New Build contracts favour only the builders...

My daughter signed contracts for a house in a new development last Friday. At her solicitors meeting he said, frankly, that the contracts did nothing to protect her interests, that they were all in the builders favour but that the good news that she was in the same boat as thousands of others round the country who are having to sign contracts in order to buy their new home!

Basically he said that there is a mention of management fees in the contract but they cannot say how much they will be at this stage. Secondly they do not give specific dimensions of the house but rather, on enquiry, tell you rather rudely to go measure up the showhouse... Thirdly the contract says that the only obligation on them re the snag list is that they will issue a letter to the buyer acknowledging the snag list with (presumably!) a promise to fix them and on receipt of that letter the buyer must complete the contract within the specificed period (I think 7 or 14 days)...

Am I mad or is the world going crazy?? I thought it was a buyers market out there!! Seems its still all in the hands of the builders. And all this was agreed with the Law Society. Huh!

I don't understand what your point is?

If you are this cross about this, then why not tell your daughter not to sign the contract but to buy somewhere else?

The points you seem particularly cross about, in the second paragraph, are not standard clauses - they are quite specific to this contract. They were not agreed with the Law Society.

It does sound as if this particular builder is either (a) in a position to dictate his own terms as he has a line of willing purchasers or (b) has not grasped that there is a slowdown.

mf

Hi Mf1

I guess Im just cross at the way the builder seems to have all the cards stacked in their favour. I have never bought a new house myself so Im only relating what the solicitor commented to her about all 'new build' contracts being like this.

Perhaps you are right in that this builder has a line of willing purchasers so knows that he can get away with these clauses. If so I guess it proves the point that if you want a particular house in a particular area then you have to put up with this kind of thing. Still doesnt make it right though IMO

but the builder only has the cards stacked in their favour if people bother signing the contracts as is!
your daughter should walk away and say she won't sign until the contract is changed, her solicitor has done the right thing bringing these points up, there are thousands of other houses out there waiting to be bought, unless the estate is nearly finished i wouldn't buy anything off plan at the moment as who knows if they'll ever get built!

Ris said:

...
Am I mad or is the world going crazy?? I thought it was a buyers market out there!! Seems its still all in the hands of the builders...

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No, but I think your daughter is to sign an open-ended ill-defined contract that gives her zero protection.

It sounds as if the builder can deliver a half-built dog-kennel to her as her new home and she has no redress.

Its not surprising that vendors and developers are taking the opportunity to vary contracts totally in their favour when there appears to be so many buyers out there whose only motivation in hiring a solicitor is to get the lowest conveyancing fees at all costs, and to hell with the quality of the advice (if any) that they receive from their solicitor in respect of the conveyance.

ubiquitous said:

Its not surprising that vendors and developers are taking the opportunity to vary contracts totally in their favour when there appears to be so many buyers out there whose only motivation in hiring a solicitor is to get the lowest conveyancing fees at all costs, and to hell with the quality of the advice (if any) that they receive from their solicitor in respect of the conveyance.

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Imagine trying to get a job done at the lowest cost.

I have bought two properties off the plans. First solicitor I used was recommended and was not the cheapest. He just wanted me to sign the contract and his reply to every question was 'its just standard'. He wouldn't even have pointed out alot of things unless I asked. I actually had to presuade him to contact the builders solicitor to try and renegotiate some clauses. I wouldn't mind but I was paying for it as was not on a fixed conveyancing fee.

Second one I used was the cheapest of 4 quotes. He went through the contract pointing out clauses that he said I needed to be aware of. He explained that like he always does, he was going to make changes on the contract and send it back and see what he can get away with and then leave it up to me on whether to sign it or not. I told him the first story and he told me he used to act for a developer. He said that over 90% of contracts he sent out with every sort of clause in his clients favour contained in the contract were sent back signed without any attempt to negotiate.

Thats interesting Sunny. Sounds like you got a good solicitor there. Hope it works out.

Its not surprising that vendors and developers are taking the opportunity to vary contracts totally in their favour when there appears to be so many buyers out there whose only motivation in hiring a solicitor is to get the lowest conveyancing fees at all costs, and to hell with the quality of the advice (if any) that they receive from their solicitor in respect of the conveyance.

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I dont think thats fair really. Most young people buying a house for the first time are inexperienced and are unsure of their rights. When they employ a Solicitor they presume that the Solicitor will act in their best interests unless proven not to. The Solicitor did point out the relevant clauses with the contract but also mentioned that this was quite universal with many builders of new homes and that the options were to sign the contract or try and negotiate and run the risk of losing the house. Of course the choice was hers but somehow it felt like Hobsons choice....

The builder is a very large company and well known on the housing circuit. They have built several major developments so at least thats in their favour. There would probably be no shortage of takers for the houses as they were at a good rate with lots of disappointed people who couldnt get what they wanted.

The house was bought off plan but is, in fact, actually built at this stage. It was at the end of the showhouse block. It doesnt have its 'innards' yet but the structure is up.

Thanks for all the responses. Its a tough world out there for the young ones!

Many solicitors are in the pockets of big developers because the developers generate much of their conveyancing turnover. That it why it is important that people are particularly selective when they engage a solicitor and why they should not choose solely on the basis of cheapest price.

Seems like you would a very hard time getting this builder to fix any snags at all. If it were me I'd walk away from it to be honest. Lots of choice in the market now.