New Build Delays - What can I do ?

Lil_Dee_2

I'll try and keep this as brief as I can. So, points as they happened.

1 Jan 05 - Paid reservation fee. Expected build complete by Oct/Nov 05
2 May 05 - Exchange contract with 10% deposit.
3 Jun 05 - Problems seem to be appearing with development. People due to move in over Jul/Sep are being told there's a delay
4 Aug 05 - Builder writes to us advising delays due to 'lack of service connection to the properties'. The company contracted to complete connections not on site. Quote "We cannot use another service provider to make connections....breach of contract....serious consequences" Sales advisor on site advises we will be in for Xmas (2005 !!)
5 Sep 05 - It becomes increasingly obvious that there is a serious delay, which is not improving as contractor still not on site.
6 Nov 05 - Still being advised we will be in for Xmas
7 Dec 05 - Sales advisor admits it's probably not going to be before Xmas (although I'd gathered this for myself, even though the approx. completion dates were given as 09 Dec, then 23 Dec during my conversations in Nov)
8 Jan 06 - Receive second letter from builder advising a new contractor has been employed. Quote "some legal completions may take place by the end of February...other completions will take place in March. All completion dates are subject to services"

Yesterday I received a phone call from the sales advisor stating that the earliest we can expect to complete is April. Can I now start asking for things that they've told me I can't have (the house itself as far as I am aware in built, it is literally just the utilities aren't connected). I'm looking for things like getting the bathroom floor tiled....maybe some curtains being thrown in....not much, but just something to make me feel better about the the fact that they've held onto my £20k deposit since May last year (earning my interest) and have now delayed by nearly six months....???

Can anyone suggest if it would be reasonable to expect a little something like that in recompense ? (bearing in mind I've been paying rent, storage on furniture etc.) I'm aware the contract I signed is very one-sided on behalf of the builder, but wanted some opinions...Cheers and thanks.

lindabea

I think you have every right to some compensation including loss of interset on your deposit. Although no doubt, the builders will try and fob you off by saying the delay is outside their control, and I'm sure they will have some clause in their contract to indemnify them in such events. I suggest you seek legal advise from your solicitor and send the builders a letter informing them that if completion is not made by April, you intend to cancel your agreement and will be seeking full compensation.

Good luck - hope all this mess can be sorted amicably.

jenza8

We were in the same position as you a 9 months ago. We paid our deposit in Oct 04 and the property was due to be completed by March 05. We sold our property and were advised of a moving date towards the beginning of April. After we agreed our completion date for our old property we were advised that our new home would not be ready until the end of April. this date kept getting put back almost weekly and we ended up living at my Dad's with our furniture etc stored at various family members houses. We eventually moved in to our new home in July and were advised by our solicitor that as we had not had a legally binding completion date for the new home we would probably not be entitled to anything. Despite this we wrote to one of the directors and he agreed to pay us over £1000 to cover costs (they even paid our cattery bill!). We found out later that our neighbours were also given money to cover costs (around the same amount as us).
I think it's worth a try outlining every cost that you have incurred and send this to the managing director of your building company (ignore customer services, we've found them to be a waste of space!)
Hope this helps ... now if anyone knows a way of getting compensation to make up for 9 days of holiday taken to wait in for builders to put right major problems in our house (including conservatory being taken down and rebuilt) I'd be really grateful to hear it!

Lil_Dee_2

Linda/Jenza - Thank you for your replies. Linda- I have been on to my solicitor, and it is as I suspected The builder has us quite literally, by the 'proverbials'. There is no legal reason for them to give us anything - including a completion date at this point....even after everything that's happened.

So, and Jenza has stated, I will write to a director and see what sort of response we get from them. Hopefully, it will be something more positive than my solicitor (who, to be fair, has apologised numerous times during the conversation we had in which she told me I was in a no-win situation) who again, as you have, suggested the letter to a director.

