Foul Play/case for legal action

GDB2222

Surely, the OP's loss is pretty substantial? If he had sold the house himself for £140k, he would have obtained possibly a 10% reduction on the price of his new house. That's presumably £10-20k. He'd have had to pay the EA's fee, but he could still easily be £10k out of pocket. I can't understand why people are suggesting that this isn't worth pursuing. Obviously, we have more of those Russian oligarchs on this board than I realised.

CapJ

GDB2222 wrote: »

Surely, the OP's loss is pretty substantial? If he had sold the house himself for £140k, he would have obtained possibly a 10% reduction on the price of his new house. That's presumably £10-20k. He'd have had to pay the EA's fee, but he could still easily be £10k out of pocket. I can't understand why people are suggesting that this isn't worth pursuing. Obviously, we have more of those Russian oligarchs on this board than I realised.

In general I agree the potential loss is quite substantial, but...

Proving it is a different matter. He needs the developer to say that if he had sold the house himself they would have given him 10% off the new one. I doubt they would admit it and proving it otherwise is difficult.

That is why I am saying he should pursue it without putting in too much time money or emotion. Because in the end I think it will be difficult for him to prove the damages. Still it is worth a shot, and writing the letters himself to see what they say is a good first start.

ILW

I really cannot see the issue. You agreed to sell your property to the developer for £140k and that is what they paid you.

badaz52

The issue is quite simply this, I agreed to px my house for a new one, I agreed for them to market the house with the same EA it was already on the market with but for a reduced price of £140k. It sold for £140k no loss.

However the EA did have a conflict of interest and up until exchange of contracts I still owned the house, my point is the person who bought it was already lined up while I still owned it and had previously viewed the property twice.

Because of the lack of communication with me over who was purchasing, the EA and developer were not honest and acted immorally preventing me from changing my mind and negotiating on anything therefore there is a potential loss as I was made to overpay as on the basis of a PX you have no room for negotiation.

Thing is no PX really took place as they had a buyer in place to move in the next day after I moved out....That is where my complaint lies.

As I still owned the house until completion and a buyer had already been found weeks in advance I should have been informed that it was one of the original suitors and asked how I would like to proceed.

I will be sending letters to the EA and developer and if nothing comes of it then at least I have tried.

If anything all I am potentially hoping for is that they may re-imburse me for some of the extras, solicitors fees or moving costs as these are usually standard things you can negotiate on. It would be difficult to demonstrate a loss on the sale price of our old house or the purchase price of the new one as who knows what values could have been worked on. The developer has merely capitalised on there already being firm interest in the property and offered it to one of the interested parties without my knowledge, granted they did not make any profits on it but its not the point they should have been honest about it and allowed me the option to stop PX proceedings.

Someone mentioned "That deal was with the developer and how they sold your previous house and to whom is really not your concern." surely while I still owned it and had not exchanged contracts yet it was my concern?

The one thing I can prove is that the new owner of our old property viewed the house twice so made appointments plus as she completed on the 31/08/2011 and we moved out on the 30/08/2011 she had agreed to purchase the house weeks or even months before we moved and nothing was discussed further with us.

ILW

badaz52 wrote: »

The issue is quite simply this, I agreed to px my house for a new one, I agreed for them to market the house with the same EA it was already on the market with but for a reduced price of £140k. It sold for £140k no loss.

However the EA did have a conflict of interest and up until exchange of contracts I still owned the house, my point is the person who bought it was already lined up while I still owned it and had previously viewed the property twice.

Because of the lack of communication with me over who was purchasing, the EA and developer were not honest and acted immorally preventing me from changing my mind and negotiating on anything therefore there is a potential loss as I was made to overpay as on the basis of a PX you have no room for negotiation.

Thing is no PX really took place as they had a buyer in place to move in the next day after I moved out....That is where my complaint lies.

As I still owned the house until completion and a buyer had already been found weeks in advance I should have been informed that it was one of the original suitors and asked how I would like to proceed.

I will be sending letters to the EA and developer and if nothing comes of it then at least I have tried.

If anything all I am potentially hoping for is that they may re-imburse me for some of the extras, solicitors fees or moving costs as these are usually standard things you can negotiate on. It would be difficult to demonstrate a loss on the sale price of our old house or the purchase price of the new one as who knows what values could have been worked on. The developer has merely capitalised on there already being firm interest in the property and offered it to one of the interested parties without my knowledge, granted they did not make any profits on it but its not the point they should have been honest about it and allowed me the option to stop PX proceedings.

Someone mentioned "That deal was with the developer and how they sold your previous house and to whom is really not your concern." surely while I still owned it and had not exchanged contracts yet it was my concern?

The one thing I can prove is that the new owner of our old property viewed the house twice so made appointments plus as she completed on the 31/08/2011 and we moved out on the 30/08/2011 she had agreed to purchase the house weeks or even months before we moved and nothing was discussed further with us.

