House purchase contract expired but not left out

R

rui

Guest
Myself and my wife entered into a contract regarding the purchase of a new house off plans last March, the developers did not sign until April 2008. We were told the house would be ready for June, then September, then latest December, then at end of December 2008 were told sometime early in the new year. The building agreement with the contract stated within 12 months which has now only expired. In the meantime our mortgage offer had expired, and when we re applied we were told we could only apply for 90% rather than 95% as originally planned. We do not have the difference. Our solictor wrote to the developers solicitors stating same, with no reply. Two weeks later we discovered we did not qualify for the mortgage, our solicitor again wrote to their solictors with the update seeking to be left out of the contract, and is awaiting the reply, 2 weeks ago. Our solicitor said it is unlikely we will be left out of the contract and is awaiting an official letter from them, even though the date has passed, and not only that we could loose our deposit but that they can sue us for the purchase price per the contract, we are lost and totally stressed.

Can anyone give us advice?
 
Have you been given a completion notice? is the house ready and the builder wants the money?

First, dont worry about being sued by the builder, it will be threaten but in most cases that's as far as it goes. Can you give more info on the builder, have they many house for sale, have they reduced prices of other houses, do you know have they sold anything recently?

I would first try and get out of the contract, this should be the main aim for your solicitor, regardless of whither you want the house or not. Completion dates are set with a flexible wording that usually are biased toward the developer, this is probably why your solicitor still says the contract is valid.

The best case scenario for you is to lose your deposit (fight to get it back, but unlikely) and forget about the house, it might be tough to lose that money, but as you agreed a price in 2008, you can be fairly assured that it has dropped by 10/15%, so your 300k purchase price is for an asset worth maybe 255k (and dropping). Losing your deposit is a small price to pay for getting out of a contract that was probably a huge mistake.

I also have to ask, why would you buy off the plans in 2008, was there not loads of other houses for sale?
 
The developer defaulted on contract. First pont. U do not have money to pay him. Second point. Take your chances with the house after that. No one is going to repossess it off you at the moment. Try and get a job and pay as much as you can in the meantime.
 
Hi, we have not been given a completion notice, awaiting official letter from the developers solictors, our solicitor expects it by tomorrow which she expects to say we are bound by the contract. regarding the builders, this is an estate of 24 houses, have apparently sold 4/5, but as of last week there is no ESB, Water or gas connected, also looked in window at weekend and no kitchen, floors and wires hanging out of walls, heard rumours that they do not have money to connect ESB etc. We would not mind losing our deposit as long as we were left out of the contract and not taken to court. Why we signed contract? We thought we were getting a good deal, were supposed to sign in December 2007 but had queries with the plans and they were very slow to respond. Also we were given a "5%"! discount if you bought off plans, more fool us. Thanks for your response.
 
Rui,

If basic utilities are not connected then your house is not "completed" under the terms of your building agreement. This is a standard condition in all planning permissions. Therefore any completion notice will be invalid.

Whether you can pull out and successfully get your deposit back - no easy answer. This is just the type of case that is being litigated on at present. If you do a search you'll finds existing threads here on similar problems:
like
http://www.askaboutmoney.com/showthread.php?t=99774&highlight=contract+mf1

and
http://www.askaboutmoney.com/showthread.php?t=95196&highlight=contract+mf1

And you won't get much better balanced and measured advice than from mf1's posts.
 
Would you still want the house if you got it at the right price? Would you considering negotiating? I managed to get my bought off plans property for €120k less than the price i originally signed for. (Well, fingers crossed just waiting to draw down mortgage.) granted it was a long stressful process but worth it in the end as far as i'm concerned.
 


Hi, glad if worked out for you, when we were told we would only get 90% mortgage and not 95% as were offered a year ago, our solicitor wrote to them asking if they would take 90%, with no reply. Later we found out we would not qualify for the 90% of the price anyway, but if they were not happy with 5% less that time i don't think they would be happy with less again, but i guess time will tell.
 

Hi, silly question - is the completion notice the same as getting a letter saying house is ready for snagging?
Thanks for tip, had a look at mf1's responses, in the above, but does not really apply to me, i am not trying to pull out cause of change of mind, or prop has less value now, but simply cause we can no longer get a mortgage for it.
 
I too had recieved the letter stating they were keeping my deposit and reserved the right to sue for loses incurred. I figured that was it. Game over and just hoped they wouldn't sue. I tried negotiating but wasn't really happening. Then a couple of months later i noticed an advert that they had reduced prices in the developenemv. So i thought i'd give it one more shot. Next thing i knew they had agreed to sell to me at the new prices. I was shocked. Still won't fully relax till keys in hand.

So hang in their and keep on at them. Its of no benefit to them holding on to the place. Maybe in back to the bank see what you can get and then give the developer you one final offer. You never know. Good luck!
 

Yes. Generally it's a notice that says you have 14 days to snag and come up with the funds to close.

Unfortunately you are one of many in a similar position. From what you say, you may be able to recind the contract because the house is not completed and the time limit has expired and maybe you should ask you solicitor to advise you specifically on this.
Try and find out the exact situation regarding ESB connection for example. Maybe ask your snagger to give a guesstimation of how long it would take to complete the house. Armed with that you would have an idea of how much beyond the 12 months the builder would need.

A lot would depend on the wording of your contract/building agreement, but also maybe on the correspondence between your solicitor and the developer's solicitor.
 
never received letter for snag up to now contract ended 12 april as it say on contract 12 calendar months!well over now dont now what to do
 
rui said:
never received letter for snag up to now contract ended 12 april as it say on contract 12 calendar months!well over now dont now what to do
Click to expand...

Depending on the terms of your contract, at this point your solicitor could serve a 28 day completion notice on the developers. If they fail to complete construction in that time, you could rescind the contract (ie treat it at an end).

It's highly likely they will dispute your entitlement to rescind. In any event, it seems you would have to sue to get your deposit back.

Talk to your solicitor.
 
Im in the exact same situation as you ..I will post any advancement in this thread ... it wont be often as this has been dragging on since the contract expired in Sept 08.
We have sent the rescind notification (2 months ago - no response from Developer) ...At the moment we are waiting for draft documentation from our barrister to commence Debt Recovery proceedings in court for the deposit.

If I had to guess I would say that the developer has gone to the wall and we will not recover our deposit.
You should try to check out if they have run out of money to finish off your development.
 


Hi,
The developers have gone into provisional liquidation since last week (which is apparently a very "grey" area), we received a letter from their sols sayin we are still bound by contract, eventhough the date on the building agreement has passed and will be in touch "soon" when house is completed. We got no reply from the provisional liquidator who was appointed, and who will prob get the funds to finish the house. Were told we could not issue the 28 day notification as we are not in a position to close (cause cant get mortgage for contract amount), so we are in limbo at the mo. Our sol is going to get a quote from a barrister for advice in our situation who has experience in this area and we are awaiting same. Will keep you updated and hope your proceedings in court go well for you, i have heard that this could take up to 2 years!
 
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