Conditional contracts always raise the potential for problems. Two recent cases involving contract conditions on the grant of planning permission illustrate this:

Contracts were exchanged conditional on the buyers obtaining planning permission to develop the property. That planning permission was obtained and the purchase completed. Three weeks after completion, neighbours applied for judicial review – with the planning permission being quashed, and the buyers being unable to develop the property. They sold it a year later at a loss. Not surprisingly, the buyers’ solicitors were held to be negligent for not having included a ‘call-in’ clause (ie extending time to allow for any appeal or application for judicial review). So, always include an appropriate delay period – or alternatively tell the client of the risks of going ahead without such a provision. Stoll & ors v Wacks Caller (A firm) [2009] EWHC 2299 (Ch).

Contracts were exchanged subject to obtaining planning permission by a long-stop date. The other side had to be notified as soon as permission was obtained, with a copy of the planning permission being supplied immediately on receipt. What happened was the planning permission was received, with the other side being notified – but no copy was supplied. Eventually, the long-stop date expired, and the question then was whether or not the contract had become unconditional by that time. On the facts, it was held that failure to supply a copy of the planning permission was not fatal. However, the delay and expense of litigation could have been avoided if the solicitors concerned had followed the procedural requirements of the contract with greater care. So, when the planning permission is granted do refer back to the contract to see precisely what obligations are imposed on both sides. Gregory Projects (Halifax) Ltd v Tenpin (Halifax) Ltd & anor [2009] EWHC 2639 (Ch).

For more on these cases see [2010] SJ 23 February 33. (Both above cases can be accessed free at www.practicalconveyancing.co.uk.)