Sorry - no more progress on my case. I'll take solicitor's advice nearer the time and stay tuned to this thread in case any news comes through. In the meantime my understanding is the same as you detailed. The availability of mortgage is worrying - my contract has a clause stating that the sale is NOT conditional on mortgage offer.

Hello Proper Tea,

Could you do me a favour and help me out as i am also stuck the same situation as you have mentioned.

Very cleverly it looks as if the contacts have been signed and i also paid 10% deposit upftont.

Now if i do not proceed when the flat completes in Jan 2009 the builders i am told will sue me?

If you could kindley let me what happened or maybe anyone i can seek help in this matter from please.

Thanks

I've just come across this thread via google. Where is everyone buying their flats which have been so badly hit? I have two properties awaiting completion in the Jewellry Quarter in Birmingham, which has seen the biggest slump in the whole of the country. Up until just recently I genuinely thought I was going to be alright. I 'bought' the properties in Jan of last year with a completion date of late this year / early next (I phoned the developer two weeks ago and they were rather vague saying they hoped the flats would be complete within two months but to phone back in a month's time).

Thing is, I've no idea where I'm now going to get the money from to even attempt to complete. Of late I've come to accept the fact that I'm going to lose the entire 40k deposit I initially put down, but beyond that I have nothing to offer if I was sued. I had the finances in place 18months ago but an unforseen change in circumstances (i.e. investments taking a nosedive elsewhere) have let me with no spare monies and I was hoping to use the deposit and 15% reduction in price as leeway for any mortgage offer. The solicitor dealing with the transaction (who was appointed on behalf of the developer) has been suitably vague as well. I think I need some independent advice, but until I know when I actually have to pay I've not even looked into the possible mortgage options available yet.

Thanks all though, glad to see I'm not the only one in this boat.

Hi All who are awaiting outcomes,

Please see a solicitor by way of legal information, preferably someone who is not connected to the development. It will give you piece of mind in the long run and at least you know where you stand before you get to the completion date.

Good luck

Hi,

Newhausflats (newhausflats.co.uk)

Same position for me, bought two x 2 bed flats off-plan in newport gwent, each for £180000 last july looks like completion will be early 2010. Sounded great:- have en-suite, large balconies, secure parking, underfloor heating looking over river etc, paid 10% deposits, but now seems the whole market has turned i.e. losing values (i guess) and no mortgages available that will stack. I only had enough cash to secure another 5% ish against each property to complete. Im now left in an awkward situation with being unable to raise anywhere near the cash required for 75% mortgages against lower values. Stupid of me in hindsight but it is how it is now. I'm mortgaged to the max on my house (probably more than the market value) so unable to remortgage etc.... as mention here allready i would say goodbye to the deposits, live , learn and move on, but im worrried what else can happen will i be sued even if i have no assets to realise etc? can they take my house. Any advice appreciated.

Im thinking of starting a site purely for off plan issue like mine as a central point for people in the same situation (guessing hundreds) do you think this would help?

Bob

Hi,

Please see my previous post!

Find a Solicitors Firm that specialises in property and get some advice. It will put your mind at rest.

I use a firm in London and whenever I need to know anything about my legal position I contact this firm. There advise always lets me know where I stand in regards to legal matters concerning my property, its better then guessing.

Good luck

C

Appreciate your comments, but would be interested in other people that have been given advice from thier solicitors, even lawyers interpret laws/contracts differently.

What is the advice and what are the outcomes, have they bargained with developers, have they sold thier off-plan etc etc. I dont believe we should stop communicating here by just saying see a lawyer etc.

Thats why the forum is here....

Hi,

Please do not misinterpret my comment. What I meant was its good to seek advice independently! What you learn can then be shared with people on this forum and its good to share the information. However, its always best to get the final advice from a solicitor who has seen your paper work and who has had the chance to review your contract as it may defer from someone elses on here.

Good luck

I'm in the same boat ...

10% deposit paid early 2006 and contracts exchanged (Cranfield Mill, Ipswich is the development). Completion is likely to be due very early 2009 and prices have dropped. The original solicitor (developer recommended) has ceased trading and I'm trying to establish my legal position with the new solicitors that have taken over all their cases before approaching the developer. I'm hoping that completion is subject to mortgage of course.

Note: This post has been moderated, email removed. Please ensure you read the Moneysupermarket.com User Community Standards and Terms of Service before posting. Thanks.

In the same boat also, is there a way of trying to get everyone who has bought at a single developement together to see if there is a collective way to negotiate with the developer?

Position is new build apartment in London, bought off plan over 12 months ago and assumed the deal would stack up at 85LTV...this is now unlikely, as is the 'valuation'. could be £100k short !

Have been told by developer if you dont complete, you will loose deposit and sued for damages...(like everyone else on the forum I guess). Spoke to my solicitor a few days ago and he confirmed the same....

Has anyone ACTUALLY got further than this or been sued by the developer and come out the other side ?? I presume sueing you for damages is a lengthy process and surely they would prefer to negotiate.

