Q&As

The Housing Grants, Construction and Regeneration 1996 does not apply to agreements which fall within the ‘development agreement’ exception in the Construction Contracts (England and Wales) Exclusion Order, SI 1998/648. SI 1998/648 provides that a contract is a development agreement if it provides for the grant or disposal of a relevant interest in the land on which the construction operations take place (SI 1998/648, reg 6). Would a forward funding agreement (where there is a separate sale and purchase contract with the fund) fall within the development agreement exception, even if it contains no obligations on the developer as to letting of units?

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Published on LexisPSL on 26/07/2021

The following Property Q&A provides comprehensive and up to date legal information covering:

  • The Housing Grants, Construction and Regeneration 1996 does not apply to agreements which fall within the ‘development agreement’ exception in the Construction Contracts (England and Wales) Exclusion Order, SI 1998/648. SI 1998/648 provides that a contract is a development agreement if it provides for the grant or disposal of a relevant interest in the land on which the construction operations take place (SI 1998/648, reg 6). Would a forward funding agreement (where there is a separate sale and purchase contract with the fund) fall within the development agreement exception, even if it contains no obligations on the developer as to letting of units?

The Housing Grants, Construction and Regeneration 1996 does not apply to agreements which fall within the ‘development agreement’ exception in the Construction Contracts (England and Wales) Exclusion Order, SI 1998/648. SI 1998/648 provides that a contract is a development agreement if it provides for the grant or disposal of a relevant interest in the land on which the construction operations take place (SI 1998/648, reg 6). Would a forward funding agreement (where there is a separate sale and purchase contract with the fund) fall within the development agreement exception, even if it contains no obligations on the developer as to letting of units?

Whether a forward funding agreement is exempt from the requirements of HGCRA 1996 will depend on the precise terms of the relevant agreement.

By way of background, HGCRA 1996, as amended by the Part 8 of the Local Democracy, Economic Development and Construction Act 2009 (LDEDCA 2009) sets out mandatory requirements for 'construction contracts' relating to adjudication and payment. 'Construction contracts' is defined widely under in LDEDCA 2009 and covers contracts for the carrying out of construction operations such as the construction, alteration, repair, maintenance, extension, demolition and dismantling of buildings. Building contracts will generally be caught, as well as services contracts such as consultant appointments. However various types of contract are excluded from the definition

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