refundable deposit?

[selfbuild]

Hi all,

My wife & I have PPR and decided to invest in another property that was to be built. The intention is to rent out this 2nd house. We have signed contracts; paid 10 % deposit and the house should be ready in 2 months.

An opportunity has now arisen for us to buy a site and build a house on it – ultimately this is what we would both like. What are the chances of us being able to get out of purchase of investment property (and get deposit back) so we can purchase the site and build (while keeping our ppr to rent out when house is built).

Thanks

 

[Cyrstal]

I have no idea if this deposit is refundable? Should you contact your solicitor to see what the story is with refunding deposits?

 

[Vanilla]

Your first port of call should be to your solicitor to make certain that an unconditional contract is in place. If so, then normally this deposit is non-refundable, but in circumstances where for example the price of houses in the area has gone up since you bought off plan a developer might just allow you to bow out of the contract with none or minimal expense. So your second port of call is to contact the developer directly. Of course, if the price of houses has indeed gone up, you might consider subselling your interest in the house, which might net you a profit ( subject to CGT) or indeed holding on until completion and then selling.

 

[selfbuild]

Hi Guys,

Thanks for the advice Cyrstal - I have been in contact with my solicitor and you are right Vanilla, since the contracts have been signed I am legally obliged to carry on with the house purchase. However my solicitor also said that the seller might agree to cancel the contract, if he thought he could sell to someone else at a higher price!!!