The Gazundering Challenge

neverdespairgirl

ukmarkwilson wrote: »

My big worries are;
a) can we get an 85-90% LTV residential, interest-only mortgage? If the answer is yes, we will save ourselves £27'500 in deposit and any potential penalties, legal fees, etc.
b) is it likely that the lender will find out we are not living there and, if so, what would they be able to do to us? I'm not willing to go to prison for this!

It's fraud. So think very, very carefully, and don't do it!

Have you taken independent advice, from a solicitor other than the one who advised you to sign the original contract?

Mr_Matey

Hi Mark,
Sorry to hear about the bad news on the deposit front.

I'm not sure whether you can get that kind of mortgage, best to speak to banks etc, but I'd imagine it's unlikely.

Before you make any rash decisions, I would discuss your situation in more detail with the builders. Give them your story, how you used your inheritance on the deposit and can't raise a mortgage because of the credit crunch. Let them know that you would like to complete on the deal but just can't get finance and would be facing bankruptcy if they proceeded with legal action.

Maybe they will see that they would be wasting their time by taking you to court. Either way it's going to be a tough lesson learnt as you will lose your initial deposit.

If they continue to threaten legal action, you should seek some independent legal advice and review the contract in more depth. For example is there a clause for if you can't raise a mortgage?

Finally I would strongly advise against going for the fraud option. Like you said it's not worth going to gaol over.

ukmarkwilson

I've actually done just that - I had a good, nicey, nicey chat with the builders and they laid out the lie of the land. Obviously, it's not their fault so I didn't try to mess them about, but laid on thick the human side of the situation (inheritance money, loss of investments, saving for a wedding, etc).

Telford Homes have rightly said they are not a charity but a business and their board have (maybe not so rightly) said that they are not refunding any buyers deposits, not reducing the prices of any of the properties and are not helping anybody financially - they will simply pass on the details of an IFA.

I am hoping that they will see that we are in an impossible situation and take kindly to our plight. I don't imagine they will refund us our deposit - I'd like to think they will keep the initial holding fee, funds to cover some legal costs and a bit for their troubles and give us back something. Failing that, I am hoping that I can get in touch with a property investor who would be willing to give us 50%+ for our share (anyone know of any interested parties who have £15'000 and want a 2-bed, 2-bath brand new flat in Bow?).

I'd rather learn the lesson in a casino - at least I have some idea of the risks, can learn the odds and would be able to risk an amount of my own choosing. This situation has been taken out of my hands entirely.

I have another solicitor I can speak to, so I will contact him tomorrow. Thanks again for all the advice - updates to follow...

brit1234

You need as much legal advise as you can get also remember you can get advice free from shelter and Citizen Advice bureua.

The way I see it is that your deposit is gone without a big fight. Take the risk suffer the falls. However that should be where it ends. Through no fault of your own you can't get a mortgage where at the time of putting the deposit you could. You have done nothing wrong (apart from considering buy to let:mad:) No right minded criminal judge would go against if you put this story up in court so I can't really see a civil judge bankrupting you for no fault of your own. They are trying to bully you becase they are finacially in big trouble.

Have a read of this article, your case seems to be very common now.

http://property.timesonline.co.uk/tol/life_and_style/property/article4913206.ece

ukmarkwilson

Hi all,

(Possibly) a final update on this. I hope it has proved entertaining / curious thus far!

Telford Homes have so far;

1. refused to reduce the asking price
2. refused to accept 2 payments rather than 1 for the difference between what we have paid already and what we need to make up for the mortgage
3. refused to allow me to sell our 10% 'stake' to another buyer
4. refused to grant us an extension on the completion date
5. refused to offer us any refund at all
6. decided to threeaten me with legal action if I do not complete by 4pm on the 30th of January

Not good. My solicitor is now not answering my calls, the Citizens Advice Bureau is constantly engaged and my fiancee and I are going through sleepless nights thinking about what might happen to us. *sigh*

Well, I for one am not going out without a fight - I have a 100% record in court cases, absolutely detest this kind of corporate hubris and feel I have a reasonable case, if I'm put in front of a judge and jury.

Their intransigence versus my eagerness to complete should be a solid basis - but what do you guys ('n gals) think?

So far, I have been really impressed with the responses, so thank you all... :beer:

MissMoneypenny

Mark, if it was me, I would go and see a solicitor who specialises in contracts, pronto.

I know it will cost you more money, but you really need some sound legal advice.

scrummy_mummy_2

I always apply the same criteria before I decide what to do in this sort of case....If I was the judge, how would I find?....if I think I stand a reasonable chance I'd say, lwt them bring it on. It'll take months for them to sue for breach of contrwact (if they actually bother to!)
I think you're probably up for losing them what you've paid them so far though!
I'd go to court.

ukmarkwilson

Both good pieces of advice.

I tried my local Citizens Advice Bureau, but they are not open at the moment. So I posted a question for JustAnswer - it looks like a really good site! They will provide you with an answer or contact you to discuss the situation once you have agreed how much you would pay if they gave you a satisfactory answer. Will see what happens.

If I were a judge, I would probably say "Well, you signed the contract, you knew what you were getting into so you don't get a penny back. However, Telford Homes have not helped the buyer in any way and because this has prevented any completion taking place, they should be penalised and refund a portion of the deposit (say, £3k)." I wouldn't know how the cards would fall when it came to legal fees though, so that could end up costing me, which is not an option as I can't spare the money.

GDB2222

ukmarkwilson wrote: »

Both good pieces of advice.

I tried my local Citizens Advice Bureau, but they are not open at the moment. So I posted a question for JustAnswer - it looks like a really good site! They will provide you with an answer or contact you to discuss the situation once you have agreed how much you would pay if they gave you a satisfactory answer. Will see what happens.

If I were a judge, I would probably say "Well, you signed the contract, you knew what you were getting into so you don't get a penny back. However, Telford Homes have not helped the buyer in any way and because this has prevented any completion taking place, they should be penalised and refund a portion of the deposit (say, £3k)." I wouldn't know how the cards would fall when it came to legal fees though, so that could end up costing me, which is not an option as I can't spare the money.

No, that's not what the judge will say, I fear. I think he'll say that you have not performed your contract. By the time this comes to court, Telford will have meanwhile sold the property to someone else for say £100k less than you contracted to buy it for. So, the judge will order you to pay the £100k, less the deposit you already paid. Plus you'll be liable for all the court costs, legal fees, etc.

The only way for you to win this is to make new law, along the lines that the contract was so one-sided it should be overthrown. As a litigant in person, you have no chance of doing this. Remember, this is the high court in all probability, not your local county court doing a small claim. So, your 100% track record is not going to get you very far.

I say all this not to upset you - you're probably pretty upset already. I say it to suggest that you think carefully about the following plan. What I suggest is that you borrow absolutely as much money as you possibly can, then splurge it all on the very best lawyers you can find. At the very least, you no longer have any assets worth pursuing, so Telford will probably leave you alone. At best, you may possibly win. Representing yourself is a mug's game, because all you do is end up saving some money for Telford's benefit and make yourself a more attractive target.

mrgerrard

Have you considered writing to your MP or your local newspaper? A lot of posters have commented that you are in a dicey legal position, however I am sure home developers would be afraid of some very bad publicity!