The 7 Most Common Disputes That Derail Property Developments

(And How Developers Can Contain Them)

Property developments rarely fail because the numbers do not stack up.
They fail because disputes escalate unchecked — draining cashflow, freezing decision-making and handing leverage to the wrong party at the worst possible time.

For experienced developers, disputes are not an anomaly; they are an occupational risk. The real differentiator is not whether a dispute arises, but how quickly and strategically it is contained before it disrupts funding, construction or exit plans.

Below we outline the seven disputes we most commonly see derail live developments, together with practical steps developers can take to limit damage and preserve commercial momentum.

1. Contractor Delay and Abandonment

Delays caused by missed milestones, poor site management or a contractor walking off site can rapidly place a development under pressure. Funding covenants, pre-sales deadlines and reputational confidence can all be undermined within weeks.

What often causes real damage is not the delay itself, but hesitation. Developers understandably hope matters will improve, yet delay in enforcing contractual rights can erode termination options and weaken evidential positions. By the time decisive action is taken, leverage has often shifted.

Early containment typically involves enforcing notice provisions promptly, securing contemporaneous delay evidence and stress-testing termination rights before positions harden. In parallel, replacement contractor strategies should be assessed early. Timely legal intervention frequently preserves optionality and avoids project paralysis.

2. Defective Works and Design Failures

Defects arising from poor workmanship or flawed design commonly emerge mid-build or shortly after completion. These issues can quickly become multi-party disputes involving contractors, designers, insurers and funders.

Projects derail when responsibility is contested and remediation stalls while arguments escalate. Costs rise, programmes slip and commercial focus is lost.

Containment depends on early identification of whether the issue is one of build quality, design liability or both. Developers should preserve rights against all potentially responsible parties, secure expert evidence at the earliest opportunity and adopt a recovery-focused approach rather than a blame-driven one. In many cases, strategic interim settlements allow works to continue while liability disputes are resolved in the background.

3. Joint Venture and Development Agreement Disputes

Disputes between joint venture or development partners often concern control, funding obligations, valuation mechanics or exit rights. These disagreements frequently surface at critical project stages — refinancing, variations, or disposal.

Deadlock provisions are often poorly drafted or commercially unrealistic. Once litigation begins, decision-making can freeze entirely, placing the development at risk.

Effective containment requires swift assertion of governance rights, careful use of interim remedies to break deadlock and a focus on maintaining operational continuity. JV disputes are rarely about legal theory alone; they are about leverage, timing and preserving exit optionality while pressure is applied.

4. Rights of Light, Boundary and Access Disputes

Neighbouring landowners may seek injunctions or compensation, either to protect legitimate rights or to extract commercial value from delay. Even where a claim is ultimately weak, the mere threat of an injunction can alarm funders and halt works.

Developments derail when these risks are identified too late. Containment begins with early technical and legal risk assessment, supported by evidence gathering before positions become entrenched. Strategic negotiation, backed by genuine litigation readiness, often prevents proceedings altogether. Where necessary, injunction defence planning should be undertaken before any claim is issued, not after.

5. Professional Negligence Claims Against Consultants

Architects, engineers and project managers play a critical role in development delivery. Failures in design coordination, specification or project oversight can result in redesign, delay and significant cost overruns.

Developers frequently delay pursuing claims until losses are fully crystallised. By then, insurance notification issues, limitation risks and defensive insurer tactics may restrict recovery.

Containment involves early identification of potential negligence, careful preservation of insurance positions and strategic loss assessment. Professional negligence claims are most effective when planned proactively rather than pursued reactively once relationships have already collapsed.

6. Funding and Investor Disputes

Disputes with funders or investors over drawdowns, covenant breaches, step-in rights or enforcement can rapidly destabilise an otherwise viable project. Loss of funding leverage often cascades into contractor disputes, insolvency risk and forced asset sales.

Containment requires disciplined communication, decisive action in enforcing or resisting step-in rights and tactical use of dispute resolution mechanisms to stabilise positions. The priority is protecting asset value and maintaining control while disputes run, rather than allowing funding pressure to dictate outcomes.

7. Termination and Enforcement Disputes

Termination is often the most powerful tool available to a developer — and the most dangerous if mishandled. Disputes frequently arise over whether termination was lawful or whether enforcement steps were justified.

Wrongful termination can expose developers to substantial counterclaims and prolong disputes rather than resolve them. Containment depends on stress-testing termination grounds in advance, sequencing notices precisely and preparing enforcement strategies alongside termination decisions. Anticipating likely counterclaims is essential to neutralising risk.

Containment Is a Strategy, Not a Reaction

Across all development disputes, the common thread is delay in taking decisive, informed action. Developers who successfully contain disputes typically act early, preserve evidence, maintain commercial momentum and deploy litigation strategically rather than emotionally.

Handled properly, disputes can often be resolved without stopping the build or destroying value.

When to Take Early Advice

Early dispute advice should be considered where a project begins to fall behind programme, a contractor or consultant relationship deteriorates, a JV partner obstructs progress, a neighbour threatens injunctive relief or funders begin posturing.

In many cases, early legal input costs significantly less than recovery once a dispute has escalated and leverage has been lost.

How We Help Developers

We advise property developers on high-value, time-sensitive disputes, with a focus on protecting control, preserving momentum and enforcing rights without unnecessary disruption.

Where a development is under threat, early strategic advice can make the difference between containment and collapse.

Please email wewillhelp@jonathanlea.net providing us with any relevant information or call us on 01444 708640. After this call, we can then email you a scope of work, fee estimate (or fixed fee quote if possible), and confirmation of any other points or information mentioned on the call.

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This article is intended for general information only, applies to the law at the time of publication, is not specific to the facts of your case and is not intended to be a replacement for legal advice. It is recommended that specific professional advice is sought before relying on any of the information given. © Jonathan Lea Limited. 

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