Construction Advisory and Disputes

Whether you are taking the big step of buying or renting your first commercial property, purchasing a development site, adding to your buy to let portfolio or purchasing your new home, understanding Value Added Tax (VAT) is an essential part of the world of real estate.

You own the freehold to an apartment building in London, and you are approached by the developer with an interesting proposal. They want to buy the unused rooftop space on your building to develop and sell some new flats. Their pitch? We pay you 2 million pounds and we take on all the expense and risk of construction and the building.  Sounds great, right? But, what’s that nagging voice in your head saying “this is too good to be true”. 

Whilst the developer’s plan is part of a growing trend to build extra floor on top of existing buildings to create new homes (and lines up with the government’s goal to boost housing across the UK), there are a number of risks to consider and actions to implement before agreeing such a sale.

The Building Cost Information Service reported that construction material price inflation peaked at 26% in June 2023.  Political instability, extreme weather and recessionary pressures saw the construction industry in the UK continue to grapple with the challenge of inflation, which has significantly impacted project costs, programmes and overall project viability.

The UK is currently facing a housing crisis. Looking at London in particular, the property market has not been able to support the exponential growth of residents in the capital. 

Frequently Asked Questions on the Building Safety Fund

Last month, the Royal Institution of Chartered Surveyors (RICS), The Building Societies Association (BSA) and UK Finance agreed a new industry-wide valuation process for buildings more than six storeys high.

The value of the UK’s data economy is over £70 billion and this is only set to increase.  Digital Realty’s “The Data Economy Report 2018” estimates that there is a further £50 billion of untapped potential in this part of the UK economy.

In construction, “underpinning” is the process of strengthening the foundation of an existing structure in order to provide stability in cases where the original foundation is not strong enough. In respect of building safety, the Hackitt Report seeks to change the ethos of the industry by strengthening the existing foundations and introducing new ideas to build upon them.

In my previous blog, I concluded my review of how the roles and responsibilities of the key CDM duty holders may be applied to Higher Risk Residential Buildings (“HRRBs”). In this blog, I will explore the Hackitt Report’s recommendation for the introduction of a ‘golden thread’ of quality building information and what that means for Principal Designers and Principal Contractors.

In my previous blog I provided an overview of the history of health and safety legislation, and analysed the Hackitt report’s recommendation that the CDM Regulations should be extended to HRRBs. I concluded by looking at how the proposals may impact clients (as defined by the CDM Regulations). I continue the theme in this blog by reviewing the potential implications on the other CDM duty holders – Designers, Contractors, Principal Designers and Principal Contractors.

Our blog series began with a review of Dame Judith Hackitt’s report and our examination of whether an outright ban on combustible materials is required. In this blog we analyse the primary purpose of the Construction (Design and Management) Regulations (‘CDM Regulations’), how the CDM Regulations apply to key persons in a construction project and how the Report suggests the construction industry apply the regulations to higher risk residential buildings (HRRBs).

Delay is a major issue on construction projects.  To combat this, most construction contracts will specify a particular date by which the works must be completed.  If the contractor fails to meet this deadline, it will usually have to pay a pre-agreed level of damages for the period of delay.  This is unless the contractor can show that it has a claim for an extension of time which will push back the date for completion. 

Following the Grenfell Tower tragedy, the Government commissioned a report to make recommendations on the future regulatory system covering high rise and complex buildings.  In her final report (‘Building a Safer Future, Independent Review of Building Regulations and Fire Safety: Final Report’), published in May 2018, Dame Hackitt called for major reform and a change of culture, making clear that the current system is not fit for purpose. 

A substantial rebuild or simply papering over the cracks- What does the Hackitt Report mean for the construction industry? - A blog series

The recent judgment of Redbourn Group Ltd v Fairgate Developments Ltd [2018] EWHC 658 highlights the importance, for a developer appointing a consultant to carry out services on a construction project, of ensuring the appointment terms are clear on: (a) circumstances entitling the developer to terminate the Consultant’s employment and (b) any amounts payable by the developer to the consultant on such termination.

Today marks the end of the government consultation on the practice of cash retentions under construction contracts.

The recent decision of Mr Justice Akenhead in Henia and Beck Interiors ([2015] EWHC 2433 (TCC)), provides some helpful guidance regarding the validity of Interim Applications for Payment and Pay Less Notices