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Bought An Apartment Off Plan That I Can't Get A Mortgage For!
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clady
Posts: 4 Newbie
I put 10% down on an apartment last year which is due to be built next year. My financial circumstances have changed and i won't be able to buy it let alone get a mortgage for it. I know i will probabely lose the deposit which i have accepted. Just wanted to know what will happen if i don't buy the apartment. Can they take me to court or will they be happy to have my deposit given the current housing situation. Please help i'm very worried
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Oh dear. Well when you say you put down 10% deposit, have you actually exchanged contracts on it?0
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Did your solicitor tell you what could happen?0
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Well yes contract signed at 10% deposit stage. Can they take me to court as i own another property, not that they are likely to get any equity out of that0
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Ask your solicitor if your contract is assignable; if it is you could sell the property on to someone else without completing on it yourself.
Your solicitor should have warned you that there was a risk involved in exchanging without being able to have a mortgage offer in place for completion.
The builder could take you to court, this was discussed in the Times on Sunday, there is always the risk that the judge could say that the loss to you in losing your deposit is more detrimental than the builder losing a buyer, but the normal course of events is for you to forfeit your deposit and the builder to resell. Theoretically the judge could order you to be liable for the difference in price between that which you agreed and that which they eventually get for the place, but that would be the builder having their cake and eating it. In view of the way that builders artificially inflate their prices it is most likely that the builders will walk away with your deposit.
Depending on the sort of mortgage you can get, it could be worth trying to negotiate with them.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
I normally agree with silvercar, who certainly knows her stuff, but she said: "Theoretically the judge could order you to be liable for the difference in price between that which you agreed and that which they [the builders] eventually get for the place"
I think she's trying to be too kind to you. That's the law, nothing theoretical about it. The court will have to take that view.No reliance should be placed on the above! Absolutely none, do you hear?0 -
I normally agree with silvercar, who certainly knows her stuff, but she said: "Theoretically the judge could order you to be liable for the difference in price between that which you agreed and that which they [the builders] eventually get for the place"
I think she's trying to be too kind to you. That's the law, nothing theoretical about it. The court will have to take that view.
I would have agreed with you until I read an article in the Times at the weekend. There has been a court case where the judge actually decided that the loss to the (non-) buyer was so much greater than the loss to the builder that there was no obligation to complete. This was a one -off and the normal ruling is apparently that the (non-) buyer loses the deposit but the builder can't claim anymore than that. Although this means that the builder is getting the deposit without having to part with anything this is a s per the contract. There was nomention of the buyer being liable for anything further.
Did surprise me when I read it. If anyone can cope with Times searching it was in the property section question area, friday, saturday or sunday this week.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
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Very interesting, thanks. That's saved me looking through all the recycling.
That article was in response to a particularly narrow question: " I know that I have signed a contract, but is there anything I can do to get my deposit back?" The conclusion was: "The default position is always that if you do not pay the balance of the purchase price, you lose your deposit. "
I wonder whether there was more in the answer that got edited out, perhaps? I certainly thought that the vendor would have an action for damages to seek any loss suffered.
This seems a pretty authoritative article (based on Scots law):
http://www.rics.org/RICSWEB/getpage.aspx?p=NhXuWOmm20q8hP8GfYWU7QNo reliance should be placed on the above! Absolutely none, do you hear?0 -
Need legal interpretation here, but my opinion would be that 7.5.2 gives the seller the right to end the contract and keep the deposit. If the seller chooses to do this, he has accepted the deposit as his recompense for the breach of contract and can't ask for more? Sellers only other option would be to go to court to enforce the contract, but if the buyer can't produce the money there is little a judge could do. I wonder if it would be different if the buyer could get a mortgage but chose not to? Could the seller then demand that the buyer goes ahead? It would make sense if prices have dropped more than 10%.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
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So it seems that in Scotland, the missives are letters between solicitors and the buyer can be liable for any losses that a seller suffers. In England and Wales the contract of exchange specifies the forfeit of deposit if buyer fails to complete, so there is possibly less opportunity for the seller to pursue the buyer for losses incurred.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
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