Hi Dub1,
I hear that you are feeling very frustrated with your solicitor, but in fairness to him/her this is not a black and white situation, and you are looking for a black and white answer.
You signed contracts that allowed for an 18 months build period. It's going to be very tricky for any solicitor to get you out of this contract. The builder has to breach a fundamental term of the contract before you can rescind it. The fact that the builder asked you to snag a house that was in no way ready is bad but it's not bad enough to be a fundamental breach. That is why your counsel said you did not have grounds to pull out.
Having said that, matters seem to have progressed more since then, and there are a couple of things I would say to you:
1. Homebond issue a number of certificates and the final certificate only issues after the house is complete and has been inspected by them.
2. The fact that your deposit is held by the solicitor for the builder as stakeholder is very positive.
3. Your job now is to hang in there, be patient, and work your way out of this situation. It won't be fixed overnight but if you do everything right you will either get all of your money back and walk away or ultimately get a house that is structurally sound.
Ok, so this is what I think you should do next:
The planning permission issue is the biggest negotiating point you have, assuming that the information you have gathered is correct. I know that you got plans from the LA, but you should be aware that the builder could have submitted plans at a later date that were substantially different. Do you definitely have the most recent set of plans approved by the LA?
Confirm that first. If you do have them, then contact your solicitor. I think it would be best to email him at this stage with the info you have gathered. Tell him that your engineer has confirmed that the properties are in breach of planning permission (make sure that your engineer is on board with this). It is likely that you solicitor will write to the other side putting this to them, and telling them that you believe this to be a fundamental breach of contract, and if they cannot provide evidence to the contrary you intend to repudiate the contract. While the builder could argue that he could still remedy this problem within the next 18 months, you will be putting him under serious pressure (he is really not going to want to address this on all the properties), and you will be building up your grounds to pull out.
Having said that Dub, I think its very unlikely that he is so obviously in breach of his planning permission ...it's pretty extreme ...
Be patient. You are in a messy situation and there are no easy answers. Work with your solicitor and you will come out the far end.
Best of luck.
Kate.