Yet another form of gazumping, anyone any experience of this?

W

willalex

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This relates to “NEW BUILD” scenario only and unscrupulous Builder.

I put down a booking deposit for a new house. For reasons beyond my control the contract was returned a bit late. Nothing too unusual my Solicitor informed me and deals typically proceed to closure.

However, my Solicitor was informed on receipt of the contract, that they had instructed the builder to put the property back on the open market and would not sign the contract.

Significantly, at this stage he had NOT returned by initial booking deposit and the auctioneers informed me that they had NO instruction to put the property back on the open market.

Despite calls and pleads to the auctioneer and vendor’s Solicitor; I was informed that the builder would not proceed. A deed done, in the faith of the booking deposit, was off.

Eventually I got my booking deposit back. The property remained off the market for several weeks but is now available and included as part of the final phrase for release, for a price of €50K more than we agreed.

Ironically, the auctioneers are connected with a former Minister for the Environment, who when as Minister, was asked to bring in anti-gazumping legislation, responded by saying that it was not necessary and that the building industry would “self- regulate” under some IHBA code.

I know the booking deposit is not binding. But what the builder has done is in my opinion a disgrace. The auctioneers and solicitors will gain as % of fees are based on selling price. The only loser is the honest customer. Anyone else got a similar experience?
 
Re: Yet another form of Gazumping, anyone any experience of this ?

As far as i can see there is no protection for property buyer , whats needed is an IFSRA type authority to regulate estate agents and builders. The banks were self regulatiing for a long time and we have seen how good a job they did!! As long as the politicians are sipping champers in the fat cat builder tent at the Galway races this isn't likely to happen any time soon.....
 
Re: Yet another form of Gazumping, anyone any experience of this ?

Not personally no...but I've heard of his from time to time.....its ugly but that's was is allowed. Likewise what if you had put down your deposit the situation now is such that if you did not wish to proceed with the purchase then you could get your deposit back.

it works both ways but in a rising market....only the seller gains right now.

ninsaga
 
Re: Yet another form of Gazumping, anyone any experience of this ?

VAn,

I thought that the 70s were the bad old days in relation to politicians and builders in this country. Clearly not much has changed.
 
Ninsaga,

While it works both ways, there has not been an instance in the last 16 years or so where the seller would not have gained by the purchaser not proceeding.

Booking deposits are a signal of good intent. Unfortunately, sometimes the buyer will have to pull out, e.g. financing problems etc.


Nobody puts down a deposit, proceeds with contracts, valuations, loan approval etc without the reasonable assumption that the deal will conclude.

Had the booking deposit been returned in advance of all the finalised paper work, then the signal of the builder's intent would have been clear and I would have accepted matters.


Clearly it need regulating.
 
While I have sympathy for the OP, this

While it works both ways, there has not been an instance in the last 16 years or so where the seller would not have gained by the purchaser not proceeding.
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is simply not true. I have seen many vendors, delighted to have sold their house, give me instructions to send out contracts only to have the purchaser delay and delay signing and eventually pull out. One recent unlucky couple I acted for went sale agreed 5 times before they found a purchaser who actually completed. That meant 4 sets of contracts returned, 4 periods of waiting for a purchasers empty promises to be fulfilled to no avail. Vendors often have pressing needs for selling, whether that be because they have found a dream house they want to buy or whether they cannot afford to keep up payments on a house, or they need to relocate because of a job change. Its not all one sided.

Both vendor and purchaser should be clear that a booking deposit is simply not binding and that if there is an untoward delay in either issuing or signing contracts thereafter there is often a problem. My advice to both purchasers and vendors is to set a time limit for issue and signing of contracts and if this is not adhered to, walk away, put the property back on the market, look for something else. If then contracts ARE exchanged shortly thereafter, great, if not, at least no one is being led up the garden path.
 
Vanilla,

For clarity:

I am talking here in the context of "NEW BUILD" only.

i.e. Transactions between a builder and buyer.

Such transactions are typically 1st time buyers.



Now wearing your "auctioneer's hat" tell me that it is incorrect to say a builder would not have gained over the last sixteen years by not concluding a deal after the booking deposit ?

