Loss of profit on a sub-sale: who pays? Christopher Warenius reports
There are some signs that the downturn in the property market following the credit crunch in 2008 and 2009 is coming to an end. However, that downturn led to an upturn in property litigation, which is still very much ongoing as cases reach trial after a year or more of preparation.
One of the most obvious symptoms of the downturn was the large number of new build properties that could not be sold. Many developers faced purchasers who were unable to complete because they could not obtain mortgage funding to do so or who were otherwise unwilling to complete.
While traumatic for the buyers and sellers involved, these cases have raised some interesting issues for lawyers. Liability is generally not much of an issue in these cases. The wriggle room for both parties comes in the area of quantum. How do you assess what the Defendant should pay?
The basic principles relating to damages for failure to complete are relatively straightforward. The Defendant must pay the Claimant the difference between the contract price
