Not standard construction - claim against estate agent

ReadingTim

revinkevin wrote: »

Only 1 of 31 would lend but on silly terms.

So there was someone who would lend, but you chose not to borrow from them. How is that the EA's fault?

revinkevin wrote: »

Without going into too much detail, I was making a buy to let purchase and the lending criteria on BTL mortgages can be stricter than residential mortgages.

So you were purchasing the property for a purpose that had stricter lending criteria than a normal residential purchase - did you inform the EA of that? Did the EA know you'd still need a mortgage (many assume investors are cash purchases, and some even market at cash only investors because they know it's hard to get a mortgage on the property).

In short, I think you're on a hiding to nothing...

Conrad

I think the agents defense would be along the lines of mortgages have been granted on these properties in the past.

I would consider writing to the Chairman / owner stating you will take this to Trading Standards. Sometimes this alone is enough to elicit compensation but I wouldn't hold your breath.

The mortgage broker should also have known of this risk. I owned a brokers until recently and one of the first things we established was the construction and type of property as this forms part of our key factors assessment. They are heavily regulated and bound to treat the customer fairly. If anything that is an easier compo route.

Having said all this you are a big boy / girl and share responsibility, it is a bit of a stretch to imagine you were totally naive over this - why was it on the market so long for a start........, even the most dim witted would pause to consider this.

Don't throw much energy into this, get on with your next investment.

revinkevin

Tim, yes a lender would lend, but that would involve a 2nd survey for that lender, and a 2nd application fee from the broker. The sale may have concluded but I would still have lost the original fees. And as mentioned, the EA were aware this was a buy to let proposition.

Conrad: regrettably I was naive over this. I actually live around the corner from the house I was going to purchase (I am still quite new to the area) and my property is of standard construction. What makes things slightly more difficult is just before I moved to the area the council added external insulation/rendering to hundreds of houses and the privately owned properties were able to have the work done quite cheaply as part of the deal. This makes it hard for the layman to see what the property is built from - all brick work or similar is now hidden from view.

Interesting thoughts on the broker route - I shall check the information that I supplied to them on their "fact find" document.

Ultimately though I think you are correct. Lesson learned and time to move on. Thank you for all your comments - they are appreciated.

ed110220

In my experience estate agents often know very little about housing construction, so to rely on one for this could be naive. They'll wave their hands about talking about the spaces etc but ask how it's built and they'll be stuck! Even surveyors quite often get this sort of thing wrong it seems. Certainly when we bought our house (BISF) it was the internet and other BISF owners I had to rely on, not the estate agent or other "professionals". Most of whom wouldn't have known steel from precast reinforced concrete if they were being beaten about the head with it

Also as in general mortgages aren't hard to get from major lenders (if not all of them, and less so the smaller ones) for non-standard construction that is not classed as defective under the housing acts (which no-fines isn't), that would probably count against any claim.

Ed

MrsElliot

I followed this thread with interest as recently we feel foul to making an offer on a non-standard construction house. As FTB we were pretty naive and it was actually the mortgage broker that told us it was probably a concrete house AFTER WE MADE THE OFFER AND IT WAS ACCEPTED due to the area that the house was in - the EA and vendor did not disclose this information and we ended up relying on other sources!

The house was ex-council which we didn't mind as the rooms were quite large compared to newer houses however after doing some research on concrete houses we found that a number of lenders will not lend on them without higher deposits/interest rates and we may find it hard to sell in future. We decided to proceed cautiously (we should have pulled out then but felt we already had our offer accepted and felt we had to go through with it as we didn't want to be timewasters as we were told a previous buyer had pulled out of a purchase of the house a few months beforehand) and so got a full structural survey to give us peace of mind.

The survey came back, the concrete itself apart from a few cracks wasn't in bad condition being one of the non-defective types however the vendor had disclosed that the house had had cavity wall insulation put in. The surveyor warned that this type of construction is not suitable for cavity wall insulation and mentioned the presence of insulation can cause possible future wall tie failure and damp and recommended taking out the insulation and either insulating internally or externally at a cost of £1000s. There was also an issue that the cavity wall insulation work was not registered with the local authority and we didn't know what material the cavities were insulated with!! This along with a few other defects which would also cost £1000s to rectify and the fact the vendor omitted some fairly important info on the Property info form made us pull out of the sale (it was a horrible experience and the EA did make me feel awful and made me feel like we were pulling out of the sale over nothing!) However this whole situation probably would have been avoided had we been told in the very beginning that the house was concrete (non-standard construction) we would have done our research earlier and would not have put an offer on it.

I agree with the OP EAs should tell buyers what method of construction was used to build the property they are intending to buy from the outset as it does affect the properties value/ability to get a mortgage and affects any subsequent work e.g. maintenance/ insulating to be done on the property and would save both sellers and buyers the financial and emotional heartache of a sale that falls through. For pulling out we lost just over £900 in survey and fees

Davesnave

MrsElliot wrote: »

For pulling out we lost just over £900 in survey and fees

That's one way to view what happened.

The other way is to be glad that you saved thousands, by having a proper survey, which identified potential future problems the owners were almost certainly not aware of.

lincroft1710

MrsElliot wrote: »

We decided to proceed cautiously (we should have pulled out then but felt we already had our offer accepted and felt we had to go through with it as we didn't want to be timewasters as we were told a previous buyer had pulled out of a purchase of the house a few months beforehand)

The sooner a potential purchaser pulls out, the less of a timewaster they are


This along with a few other defects which would also cost £1000s to rectify and the fact the vendor omitted some fairly important info on the Property info form made us pull out of the sale (it was a horrible experience and the EA did make me feel awful and made me feel like we were pulling out of the sale over nothing!)

You should have turned this back on the EA and blamed them for wasting your time by not accurately describing the property

For pulling out we lost just over £900 in survey and fees

3 points.

1. Never feel guilty about pulling out of a property purchase if it is not right for you. It'syourmoney being invested.

2. A relatively small loss up front is much better than a larger loss later on

3. Don't rely on EA property particulars to highlight any possible problems or defects.

ScorpiondeRooftrouser

Bear in mind that there's absolutely no benefit to the estate agent in wasting people's time and money. If they had known you wouldn't get a mortgage, they would have told you.

As you'd only have any sort of a case against them if they were deliberately misleading you (as I understand they don't owe you any duty of care whatsoever; they have no contract with you) then incompetence would be a perfectly valid defence even if they should have known - which in itself would be almost impossible to prove.

I may be wrong but I can't see any advantage in pursuing this.