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Cannot complete on off plan contract
manintrouble
Posts: 2 Newbie
Hi i need some advice. I am a first time investor in the off plan market. I invested my life savings (£30k) as part of a deposit in an off plan in 2006. Now it is time to complete the lenders have decided not to lend on contracts that were reassigned. My contract is 3rd in line.
A bought from the developer for £200k.
A sold to b for £280k.
B sold to me for £350k
i have no access to additional funds. I was relying on a mortgage to complete.
What is my worst case scenario ? will i lose my deposit or do i have a case ?
Any advice would be grateful.
A bought from the developer for £200k.
A sold to b for £280k.
B sold to me for £350k
i have no access to additional funds. I was relying on a mortgage to complete.
What is my worst case scenario ? will i lose my deposit or do i have a case ?
Any advice would be grateful.
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Comments
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What is my worst case scenario ?
B comes after you for breach of contract.
A comes after B for breach of contract.
Developer comes after A for breach of contract.
A, B and C go bankrupt. Developer goes bust.
People on this forum talk of "greed", others talk of "hugs" and offer sympathy.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 -
Who actually owns the property at the moment? B, presumably cannot come after you for failing to buy until they are the owner and if they can not get the finance together then they are not in a position to sell?0
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B comes after you for breach of contract.
A comes after B for breach of contract.
Developer comes after A for breach of contract.
A, B and C go bankrupt. Developer goes bust.
People on this forum talk of "greed", others talk of "hugs" and offer sympathy.
Surely A and B would have both paid deposits which they could stand to loose?
The net result will be that the developer gets to keep A's deposit and resell to someone else, and that A, B & C would all loose their deposits, but A would keep B's deposit and B would keep C's deposit.0 -
forget abc, you bought a 350k house, with 'life savings' of 30k.
should of bought a 2 up 2 down for 80k, less riskTarget Savings by end 2009: 20,000
current savings: 20,500 (target hit yippee!)
Debts: 8000 (student loan so doesnt count)
new target savings by Feb 2010: 30,0000 -
What's the worst scenario - depends on your current situation.
Let's take a situation where you signed a contract for £350k and it's now valued at £250k, and would be put on the market and sold quickly at £220k.
You'd owe £350k-£220k+costs (£10k?). So £140k.
Less your deposit of £30k, that's £110k still to find.
Now, do you have a house? A home? Let's say that's worth £100k, but a quick sale would get £80k.
So they take/sell that and it gets £80k, or £70k after costs.
So, we're still £40k short.
They can shake you upside down ... but there's nothing left to give.
You still owe the £40k, so now you decide whether to check out the bankruptcy route, or borrow the money from family/friends.
That's the worst.... kind of.0 -
manintrouble wrote: »Hi i need some advice. I am a first time investor in the off plan market. I invested my life savings (£30k) as part of a deposit in an off plan in 2006. Now it is time to complete the lenders have decided not to lend on contracts that were reassigned. My contract is 3rd in line.
A bought from the developer for £200k.
A sold to b for £280k.
B sold to me for £350k
i have no access to additional funds. I was relying on a mortgage to complete.
What is my worst case scenario ? will i lose my deposit or do i have a case ?
Any advice would be grateful.
So you contracted to buy a £200k property for £350k.
Why?0 -
Surely A and B would have both paid deposits which they could stand to loose?
The net result will be that the developer gets to keep A's deposit and resell to someone else, and that A, B & C would all loose their deposits, but A would keep B's deposit and B would keep C's deposit.
But if B can't complete the purchase from A then they cant sell to C, so C would get the deposit back as B has breached contract.
Am I missing something here? Surely B cannot argue they are using the money from C to buy from A to sell to C?0 -
mynameisdave wrote: »But if B can't complete the purchase from A then they cant sell to C, so C would get the deposit back as B has breached contract.
Am I missing something here? Surely B cannot argue they are using the money from C to buy from A to sell to C?
I'm trying to think of a similar type of scenario so I can figure out the logic behind this chain of linked transactions.
It's sort of similar to a normal house "chain" but in a normal chain each party already owns the asset they are selling.
This scenario is different because there is only ONE actual asset, so it's pretty confusing to say the least!0 -
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It depends on how the contracts were structured. It could be a A to B to C scenario or it could easily be a developer to C scenario. Who has paid whom, how much and for what needs to be established.
Where was your lawyer when you entered into this farce ?0
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