There is another interesting thread on here were someone paid a booking deposit only to be told a few days later that the builder had decided to hold back 50% of the property for a later phase. What buyer benefitted there ?
 
willalex said:
Vanilla,

Now wearing your "auctioneer's hat" tell me that it is incorrect to say a builder would not have gained over the last sixteen years by not concluding a deal after the booking deposit ?
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I believe Vanilla is a solicitor (or other legal type, I get confused as to the differences between solicitors, barristers etc.) so won't have an "auctioneer's hat" as such.
 
Willalex,

Don't be surprised by Vanilla's comment. Like you stated, both Solicitors and Auctiooneers gain financially by the builder's action. Greed and morals don't mix.

You have my sympathy.
 
Folks, please keep the comments civil and repect the contributions of others.

I have also noted that willalex and Fabio have registered from the same IP address and have strikingly similar e-mail addresses.
 
willalex said:
For reasons beyond my control the contract was returned a bit late.
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Willalex - care to provide further details on this? Whatever the reasoning behind you delaying returning the contract, it may have looked to the vendor that there was not much good faith on your part.

Did you inform the vendor that you were going to delay the return of the contract? Or did you just hold back on the contract and send it in late?

While it's unfortunate that you didn't get your house, it's a bit rich for you to be calling for regulation. If there were regulations in place in this situation, and you missed your date for returning your contract, you'd have been a loser again - and possibly with regulation may have lost your booking deposit.

More information required please......
 
willalex said:
I put down a booking deposit for a new house. For reasons beyond my control the contract was returned a bit late.
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I really feel for you Willalex. However, a bit late is still late. I would love to know the developer so that I would avoid them at all costs.
 
jellyshots said:
I recently went through something a little similar to what you have experienced so you have my sympathy but as angry as you are right now there is always another house or apartment out there. In my case I'm starting to think the builder done me a favour because I have found somewhere better.

http://www.askaboutmoney.com/showthread.php?t=25463
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Quite true, if it was "meant" to happen it would.
 
As Janet mentioned, I'm a solicitor, not an auctioneer. For the main part, solicitors no longer charge by %, because of the rising market and competition, therefore it is not in solicitors interests to be partial to gazumping. As a solicitor who has done a fair bit of acting for developers in my time, I can say that it would be normal to charge a flat fee per sale, that an aborted sale would not be ( in general) a profit making file for a solicitor, and again, therefore it would not be in my interests to somehow be complicit in gazumping. Furthermore, Ronan D John has made a valid point, if you were late, you were late, end of story.
 
Ronan,

I was trying to avoid making the thread too long winded. I don’t want to go name calling but here is a summary;


The lending agent issued FIVE versions of the loan offer before it was correct and my solicitor would let me proceed to sign contracts. Example of errors, wrong address for new property shown. Specified an annuity mortgage instead of flexi term (i.e. interest only loan).

There was correspondence between both solicitors, and my solicitor kept them posted that we were anxious to proceed (I was not waiting to sell another property). My Solicitor sent them evidence that we had approval for a 100% mortgage.

We got a deadline to have the cheque and contract in by close of business on a given date. I went to the lending agent with a letter of authority from my Solicitor to collect, in person, the correct paperwork. While we had the paper work and contract for the final deadline, it meant that the cheque would take 3 to 4 working days to draw down. My Solicitor informed them of the position and that the cheque would follow shortly.

Having gone through all the hassle, they then returned my cheque saying the deal was off (but still hadn’t returned my booking deposit!).

To add insult to injury, the lending agent charged me interest on the money drawn down despite their incompetence contributing largely to the situation.
 
Redo,

I intend bring the matter up via the media (Joe Duffy/Pat Kenny show) but don't wish to name anyone at this stage.
 
Vanilla,

I am connected through work to legal services. The pratice is to charge on a time spent basis. As such fees are higher when deals go beyond specified dates.

If every deal that was late was aborted I wonder what percentage would ever close.

Where the other party is kept posted on matters is it not reasonable where your deposit is held in the builders bank account to assume that the deal is still on ?
 
Isn't the point here that both parties should act reasonable ?

Most builders do but it seems clear to me that Willalex had every intention to conclude the deal. The builder had the option to accept the contract etc albeit outside the guideline date.

What was the builder's motive in not concluding the deal ?

It's very cold hearted to say late is late. Hiccups happen.

Therefore who has and hasn't acted reasonable ? It seems obvious to me.
 
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