Can we be forced to close?

Hi guys,

Me and my partner put a deopist on a 2bed apartment in early 2006 and we were told that the apartemnt will be ready for possession in early 2007.

The developer called us for our first snag in first week of november 2007, we saw the apartment and it was in bits, they showed something else and now they are giving something else.

Anyway i went back to my solictor and told him that the apartment is in bits, so he wrote a letter to developers saying that we want our deposit back.

It went from bad to worse for us as my partner lost the job and now we are stuck in the situation that we will not be able to repay the mortgage.

My solicitor is telling me that if we will not go ahead with closing off, then we will loose our deposit and the builders will sue us to close the deal.

Has anybody had same expereinces, any suggestions or advice is most welsome.

Thanks

Re: Force to close deal!

If the apartment is only ready now I would presume that your mortgage offer has expired as they usually only last one year. Normally when this happens you will have to re-apply and if your partner is unemployed you may not be approved.

If you don't go ahead you can definately be sued for specific performance (to buy the apartment) which probably isn't possible if you don't have the money. The builder can also sell the apartment to someone else and if they receive less for it they can sue you for the difference (plus costs etc).

Depending on the development it may also be possible that the apartment is worth less than when you bought it. Your lending institution will usually carry out a final valuation and will loan money based on this valuation, which could be less.

I would possible consider having your solicitor write to the vendor's solicitor and explain that loan offer has expired and as one of you is now unemployed you have been refused a new loan and cannot proceed. You may lose the deposit but they might let you back out of the deal.

Re: Force to close deal!

Thanks FKH.....i am just hpoing that i will be able to get out of this....otherwise these builders will make me like a chicken and i will be running to courts and the banks...

i really hope that this sector was regulated....

thanks again....

Re: Force to close deal!

Rock786, I am fully aware of these kind of situations. I develop commercial - not residential in the UK mainly, but have been in these kind of situations previously, and despite legal opinion that I hadn't a chance of winning I did - the most recent being 1 month ago.

Firstly, and correct me if I am wrong, if they showed you the apartment you were contracted to buy and then offered you another as the first was in bits, they can't do that. You are contracted to purchase a specific property i.e. a specific address -- no other, whether it be better, worse or the same.

The fact that you contracted to buy in 2006, for completion in early 2007 is an important fact. They are now offering you your apartment in the first quartre of 2008 is not acceptable. Your circumstances have changed considerably and whilst you were able to complete in early 2007, one year later is to much for any purchaser to be drawn upon.

The conveyance laws of the UK and Ireland are somewhat similar. I am sick to the teeth of the legal fraternity telling me that you couldn't win your case in court. If the developers placed in writing that your apartment would be ready in early 2007, and now want you to take possession in 2008, I do not see any judge merely siding with a developer.

Is the developer a big or small show ?

My last case was against one of the largest housebuilders in the Uk, where I contracted at end 2005 to purchase a property for completion end 2006. No paperwork concerning the delays, but telephone calls. Time went on and competion ran till mid 2007 and then end 2007 and finally mid 2008. I got so fed up in October this year I told my solicitor I weanted my money back - he told me it wasn't possible so I told him I was paying him not vice versa, employ a barrister and to deal with the matter. I was ready willing and able to complete at the earlier dates but as my circumstances had changed and also the market, I was not interested in sorting out their cash flow or teir construction problems. THey had placed in writing when the anticipated closing date was at the beginning of the deal. This was my trump card and without going anywhere near the UK courts they repayed me my contract money, interest on this amount and refunded all my legal fees. This was against a FTSE 100 company, and I have had other instances with other very large companies who had to pay me a huge amount of money to shut me up.

If you have any further questions send me a return post or a private message.

Check the paper trail to see what they advised you. Phone calls do not matter in the case of law. Another matter - it is none of their business if your partner lost their job - the fact is 15 months later than expected and promised is not good enough. one or two months yep -- its ok -- but one year and a quartre at least they should shove it.

Let me know how you get on.

Re: Force to close deal!

Rock - By the way how bad was the property you were contracted to buy ?

Re: Force to close deal!

Rock786, you need to definatively establish the date that the building agreement was signed and whether there is a time limit specified in it for completion. Anything the builder or estate agent told you about when the property would be ready is usually irrelevant as there is normally a clause in the building agreement or clause specifically excluding such representations.

I know of situations where people paid deposits two or three years before the apartment was ready and could do nothing as there was no time limit to build specified. Unfortuantely a court will probably take the view that you signed the contract knowing this as your solicitor should have advised you if this was the case.

Re: Force to close deal!

Well the contract I signed in the instance I detailed had just that but they settled with me in order to avoid going to Court. Now they are a FTSE 100 company and they would not have settled with me if they for one iota thought they could have one.

Re: Force to close deal!

There ould be something called buyers protection. As Rock786 said that one f his partner lost his job, so this means that they are not financially able to get the deal closed.
In this situation can the builder still force the buyers to lose the deal knowing that they wont be able to repay the mortgage....??
I would think that there ould be some legal binding on the buyer.

Re: Force to close deal!

There is normally no way out. However the completion date appears to be 15 month over schedule as already explained it is a little bit of down to the fittest. An unregualed industry with no sign of manners been placed on it

I would also advise that if the apartment is 'in bits' as you say to get a surveyor to check out the property. We were in a similar situation as yourself when we first got in to see the apartment that we had paid a deposit on for 1 year and 8 months (the apartment was 6 months late, however our contract did not specify an agreed completion date).

When we finally got in to see the apartment, we knew there was something seriously wrong with it - it was also 'in bits'. Our surveyor confirmed that it breached fire safety regs among other numerous problems and was also 15-20 square metres smaller in floorspace that what we had agreed to buy. It had shrunk considerably!! Despite the developer's solicitor pushing us to sign final contracts at the time, we managed to get out of it and get our full deposit back - no contest. The numerous problems with the apartment amounted to a 'breach of contract' on the developers part and so the sale could not proceed. We were very lucky to get out of it, as other people we know in the same development signed final contracts prior to getting a full detailed survey done and now, after moving in, have realised that they too have lost c.25 square in metres in floorspace as well as having fire safety reg. breaches, leaks, broken windows, flooding issues, wiring problems etc....

Certainly, some problems with a new apartment will only be small snag issues that can be fixed by the developer and cannot get you out of the sale. A few square metres floorspace in difference will not get you out of it. On the other hand if the apartment is in as bad a state as you say it is, there could be something more serious wrong with it and a proper survey will determine what. Depending on what it is, it might give you grounds to get out on the contract and get your money back.

If you want to email me for any futher advise please do. I hope it is not the same development as we were involved with, as everyone I have come across has had serious problems with it!

The date the EA tells you in order to make the sale is irrelevant. We were told the place would be finished by christmas, and it was only completed the following September.

You need to check the contracts. That will stipulate the time the developer has to complete the house. I think in our case it was 18 months from the contracts being exchanged. The developers sat on the contracts for an extra few months after we'd signed. The upshot was that they actually had about 20 months between our signing and their being obliged to have the house completed, and over two years between us putting down the booking deposit and the house needing to be complete.