Buyer entitled to pull out of purchase as flat not complete

A buyer was entitled to pull out of an agreement to purchase a newly built flat which had not been completed and made ready to live in by the date specified in the contract. 

That was the decision of the High Court in a case involving Caledonian Management Services Ltd and Clivedale Properties Ltd.

The flat was part of a development in a highly desirable part of central London. 

The lease agreement included provisions entitling Caledonian to a designated parking space within the estate, and to rescind the agreement by giving two weeks’ notice if the completion notice for the development was not served by the agreed date.

The development’s construction fell behind schedule, and in December 2018 Clivedale wrote to Caledonian requesting a time extension.

Caledonian refused and on 4 January 2019 it gave notice to rescind the agreement on 29 January 2019.

Clivedale submitted that a partial completion notice, which had been issued by the building inspector on 7 February 2019 but backdated to 28 January 2019, demonstrated that the building occupancy requirements had been satisfied by 29 January 2019.

It also said that it had varied the agreement concerning designated parking to include the availability of spaces in a nearby private mews.

The court found in favour of Caledonian.

It held that where a completion notice had been backdated, the party relying on it had to show that the conditions certified applied at that backdated date. 

The building inspector had visited the site on three occasions: 16 January 2019, 31 January 2019 and 7 February 2019. On the first two occasions, he had not been satisfied that the works had been completed to the standard required by the building regulations.

Only on the third inspection had he issued a partial completion notice certifying the completion of five flats to the appropriate standard. It was difficult to see how the building inspector could have been satisfied on 7 February that building regulations had been met on 28 January when that date was before the 31 January inspection when a certificate had not been issued.

The other factor was that there was no designated parking area available on the site by 29 January 2019. It was not open to Clivedale to unilaterally vary the terms of the agreement to provide for a designated parking area outside the estate.

Caledonian had therefore been entitled to rescind the agreement. Clivedale was ordered to repay the purchase money.

Please contact Gary Baber or Jackie Hand if you would like advice about the legal aspects of buying or selling a home.

CALEDONIAN MANAGEMENT SERVICES LTD v CLIVEDALE PROPERTIES LTD (2020)

QBD (Comm) (Judge Mark Pelling QC) 28/07/2020