Property withdrawn by builder for more money!

I bought an apt in a new development and paid my booking deposit to the auctioneer which was cashed in June 2006, then I signed the contracts at the end of august 2006 and paid the balance of 10%. I thought everything was going to plan when I noticed that the balance had not been cashed, so I contacted my solicitor. It turns out that the builder is withdrawing the apartment that I bought and selling it in the next phase for 35K more than I bought it for, so I'm left with no apartment!! It took them 3 and a half months to comeback and tell me this so I am looking to hold someone legally accountable.

Has anyone had the same expierence? and if so what was the outcome?

Sorry-(AFAIK) you have no legal recourse as the builder did not sign the contracts.

This is a bit nasty! I thought the booking deposit held the property at the same value until contracts are signed? Surely the OP has to be given a better explanation in law then what was stated?

I thought the booking deposit held the property at the same value until contracts are signed? Surely the OP has to be given a better explanation in law then what was stated?


In broad terms, there is no binding contract in existence until both parties sign, exchange and the agreed deposit is paid. See below for the wording commonly used between the parties' solicitors/estate agents until such time as that situation is arrived at.


"Please note that we do not have any authority either express or implied to bind our clients in any way and we must emphasise that neither this correspondence nor any negotiations had between our clients shall constitute a note or memorandum within the meaning of the Statute of Frauds until such time as both contracts are signed, exchanged and a full deposit is paid."


mf

Yeah it looks like there is no legal binding agreement until the builder signs the contract which he hasnt done.....I find it very frustrating that the estate agent could sell us a property which is not for sale, and if I had picked a different apartment in the build everything would have been fine.....I had a choice of six apartments at the time!

I am going to see if there is any legally standing to hold the estate agent responsible as he was the only seller of the apartments. He actually advised us that there would be a second phase and to get in quickly as they would be more expensive!!

The EA can't be held responsible-they are not the ones actually selling the apartment, they are merely the builder's agent, and acting on their instructions. They wouldn't necessarily have been aware of the builder's intentions at the time they accepted your booking deposit, and even if they were, you would have a hard time proving that was the case.

You will of course get your booking deposit back, I don't believe there is any way to force the agent to have their client complete the sale, nor do I believe that there is any way to get compensation from the agent.

Thanks for that, I just find it unbelievable that there is no legally standing to stop a bulider doing this all the time to get more money as the markets go up and that there is no protection for the buyer when the builder decides to change his mind!

Welcome to the world of property! As you've discovered, until the contracts are signed, neither party is bound. You could have walked away too. Plus even though you paid a booking deposit in June you've only just signed the contracts so its only just happened.

Next time around, chase for contracts to issue and then chase to get them signed. Only then are you in a binding contractual situation.

mf

I think the term used is "Gasumped" and there is nothing you can do. I see it every day. And even occurs sometimes on the advise of the estate agents.

It happened to my girlfriend 6 months ago. Sorry

GaZumped is the term.