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Option Agreement & Conditional Contract Extensions – COVID-19

Many Option Agreements and Conditional Contracts (e.g. contracts which are conditional upon obtaining planning consent) will undoubtedly specify a deadline for submitting a planning application/appeal and receiving the decision notice.

As the UK has been in lockdown since the 23rd March 2020, virtually all businesses have been affected in some way which has impacted the planning industry resulting in delays in the planning process. 

Impacts on the Planning Process

The lockdown measures have impacted various areas of the planning process as follows:-

  • Reports required prior to submission of a planning application

Prior to submitting a planning application, various reports and surveys need to be commissioned and submitted to the Local Authority in support of the application such as, environmental reports, archaeological reports, bat surveys and newt surveys, to name a few.  All of these reports/surveys require a site inspection from the relevant professional to carry out investigations and produce their report.  As expected, the lockdown measures have greatly limited this resulting in delays.

  • Planning Applications & Delays

Whilst many Local Authorities are still accepting planning applications, they are in many cases taking longer to be processed as planning officers are unable to attend sites and planning committee meetings are being undertaken remotely via video conference. Also, a reduction in staff has resulted in delays in dealing with appeals.

What does this mean for my Option Agreement / Conditional Contract?

Option Agreements and Conditional Contracts will often have deadlines for submission of planning applications.  If the agreement was exchanged and the deadline set prior to lockdown then there could be insufficient time for the Developer to comply with the terms.  If so, then it is advisable that the Developer contacts the Landowner to negotiate and try and agree new timescales and extend the Option Period (or Conditional Period, in the case of the Conditional Contract) and the Long Stop Date.

If an extension is agreed, then this ought to be documented by a formal agreement in writing drafted by a specialised Lawyer to ensure that the terms are legally binding and avoid any potential ambiguity.

If you have an Option Agreement or a Conditional Contract that has or could be affected by delays from COVID-19 please contact our real estate team to discuss further on the details below.  

Karen Piontek
Partner & Head of Commercial Property
Karen.piontek@cgprofessional.co.uk
T: 01257 448410