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Can I Get My Deposit Back on New Build Property?

By: Chris Nickson - Updated: 17 Jul 2016 | comments*Discuss
 
Contract Goods Sale Of Goods And

Q.

I purchased a new build flat in October 2007 and exchanged around December 2007. The scheduled completion for the development was September 2008.

I had a mortgage offer which is due to expire on the 23rd December 2008, however the developers have overrun and now claim that completion will only occur at the earliest February 2009.

I'm now faced with not being able to find a suitable mortgage and was wondering whether I have any rights to pull out of the deal and get my deposit back or to enforce the developer to lower his price in order for me to attain a new mortgage offer?

(Mr Jonathan Toker, 26 September 2008)

A.

Because of the financial and contractual implications here, your best bet is to seek professional legal advice in the matter. It’s impossible to be specific without knowing what’s in the terms and conditions of your contract.

However, there are certain things worth noting. When you exchanged contract on the goods involved – the flat – you were given to believe that you would be able to take possession of it on completion this September.

To that end you obtained a mortgage which was largely dependent upon the goods being delivered in a reasonable time – in other words, when promised.

Now you find that the developers say that they’re not able to deliver those goods within that reasonable time. That means the offer dependent on that will expire.

So, in many ways, the Sale of Goods Act 1982 would seem to apply in this instance. That states that the goods or services must be provided with reasonable skill and care, at a reasonable charge, and within a reasonable time.

It would seem that by overrunning by five months, the goods are not being supplied within a reasonable time, leaving the developer not in compliance with the Act.

But, and this is a big but, you also need to read the contract, and whether it includes any time clauses stating a definite completion date for your flat, or whether it allows for overruns (which it might), and if so, for how long without any kind of penalty.

Since these contracts are often in legal terminology and can seem confusing or even ambiguous, you might find it a good move to consult a legal professional before deciding on your next move.

Given the current decline in the housing market, as long as the contract doesn’t weigh against you, there’s a very strong chance you’ll be able to force the developer to reduce his price.

The next part, of course, will be obtaining a new mortgage, and with the tightening of credit, unless you’re exceptionally creditworthy, that might not be so easy, and the rates will not be as good as the offer you had.

In other words, without a lot more information it’s unfortunately impossible to give you a concrete answer. But good luck with both the flat and the mortgage.

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11123 - Your Question:
Please can I get advise as my builder who commenced building a extension over a year ago,and has not been consistent with his hours blaming building control, and family problems and still we have not gone upwards for the extension.We stressed we wanted to be in in the summer this year, then he said the roof would be on one half by June,this is no where near yet,,and he has not been to site for a month,after demanding payment of which we have paid now over £47,000 once payment was made this time he made a disappearance.,I have e.mailed and texted and never get a reply.His scaffold, wheelbarrows ,scaffold are still just left but we need to know our rights with his absence.We had estimate from him but have demanded over 20 times for a completion date and full written quote but he runs away as soon as I ask these questions.Please can we get correct advise to move forward as very disturbing.

Our Response:
You need to seek legal advice on this one, the threat of court action may be the only thing that will prompt action.
ConsumerRightsExpert - 19-Jul-16 @ 12:24 PM
Please can I get advise as my builder whocommenced building a extensionover a year ago,and has not been consistent with his hours blaming building control, and family problems and still we have not gone upwards for the extension.We stressed we wanted to be in in the summer this year, then he said the roof would be on one half by June,this is no where near yet,,and he has not been to site for a month,after demanding payment of which we have paid now over £47,000 once payment was made this time he made a disappearance.,I have e.mailed and texted and never get a reply.His scaffold, wheelbarrows ,scaffold are still just left but we need to know our rights with his absence.We had estimate from him but have demanded over 20 times for a completion date and full written quote but he runs away as soon as I ask these questions.Please can we get correct advise to move forward as very disturbing.
11123 - 17-Jul-16 @ 8:43 PM
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