Agreements for lease with development obligations—dispute resolution
Agreements for lease with development obligations—dispute resolution

The following Property guidance note provides comprehensive and up to date legal information covering:

  • Agreements for lease with development obligations—dispute resolution
  • Final and binding decisions
  • Construction issues
  • Practical completion

An agreement for lease with development obligations can give rise to a variety of issues, eg the right to claim an extension of time, measurement, whether practical completion has been achieved, or even the meaning of the agreement itself. Therefore, the parties must consider the best method for dealing with these issues if and when they should arise.

Final and binding decisions

An issue only becomes a dispute if the parties are allowed to disagree about it. There will be no dispute, and no need for any procedure to resolve it, if the agreement for lease provides that any certificates and determinations issued under or in relation to it (eg those issued by the contract administrator under the building contract which are carried over into the agreement for lease, or the specialist measurement surveyor under the agreement for lease itself) are final and binding. This position will be the developer’s preferred option (and may appear in the first draft of the agreement for lease), but a tenant should not accept it. The provision has potentially significant adverse consequences for the tenant in terms of:

  1. the timing and condition in which the tenant is obliged to accept the property, and

  2. the rent that the tenant will have to pay for the property, if it transpires that the certificate or determination in question was wrongly issued

Even if a final and binding provision is included, this still does not provide the developer with absolute certainty that the relevant certificate or determination is immune from challenge. An expert’s decision can be reviewed if he has, in effect, ‘answered the wrong question’ (which is

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