some legal advice - been gazumped

p00hbear

Hi,

Need some advice about my current situation and I hope any lawyers/solictors in the know will be able to help.

I recently put down a reservation deposit to secure a flat - having been told some investors were interested but had not put down any money. The flat was to be completed in August. The form was signed and amount had been taken. Today I find out from my broker who tried to initiate a valuation that the property has been sold to the investors and the holding amount has been refunded to me without my knowledge.

I'm disgusted as I wasnt informed by the developers. I've heard without a contract (and before exhange/completion) that it will be hard to fight for this flat but there must be something binding about the reservation agreement? Or else why have it. I feel I have been strung along and it was never there intention to sell as the remaining properties (2) were probably always going to the investor and I was a backup plan as it was nearing the end of the phase.

Let me know what you think I can do? I will be seeking some advice with the solictors that was recommended by the developer (I'm wondering which side they will be on i.e I think they are independent but I think they get their business from them) - they were quite insistent on using them! I want to still go for the property but at the minimum get some compensation for this complete waste of my time.

PS the reservation agreement had a holding date that hasnt expired yet i.e. not for another 3 weeks.

lynzpower

Im not sure on this one, although I am not a lawyer. The deposit I guess is for you to reserve it, as you say nothing is in stone till exchange & completion. looks like you have been stuffed. have you had OIP? Or done a survey? any costs incurred on your part yet? have you paid soicitors? if you have there *may* be grounds to sue for these, but others may be able to tell you??

Personally, I would walk away. Why the hell would you throw good money after bad? Whatever you do, dont use thier soicitors if you are already sceptical about them

p00hbear

lynzpower wrote:

Im not sure on this one, although I am not a lawyer. The deposit I guess is for you to reserve it, as you say nothing is in stone till exchange & completion. looks like you have been stuffed. have you had OIP? Or done a survey? any costs incurred on your part yet? have you paid soicitors? if you have there *may* be grounds to sue for these, but others may be able to tell you??

Personally, I would walk away. Why the hell would you throw good money after bad? Whatever you do, dont use thier soicitors if you are already sceptical about them

I still want the flat and dont think it's fair to be bullied into this - i.e. preferential treatment for investors. As a FTB it's not a good impression.

Based on NHBC site, gazumping off-plan is not very common (http://www.nhbc.co.uk/Newscentre/NewsArchive/Name,23903,en.html) - even mentioning it avoids it and based on an article on Watchdogs site, I think I do have some rights on this. See article http://www.bbc.co.uk/consumer/your_rights/housing.shtml (half way down on reservations).

Would appreciate some comments from anyone in the legal knowhow?

lynzpower

Actually the bit that your referring to I take to be this bit

the reservation fee was paid effectively as a guarantee of performance (a 'deposit') it would be non-refundable. If it was as a part payment in advance, it would be refundable.

Generally, reservation fees aren't regarded as the equivalent of a deposit. They're simply paid to secure a particular property for a specified period of time and will be repayable if the transaction doesn't go ahead.

A ten per cent deposit (non-refundable) is payable only when signed contracts for sale are formally exchanged. Developers are anxious for contracts to be exchanged as soon as possible (say within four weeks) and it will usually be a term of the contract that the deposit can be paid to them once this has happened. This aids their cash flow.

You say that the reservations deposit was returned to you, am I right?

p00hbear

lynzpower wrote:

Actually the bit that your referring to I take to be this bit
You say that the reservations deposit was returned to you, am I right?

when my broker called to let me know - this is what the developers told them.

MBNA site is down so i cannot currently check if this is the case. I may have to call - at least I should be given notice that 1) they have sold to someone else last week and not a now. and 2) that the deposit was returned.

Had a call from the sales director at HQ - so will see. Think they have made a boo boo.

lynzpower

ahwell the plot thickens

good luck with speaking to them