I am in the same boat as everyone. I purchased off plan from Telford Homes for an apartment in East London across the road from the olympic village. The solicitors and mortgage brokers were recommended by Telford Homes. In retrospect I feel i was forced to use their solicitors as failure to exchange within 21 days would have resulted in a forfeit of the reservation fee £2000, and the only way to exchange in this time frame would be to use their solicitors. They also offerred a £500 cashback for using their solicitors. I am due to complete in 1 month, and and desperately trying to find a way to end my contract as I will struggle to complete:

The question of whether a developer will sue is impossible to answer at this stage. Having trawled through several forums I am yet to find a posting from anybody who has been sued by a a developer for not completing. All contracts will have a clause stating that all costs incurred and losses with be liable if the buyer does not complete. If I went to court I wonder if the following would go in my favour:

1. The solicitor used was recommended by Telford homes who provided a £500 cashback for using them. This should certainly cause some conflict of interest and thus may put less weight on the terms of the contract.

2. There was a case in 2006 where a 15% deposit was given on exchange by a buyer in Docklands who subsequently failed to complete. The buyer managed to reclaim 5% of his deposit through the courts. It was felt by the judge that a 10% loss to the buyer should be sufficient compensation for the developer and the buyer was not sued any further.

3. I wonder if the british court system would regard the buyer as a consumer, and the developer as a retailer, in which case they would act in favour of the buyer by suggesting that the 10% deposit forfeit would be sufficient compensation.

I think the developers are fully aware of these points, and I dont personally think they would be able to sue for further damages beyond the 10% deposit if this went to court. They will try all they can to encourage or scare ppl into completing, but until I hear from anybody who has actually been sued I do not believe a buyer can be sued for not completing.

It would be useful if people could reply to this posting and give details of the development they have purchased in, the name of the developer, and what outcome or response they have had.

Thanks

Hi mohsindoc

I'm contracted to buy a plot from Berkeley Homes at Caspian Wharf, just down the road from the Telford one which you've signed up to.

Since exchange last year the the difference between purchase price and the latest valuation is 140k down. Mortgage offer has since been revised downwards based on the valuations, along with the LTV so its a double whammy.

Berkeley are playing hard ball and refusing to negotiate at all. They keep citing valuations of their own, but refuse to let me have sight of them. Halifax offered to consider any other evidence, but Berkeley refuse to share these supposed positive valuations. Indeed, even by the same surveyors within a week of my own valuation. They dont return my calls or they make excuses. The valuations either don't exist, or they have something to hide is all I can conclude! I've offered them the latest RICS valuation as this is all I can get a mortgage for, or the contract price if they were to offer a superior plot which would stand up to valuation. They completely refuse to talk.

I wrote to the Chairman and got a rude letter back from the MD saying they wont renegotiate. They just threaten me on the phone and repeat that they have valuations of their own which confirm the inflated price (but refuse to prove it!).

My solicitor has correctly advised me that they can theoretically sue me for the subsequent difference in the final sale price + costs, as well as keep my deposit. I've seen an article in The Times which suggests that the courts may now be looking at who will suffer the greatest loss (buyer or seller) and may limit the loss to the deposit only. Indeed, it would seem unfair for the buyer to shoulder the full burden for something outwith his/her control (ie change in market conditions).

I've been in touch with Watchdog, writing to my MP etc. but so far this sort of thing hasn't had much press, but I've seen many many people posting here, Singing Pig forums, MoneySavingExpert forums etc to say they are in the same situation. dozens of people have reported that they are losing their deposits and being threatened with legal action, costs, etc. But no-one has reported back to say what has actually happened to them, apart from lost deposits which seem to be a sure thing.

The problem is I cannot find any recent case history to give an indication of what is happening in the real world? - are these builders carrying out their threats to sue people and if they do, how are the courts finding?

A group of some sort is a great idea if anyone is interested in getting together to try and raise this issue and get it publicised by the media etc. and put pressure on the housebuilders who are holding people to ransom.

Has anyone ever heard of the developer raising the price after exchange because the markets have risen and are now worth more then when they were bought off plan???? People complete off plan expecting to make money immediately, because that hasn't worked you are trying to get out of a legally binding contract. Why should they lose money once you've commited to purchase that property?

Shanks

Not correct - I was looking for a larger place to live in order to start a family. Not everyone who buys off plan is trying to make a quick buck. This was intended as a home for living in.

The builders will lose money either way. No-one else is going to buy the place at anything close to last year's price, so they may as well take what I can offer them. However, they may choose not to and I am looking to find out what has happened to others in this situation.

If you don't have anything useful to say, best not to post anything!

It's an objective view, this is a forum for discussion. Investing in a flat to start a family, funny if that was your priority perhaps you should have been more wise whilst purchasing a home. Through your nievity at best, stupidity at worst you have purchased a flat that you now cannot complete on, and will have to pay the financial penalty!

GOOD LUCK in not getting sued, however if i were the builders, i would be looking to exercise my legal rights laid down within the exchange contract!

Shanks