Luxury developments: Delivering the vision (Part 3)

• Published date: 25 August 2022
• Law Firm: Holding Redlich
• Author: Ms Kirsty Smith and Tarin Olsen

Luxury developments: Delivering the vision (Part 3)

Previously in this three-part luxury development series, we considered:

1. matters which developers should consider during the pre-tender stage of luxury development projects, including developing a clear overall vision and design intent for the project
2. the contracting phase of luxury development projects, including ensuring the contractual framework supports the developer's vision and limits the developer's risk exposure.

In the final part of this series, we discuss the management of works during the contract period and the ultimate delivery of luxury development projects.

Managing the construction work

As touched on in the previous parts of this series, the developer may elect to have varying levels of involvement in the progression of the works throughout the course of the project. Depending on the developer's intended level of ongoing involvement in the works, it may be necessary to appoint a third party superintendent or principal's representative to manage the progression of the works on the developer's behalf.

In deciding what level of ongoing involvement is necessary (or appropriate) for a developer, it is worth considering the following:

• who is responsible for the day-to-day management of queries from the contractor? It is important that whoever is undertaking this task be wary of issuing any instructions to the contractor which may amount to a variation of the works under the contract
• in circumstances where the design was not finalised before the works commence, who will be responsible for confirming and approving design choices, including product selection and finishes Are there any restrictions on when and how these decisions need to be finalised and communicated to the contractor so as to not unreasonably delay the works?
• who will be responsible for ensuring that the developer's design intent is met and dealing with situations where the contractor is not meeting the required standard? It is important that any instructions given in respect of rectifying defective or substandard works are done in such a way that they do not come across as an instruction or direction to vary the works under the contract. To this end, it may be worthwhile to consider implementing ongoing, progressive independent reviews of the works to ensure they are being carried out in accordance with the required design and quality standards.

In circumstances where the developer elects to take an active role in the works, such as by sourcing materials or making ongoing decisions on site, the developer should be wary that, if these matters have not been appropriately accounted for in the contract, the developer could end up in a situation where their actions amount to a cause of delay or a variation to the contract.

Also, the developer should be aware that if the contract does not allow for changes in the programme or work sequence, any direction given to...