At waht point did you sign a contract agreeing to the part exchange at the £140k figure?

badaz52

We signed the PX agreement on the 5th May but still owned the house till the 30/08/2011. We exchanged contracts on the 26/08/2011. From May until August we were under the impression that as we still owned the house "legally" we would be informed of ongoing developments including if there was a buyer. All the way along the line we thought we were selling the house to the developer and on this basis we were happy to A: receive a lower value and B: Not allowed to negotiate as the developer would have the hassle of selling it on after we had moved.

What took place IMO was not what we agreed to and I feel they were dishonest and acted immorally both of them.

All the developer did was be a middle man between us, EA and purchaser but that approach is a different scheme called "Easymover" and you get more incentives as its less hassle for the developer.

Surely as they had got a solid buyer in place weeks/months before they carried on with the deal under false pretenses and prevented us from negotiating. As far as I'm concerned up until exchange of contracts we thought they didn't have a buyer and the developer was buying it from us.

GDB2222

I don't see how the PX agreement can have been any more than an intention, subject to exchange of contracts. Otherwise, why have exchange of contracts? Nevertheless, the precise wording of the PX agreement is essential.

If I have this correct, for potentially well over 3 months the estate agent was not acting for you but for the developer. Do you know at what point the EA took instructions from the developer? If you exchanged on 26/8 and completed on 30/8, with the new buyers moving in on 31/8, it seems pretty clear that the onward sale was not arranged in that 4 day window after exchange. Consequently, it's pretty obvious you have the EAs by the short and curlies, because for sure they must have had an offer on your house that they failed to pass on. (Can't remember if that's a criminal offence, but it's certainly in breach of the EA Act.)

I would instruct solicitors rather than try to investigate this yourself. The other thing you can do is go and chat with the new buyers. Find out when they made their offer.

Calculating the loss is not easy, but that is a matter for expert evidence. I wouldn't worry about it at this stage.

GDB2222

badaz52 wrote: »

Surely as they had got a solid buyer in place weeks/months before they carried on with the deal under false pretenses and prevented us from negotiating. As far as I'm concerned up until exchange of contracts we thought they didn't have a buyer and the developer was buying it from us.

In fact, you would have been in a position to buy a secondhand house, rather than being forced into buying a new-build because of the PX opportunities. In that case, your loss might be a great deal more than just the discount you might have negotiated on the new-build.

badaz52

GDB2222 wrote: »

I don't see how the PX agreement can have been any more than an intention, subject to exchange of contracts. Otherwise, why have exchange of contracts? Nevertheless, the precise wording of the PX agreement is essential.

If I have this correct, for potentially well over 3 months the estate agent was not acting for you but for the developer. Do you know at what point the EA took instructions from the developer? If you exchanged on 26/8 and completed on 30/8, with the new buyers moving in on 31/8, it seems pretty clear that the onward sale was not arranged in that 4 day window after exchange. Consequently, it's pretty obvious you have the EAs by the short and curlies, because for sure they must have had an offer on your house that they failed to pass on. (Can't remember if that's a criminal offence, but it's certainly in breach of the EA Act.)

I would instruct solicitors rather than try to investigate this yourself. The other thing you can do is go and chat with the new buyers. Find out when they made their offer.

Calculating the loss is not easy, but that is a matter for expert evidence. I wouldn't worry about it at this stage.

I don't know the exact date that the EA took instructions from the developer but I do know that our PX agreement was dated 5th May 2011 which we had to sign and send back so it can't have been longer than 4 weeks after this date.

As soon as the developer started to instruct the EA, we had no further communications with the EA. From what I can find out an EA has to pass on any offers in writing unless the seller has told the estate agent not to e.g. if they are below a certain price.

The EA has stuck to this but not because of something we told them but because the developer told them they wanted £140k for it, when they got the offer they didn't bother to pass it on to us only to the developer but like you say at this stage it was not the developers to sell.

I totally agree about the PX agreement though it can't be any more than a provisional non-binding agreement because say our financial stability changed and we had to back out of everything, they couldn't force us without exchange of contracts to sell it to them.

I have typed up two letters of complaint, one to the EA and one to the developer.

Should I send these and see what response I get if any and then take it higher to a solicitor if I'm not satisfied? do you think there is any harm in me sending the letters?

lincroft1710

The builders will probably say either:

"We sold the house at the price we bought it from you as was agreed in the P/X contract. As we incurred EA fees and additional solicitor's fees, we have in fact made a net loss on this part of the transaction"

or:

"We do not discuss or comment on sales to parties other than the correspondent".

EA's reply likely to be :

"We were informed by the builders that they were buying the house from you, which was confirmed by the agreement signed by you on 5 May 2011. As they wished to dispose of the house asap, the builders asked us to continue marketing the house at the reduced asking price of £140K and they signed a contract to that effect, thus absolving you from any fees due to us. We consider we have behaved in a correct manner towards all parties concerned.

We regret we are unable to enter into any further correspondence".

I think your agreement to sell to the builders rendered your contract with the EA null and void.