilders, I would suggest that the legality of this really depends on what the contract / subcontract says. Most developers / housebuilders have provisions in their contract allowing this and as such they would sometimes not accept demobilisation / remobilisation costs. I agree that it would be a good idea to check the clauses within the contract.

However in real terms you need to consider why he has instructed this slow down and consider if they are financially sound as ultimately if they have no purchasers they may not be able to fund paying you. As such it maybe a blessing as it may reduce your exposure. Ultimately I would suggest that you get paid for works to date and then worry about the future.
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