As a commercial property owner, your success often depends on other parties meeting contractual deadlines. Whether you’re developing a shopping center, leasing office space or selling commercial property, missed timelines can significantly impact your bottom line and future plans.
It must be a material breach
Not every missed deadline warrants legal action. Courts look for what’s called a “material breach” – one that substantially defeats the contract’s purpose. Firstly, they consider how much the breach affects your contractual rights. This could be your ability to collect rent, begin construction or complete a property sale as scheduled. A two-day closing delay might be inconvenient, but it won’t lose you money. A month-long delay, however, could significantly affect your business operations.
Courts may also look at whether monetary damages alone can address the breach. For example, if a tenant misses a move-in date, can rent payments make up for your loss? The breaching party’s conduct is another crucial factor – whether they acted in good faith or showed indifference to the deadline.
Timeline breaches that may warrant litigation
Certain deadline-related issues may lead to real estate litigation, especially if they leave a major impact on your property’s value or operations. This includes:
- Failure to close by the contracted date without proper extensions
- Missing critical due diligence deadlines that affect property inspection or financing
- Delayed delivery of essential documents, including permits or certificates
- Failure to meet construction or renovation timelines that impact tenant move-in dates
- Breach of lease commencement dates affecting rental income
- Missed deadlines for zoning changes or permit applications
When facing major deadline breaches, thorough documentation is necessary. Keep detailed records of all communications, as well as any attempts to resolve the issue. Make sure to track all the financial impacts of the delay. These records can strengthen your case if litigation becomes necessary.
Make sure you know your options
If you are dealing with timeline breaches in your commercial real estate transactions, understanding when and how to take legal action can mean the difference between a successful resolution and a costly delay. An attorney can assess whether the breach is material under Mississippi law and help you figure out your next steps.
