Getting a full reservation fee refund if we haven't signed a reservation form

eddddy

Kell4life wrote: »

Persimmon are agreeing to refund us £250 not the £500. I didn't think they could do this if we haven't signed any reservation form to say we will be purchasing the house, or signed an agreement about a £250 cancellation clause?

So in legal terms, you made a verbal contract over the phone. You now want to breach that contract.

You could argue that you are only responsible for the losses they suffer as a result of your breach. (e.g. the admin costs of filling in forms etc)

£250 does sound a bit steep for this. You could suggest that £50 to £100 is more appropriate.

t0rt0ise

There was a verbal contract which is good enough. To get half your money back is generous. They didn't even need to do that.

Kell4life

I really appreciate everyone's comments.

I'm aware that is us who has changed our minds but as we only spoke to Persimmon on the telephone I wasn't aware that we had entered into a contract, other than take our credit card details nothing was explained such as entering into a legally binding contract, they didn't read us any terms and conditions and there was no mention of a cancellation charge. Due to it being so close to Christmas and the distance they were happy for to to complete the necessary reservation form in person at the start of the New Year.

With regards to changing your mind with Persimmon as standard once you have signed the reservation form you have approximately 28 days to exchange contracts, a buyer can pull out at any time before that and will only incur a fee of £250 and you will get your other £250 refunded. By that point you would of got a lot further down the process in terms of paperwork and getting solicitors involved on both sides.
We haven't signed a reservation form so I wasn't aware until the point we'd signed a reservation form that we'd be entering into an agreement. Had it not been Christmas and New Year then we'd obviously of spoken to the sales office sooner to say we'd changed our mind, but they have only fully opened today, the site has been shut, no work would of been done on this property and the admin would of been minimal as they've been shut.

The credit card point is good, we'd have nothing to lose by pursuing that avenue, I'd be happy to fill in some paperwork even if it didn't get us anywhere, at least I'd know I've tried.

Nobbie1967

Did Persimmon send you a copy of the T&Cs after you reserved over the phone? If not, then did they make clear that the £500 was not refundable in it's entirety? If not, then it's not clear that you have agreed to this detail of the contract.

Maybe agree to a compromise as suggested above of £50 admin fee with the alternative of a section 75 claim on the grounds of misrepresentation that you weren't told about the the fee not being fully refundable (if true)

Kell4life

I've just spent a bit of time looking online about verbal agreements being binding, in most cases this does stand, but with the exception of a few things including purchasing property.

An extract I found:

There are certain contracts and agreements that must be made in writing and these will include the sale of property, tenancy agreements, copyright transfer, and contracts for consumer credit. In some cases, verbal agreements will not be upheld in court, not because of the lack of a written agreement but because the terms of the verbal agreement were not clarified.

Kell4life

In between Christmas and New Year we did receive a standard letter from Persimmon thanking us for reserving the property and telling us the next steps. In that letter it did mention about the £250 cancellation charge.

The letter was incorrect, it was a bog standard letter saying that we'd reserved a plot in their sales office onsite, signed a reservation form and that the sales executive had gone through the full detailed site plans and checklist and that we were happy with everything.

As far as I'm aware, legally to sell a new build property these days the sales executive has to fully go through the site plan, pointing out any social housing, any service charges, maintenance fees etc.
I'm sure on 99% of cases the majority of people do go through the normal reservation process in person, so there would be no argument about the £250 cancellation fee, but as we haven't gone through this process, I can't see how the £250 charge can be legally binding.

Will await Persimmon's response.

Thank you for all your comments.

dgtazzman

I used to spend a lot of time talking to the sales rep at the development where I used to live in Northampton, might even go so far as to call it somewhat of a friendship.

He told me they changed their policy on refunding reservations about a year ago. They also used to keep half if somebody cancelled, but changed this to refund in full as there was some legal precedence for this (don't ask me for the case) and based on advice from their legal department, they changed the policy to prevent future problems. I think the judgement was that as a developer doesn't suffer any loss if a reservation is cancelled, fees should be returned in full (minus a small admin change possibly for the sales rep's time and a few letters sent, I'd say something in the region of GBP 50 sounds fair for this).

I had the same issue with Persimmon last year when reserving a plot in Wales, also getting GBP 250 back. I was going to chase it up and try to get the full amount back as I had been misled by the sales rep while placing the reservation, but other things got in the way and I never got round to it...

AdrianC

You paid an amount to establish good faith and commitment to the reservation of the plot.
You then... changed your mind. Nothing else. No misinformation discovered, nothing on their side.
You just... changed your mind.

Umm, what else is that payment there for, but to provide a disincentive to do that?

You'd be spitting feathers if the developer had done the reverse to you, wouldn't you?

Kell4life

Thanks for all your comments.
Update, Persimmon are refunding us the full £500 and have apologised for the mix up. It was as I'd thought; we hadnt signed any reservation forms or any other paperwork nor were given any of their terms and conditions about cancellation fees. Had we not questioned the other £250 with them they would of likely kept it, so a good result.

Persimmon will have no problem selling the plot to somebody else, and to be fair no work had been done by any members of staff as the offices had been shut for Christmas & New Year.

Lesson learnt from our end though.

Guest101

To be fair, Persimmon probably don't know it's binding either. But certainly the bit you quoted:


There are certain contracts and agreements that must be made in writing and these will include the sale of property, tenancy agreements, copyright transfer, and contracts for consumer credit. In some cases, verbal agreements will not be upheld in court, not because of the lack of a written agreement but because the terms of the verbal agreement were not clarified.


Is incorrect as tenancy agreements certainly can be verbal. (im not commenting on copyright or consumer credit, as neither are my area of knowledge) and the sale of property is misleading. The sale of land my ofcourse be somewhat in writing as it must be registered with land registry. But the extract suggest that all property sales (as in even if I sold a paperclip, which is my property) must be in writing, which is ofcourse incorrect.