Liquidated damages (sometimes called LADs) are built into construction documents to cap a contractor’s exposure for late delivery. Care should be taken when negotiating documentation for student accommodation to build in provision for potential exposure where the development is covered by the National Codes of Standards.
Here are the links to the two national codes which vary depending on whether the accommodation is owned and/or managed by the University:
- accommodation owned or managed by educational establishments
- accommodation NOT owned or managed by educational establishments
Whilst membership of the National Codes of Standards is voluntary, many HEIs and providers of student accommodation are members, with the code enjoying widespread support from the NUS, CLG, ANUK, to Universities UK. Academic term start dates are inflexible, and penalties for late delivery high, and with the protection of the code for students these costs will include rent abatement, provision of alternative accommodation, meal and travel vouchers to name just a few and so the cost of late delivery can soon mount way above a normal commercial loss of late delivery. Make sure the LADs are thoroughly provided for to prevent one or more parties to the deal being left way out of pocket!