Agreements for lease for construction lawyers—collateral warranties and third party rights

Published by a LexisNexis Construction expert
Practice notes

Agreements for lease for construction lawyers—collateral warranties and third party rights

Published by a LexisNexis Construction expert

Practice notes
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In an agreement for lease which provides for construction works to be carried out, an obligation for the landlord to procure collateral warranties (or third party rights) in favour of the tenant is common practice. This Practice Note looks at why tenants will request collateral warranties, which parties typically provide warranties and the considerations for construction lawyers when negotiating the terms of the warranties and related provisions in the agreement for lease.

Why does the tenant require warranties?

Defects which arise following completion are a fairly common feature of construction projects. Many defects arise during the defects liability period and the contractor will generally be obliged to rectify them in accordance with the building contract (see Practice Note: Defects liability period and rectification of defects). However, other defects (which may be more serious) can often manifest themselves later on, ie when the contractor is no longer contractually obliged under the building contract to return to site to correct them, and after the landlord/developer's liability to the tenant under the agreement for lease for

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Jurisdiction(s):
United Kingdom
Key definition:
Agreement definition
What does Agreement mean?

Agreement is broadly defined under EU and UK competition law so as to include activities ranging from a legally enforceable contract between two or more parties to an informal albeit clear understanding, whether entered into in writing or verbally.

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