Many developments have been put on hold in recent months. So what should you be thinking about if the project you are working on is about to be mothballed?
First, see if your contract sets out what your rights and obligations are. If it does, this will govern what will happen next – for instance how much notice you will be given, what the payment position is, how long the project could be mothballed for and the procedure for starting up again.
If it doesn’t, you will have to negotiate the terms on which the works will be suspended. Think about what you want to achieve from these negotiations. Who will pay for the cost of mothballing the site and reactivating it? What length of suspension is acceptable to you? Will the original contract sum be sufficient if the works are started up again or does it need to be renegotiated? Remember to keep a record of these negotiations to avoid confusion later.
If you are responsible for maintaining works insurance during the period of suspension, make sure your policy continues. Many policies fall away if works are suspended or the suspension lasts longer than a particular period specified in the policy. If this is the case, make sure an alternative is in place.
Next, review your subcontracts and supply arrangements and issue appropriate notices of suspension or termination.
Finally, when the agreed period of suspension is coming to an end, be prepared to start up again or to serve a notice of termination as the case may be.
Stephanie Canham is a partner in Trowers & Hamlins’ projects and construction team