Breach of Contract

tattooosteve

Hi all,
First time posting and we're hoping that someone can help us with some information or advice.
We exchanged contracts last Tuesday and completion was due to be Friday. There was four people in the chain. Our buyer had nothing to sell, we were buying on, our seller was buying on and the top of the chain was going in to renting.
After , what seems to be usual, a lengthy process we were all ready to complete on Friday morning. Our lorry was loaded and ready to go, house empty when we got a call from our Estate Agent saying that our buyers solicitors had received an email from his building society saying not to release funds as a check was being carried out.
After an agonising three hour wait we were told the building society had asked for his funds back.
We were, are, devastated and the removal people unloaded our stuff back in to our house.
We are just stunned and as the weekend passed the reality has got worse.

Does anyone know where we stand ?
Do we get our expenses back?
What happens to our buyers deposit?
Will our building society charge us an erc as our funds will be returned to them?

Sorry for all the questions but our Estate Agent and conveyancer have never had this happen after exchange.

Kind regards
Steve

anselld

There is a process to follow which starts with your Solicitor serving "notice to complete", so you need to contact them straight away and let them deal with the situation.

Keep careful note of all your expenses as you will need to make a claim against the vendors whatever the final outcome.

moneyistooshorttomention

It's the buyer - not the vendor - that is the problem here.

I believe OP keeps the buyers deposit - so that's something.

OP - why has the buyer had this problem? Were they "over-optimistic" in what they thought they could borrow or is this withdrawal of loan down to their mortgage provider changing criteria or something part way through the process?

To me - the first thing I'm wondering is if your buyer can get their mortgage arranged with someone else instead of their original mortgage provider. Do you know if this might be a possibility?

tattooosteve

moneyistooshorttomention wrote: »

It's the buyer - not the vendor - that is the problem here.

I believe OP keeps the buyers deposit - so that's something.

OP - why has the buyer had this problem? Were they "over-optimistic" in what they thought they could borrow or is this withdrawal of loan down to their mortgage provider changing criteria or something part way through the process?

To me - the first thing I'm wondering is if your buyer can get their mortgage arranged with someone else instead of their original mortgage provider. Do you know if this might be a possibility?

Hi,
The buyer had his funds in place , mortgage was approved and guaranteed to be available for Friday. The funds were drawn down ok and were actually with his solicitor. According to buyer, via our estate agent, the building society concerned refused to disclose reason.

tattooosteve

anselld wrote: »

There is a process to follow which starts with your Solicitor serving "notice to complete", so you need to contact them straight away and let them deal with the situation.

Keep careful note of all your expenses as you will need to make a claim against the vendors whatever the final outcome.

Thank you. I spoke to my conveyancer many times Friday and she has served notice which I believe gives 10 working days.
Good advice on expenses I will keep an accurate list

scriv

Not asking you to name the building society as that may be against forum rules, but is it a standard well known experienced one?

moneyistooshorttomention

Sounds very odd for a "building society to refuse to disclose reason".

I would have thought they would have to tell the buyer why they are doing this - whether it's down to "Dear buyer - we've just found out you were trying to pull a fast one on us" on the one hand OR "Dear buyer - very sorry - but we've just changed our criteria and you've been caught by that part way through your purchase".

You are entitled to know whether it's the buyers fault or the building society's fault - to know what the chances are that the buyer will be able to get a mortgage with someone else instead.

Do you have any contact details for the buyer - so that you can ask them directly (rather than via the EA)? If nothing else - I guess they have a Facebook account?

GDB2222

tattooosteve wrote: »

Hi,
The buyer had his funds in place , mortgage was approved and guaranteed to be available for Friday. The funds were drawn down ok and were actually with his solicitor. According to buyer, via our estate agent, the building society concerned refused to disclose reason.

Just speculating, but your buyer may have been involved in fraud in some way, and the lenders found out at the last minute. Or it may be a glitch. Who knows?

If the chain really falls down, it's pretty bad financially for all concerned. You keep your buyer's deposit. However, that doesn't help you much because your vendors keep your deposit, which is presumably bigger. Plus there are all the costs involved.

In theory, you can sue your buyers, who probably don't have any money. Plus of course you need to sell the house again.

You may even be liable for estate agent fees on the failed purchase!

tattooosteve

As for the building society, I witheld the name for the same reason. It is well known, however I'm told doesn't have an excellent reputation.

Regarding buyer, I do have contact details and later this week may make contact. I'm sure you'll appreciate, with my wife in tears and our home in disarray I decided against seeing him this weekend. ��
He has said that he doesn't know why and will be going to find out this week so there is a glimmer of hope. I am hoping it's a banking / computer error of some sort. It seems awfully late in the day to be doing checks.

DaftyDuck

Two points. Firstly, it's really only worth chasing the buyer if he somehow has cash, so another mortgage to complete, or some ready cash for costs. If he is stone broke, you can waste ages chasing and stressing, but will gain nothing.

Secondly, it's not surprising the reason isn't forthcoming from the mortgage company. They will tell their client, the buyer, and they will inform his solicitor. Neither are likely, at this stage, to be open and honest with the op, his solicitor, or the agent.

Depending how much you want this particular deal to progress, it may be worth seeking out a nearby solicitor who HAS dealt with this before, rather than one who has not....

davidmcn

DaftyDuck wrote: »

it may be worth seeking out a nearby solicitor who HAS dealt with this before, rather than one who has not....

Irrespective of whether the OP's solicitor has dealt with this scenario before, they surely ought to be able to answer their basic questions about the process. Otherwise what's the point of engaging them to negotiate and advise on the contract?!