Builder in trouble

J

john m

Registered User
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98
Hi,
Can anyone tell me what the situation is when a builder hits financial trouble? If contracts have been signed but the deal not closed, 10% deposit paid and the builder goes bust. What legal standing does the buyer have? Does the signed contracts indicating the intention to sell still stand or does liquidation impact that?
 
I have a meeting organised with him and will find out then but until then its a worrying situation. I would imagine this type situation will arise more over the coming months as the building trade slows and cash flow dries up.
 
Homebond also provides cover I think under the Homebond Agreement. The builder & your property must be registered under hombond - your solicitor wouldn't have allowed the release of your deposit if they were not registered when you signed the contracts.. So if the builder goes bust then homebond provide cover in instances when the "completion notice " has not issued from the builder [when you are contacted to go snagging] and when the payment you have made does not exceed 15% of PP - it seem you only paid 10% so you would fit the criteria....but obviouly the builder would have to be actually bankrupt or insolvent before this comes into play
 
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