Settling a dispute following the purchase of commercial properties

James Parratt recently assisted a property developer client in successfully settling a dispute that arose during the purchase of a number of commercial properties in South London.

The client had exchanged contracts to buy the properties for several million pounds, including paying a substantial deposit. They had also obtained planning permission to convert the properties into residential flats which came at a considerable cost to the client.

The completion date was extended twice over a period of 18 months during which time the value of the property had significantly reduced and the cost of materials required to develop it had increased.

The client looked to negotiate a reduction in the purchase price so the client could, at a minimum, break even with their outlay. The completion date passed and the sellers served a notice to complete on the client.

Time was of the essence and the client had 10 days to complete or risk having the contract terminated with the seller retaining the deposit. Upon inspecting the properties after the notice to complete was served, the former tenants of the properties had left a significant volume of goods in the property.

James was able to advise the client to terminate the contract themselves based on the fact that the sellers failed to provide vacant possession of the properties as a result of the significant volume of goods left in the properties. James argued that this entitled the client to refuse to complete on the transaction and recoup both their deposit and the costs incurred in obtaining planning permission. This enabled the client to negotiate with the seller and ultimately to agree settlement on terms which meant the client purchased the property for a substantially reduced price which enabled the client to subsequently sell the properties and make a profit.