Thanks again. And sorry, I can't help with the 9 days leave Jenza, other than sympatise, as I have exactly nine days leave saved to move into the new house....which is now not going to be ready this 'leave year' so, I will most likely not even get the chance to waste them on waiting in for builders.... :wall:

jenza8

Well good luck! Let us know if you have any luck.
Jenny (jenza8)

zappahey

This whole sorry saga is one of the things that puts me right off of new builds. It seems that the buyer carries all the risks of late completion and the builder carries none. If we had to buy new I would be pushing for a contracted completion date with penalties for delay. I can see no other area of business where delivery dates are left open ended, why should houses be any different?

jenza8

I agree it's mad that housebuilders can get away with it when other buisnesses cannot and yet so much depends on your house being ready in time i.e. the sale of your old property, possible renting fees, storage fees etc. We were unable to secure a contracted completion date, basically the builders had so much interest in the development that it was by their terms or no sale! We were so desperate to move to our village that we had to put up with their demands. We've said we'll never buy new again though - 7 months down the line and the house still has pretty major snagging work to be done.

distilled

Actually, the builder carries most of the risk. Buyers pay a relatively small deposit whilst the builder lays out cash for materials and labour. No housebuilder wants to delay completion, because its only at this point that the cash outlay is recovered. I've posted on completion dates many times.

bunking_off

Can only agree with the other posters. The builder might have a moral obligation to compensate you, but they're a business and don't work on morals, they work on the financial bottom line.

The legal bottom line is that the standard contracts don't specify a completion date, so all you can legally do is walk away and lose your 10% (actually, I'm not sure that your liability would be restricted to that...it could well be that the builder could come after you for consequential damages).

The best that you can do is appeal to their better nature. The earlier poster who got some expenses out of their builder was very lucky - my experience is once they've got your money you'll get little out of them. I guess now the market has softened you might have some luck, but certainly in the past when prices were going up my experience was that the builders were perfectly happy to goad you to walk away because they'd get both the 10% and be able to sell the property for a higher value...

One final thing : you say you think the property is substantially complete (by the way how could you not know that...surely you can go and take a look?). If so, this may not be an issue, but in general be very wary of putting too much pressure on the builders to speed up completion....quicker work = more shoddy work and you could end up like us, taking 28 months to clear all the snags.

zappahey

distilled wrote:

Actually, the builder carries most of the risk. Buyers pay a relatively small deposit whilst the builder lays out cash for materials and labour. No housebuilder wants to delay completion, because its only at this point that the cash outlay is recovered. I've posted on completion dates many times.

A reasonable point but, by the terms of the standard contract, the builder is going to get paid by the buyer no matter how long the delay. They may incur some extra financing charges and a bit of extra labour and that's about it.

In our position, if we were buying new, we would be liable for additional rental costs (significantly higher than our mortgage costs) plus the risk of having to renegotiate our mortgage offer if any delay extends. For sellers there is a risk of the chain collapsing due to delay and for us renters the risk of having to find new, short term accommodation, all of which can be expensive and potentially very stressful.

If the builder delays for an unreasonably long period we have no right to walk away, no matter what the inconvenience, without losing any deposit which, incidentally, the builder is hanging on to for quite some time. If there was a long delay in completion on a resale home, the buyer still retains the ultimate sanction of walking away with the wallet largely intact.

We were advised that we would be given two weeks notice of house completion and would be expected to legally complete at that time no matter how much that differed from the original forecast completion date nor how inconvenient it might be.

It's quite clear that the builders are stacking the risk profile heavily in their favour. While I recognise that it is in the builder's interest to complete in good time, in the event of unavoidable delay, most of the pain lies with the buyer.

bunking_off

zappahey, couldn't agree more. And don't forget, when it comes to completion (at least on the legal advice I got), short of the house being unsafe, you've no choice but to let the completion go ahead and let the builder make good any snags once they've got your money. Can you imagine? Going to pick up your new car and having to accept it despite a dent in the wing, because it has 4 wheels and an engine?

My experience is that builders purposely release houses which aren't debugged, on the basis that it's better to have the money in their bank and resolve any issues at their leisure. Why do the job properly first time when you can rush the job and finance the repairs with the interest received from the purchase price? (I live on an estate constructed by 3 different builders and the practise seems common across them all)