If a construction project stalls for lack of funding, can the proposed tenant cancel the agreement for lease? The answer to this question is not straightforward and the cost of getting it wrong and terminating without legal justification is very high. The court recently had an opportunity to consider this point and provided some useful indications on how to approach this kind of situation.
A few years ago a developer, Telford Homes, which is also a construction company, acquired land on the borders of Greenwich and Deptford. By October 2008 it had excavated almost the whole of a double storey basement and completed the foundation piling for four blocks, consisting of commercial units with flats above. Telford then entered into an agreement for lease with Ampurius for the purchase of the ground and first floor commercial units on 999 year leases. More…