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Prettys Solicitors Ipswich
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Follow the provisions of your agreement

October 2016 - Issue 86

A recent Scottish case of APCOA Parking (UK) Limited v Crosslands Properties Limited [2016] CSOH 63 demonstrates what happens if minor provisions in agreements for lease, development agreements and funding agreements relating to practical completion are not followed. This case concerned defects in a multi storey car park and provides a good example of how these provisions need to be followed if a developer wants to rely on a clause releasing it from liability.

Apcoa had an agreement for lease which gave them the right to attend a practical completion and defects inspection of the car park built by Crosslands. However, the notice of the inspection was not given. Therefore, Apcoa could not make representations on whether PC and defects certificates should be issued under the building contract (in order to release Crosslands from their liability in relation to the works). Despite this, the works were completed in 2008 and the certificate of making good had been issued in June 2012.

Significant repairs were needed so Apcoa made a claim for the failure and the cost of repair. Crosslands tried to rely on their release from liability for defects once a certificate of making good had been issued (as provided for in the agreement for lease). Apcoa claimed they had only seen the certificate of making good after it had started proceedings and in any event there had been no final inspection meeting.

The court held that the failure to comply with the agreement for lease requirements relating to the certificate of making good meant there could be no valid certificate. Thus, Crossland could not exclude its liability. Despite this being a Scottish case, it makes clear that developers need to comply with the express contractual mechanisms in order to rely on the release from liability and it is not optional even where a contract is absent of preconditions.

Architects in these positions should also be clear on who has responsibility for liaising with third parties to apply the procedures.

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