New build purchase - in an unfortunate situation / homeless

london1990

Hello,

Please see other threads for more detailed background but the short story is that I reserved a plot back in October with an estimated completion of May 2017. Exchange was forced upon me in April 2017 due to the aggressive developers. I have received notification of delays in four letters since February. First it was going to be June, then it slipped to July, then to August and the most recent correspondence I had stated mid to end of September. We are now at the end of August and I have had no further updates from the developer although I am expecting one today.

The serious issue is that I have to move out of my current rented accommodation two weeks on Saturday. I had hoped throughout this process that we would have completed early in the summer, in fact I had even been prepared to have lost some money in wasted rent from having to move out early.

I luckily have a friend that owns a house and runs an Air B n B on the side. I am moving there for a few weeks and they have kindly and generously indicated that I can stay there longer if it slips again. However, this is less than ideal and not really fair on them as it effectively prevents them from taking future bookings while I am there, not knowing when completion will take place. I am having to put most of my things into storage while we wait for completion.

I'm not sure what a better solution would be here? They don't seem to be able to provide any accurate indication as to when completion will take place, although an earlier phase of the development is now occupied. Should I find a short term rental? Would it be reasonable to ask for compensation for storage costs and rent payments due to these delays (I appreciate the attitude of a London developer will not be receptive to that request and that I could be laughed out the door).

I'm basically in a bit of a mess and having a panic. I can't believe I have ended up in this situation being in a temporary Air B n B. In particular are there any consequences from being in a temporary arrangement (I won't be paying council tax nor any bills, no permanent address for correspondence from bank etc). I'm also trying to hold down a very stressful job so the whole thing has taken its toll on me and is making me feel quite ill and I'm doing this all alone as a solo buyer.

The upside is that I understand most other purchasers at the development are being patient because they are well aware that this is in a good location in London and that the value of the as yet incomplete asset has possibly risen already since reservation of the plot. So there is no real loyalty, but buyers are aware that this is a good deal.

Any advice on this unpleasant situation would be much appreciated.

Pixie5740

london1990 wrote: »

Hello,

Please see other threads for more detailed background but the short story is that I reserved a plot back in October with an estimated completion of May 2017. Exchange was forced upon me in April 2017 due to the aggressive developers. I have received notification of delays in four letters since February. First it was going to be June, then it slipped to July, then to August and the most recent correspondence I had stated mid to end of September. We are now at the end of August and I have had no further updates from the developer although I am expecting one today.

The serious issue is that I have to move out of my current rented accommodation two weeks on Saturday. I had hoped throughout this process that we would have completed early in the summer, in fact I had even been prepared to have lost some money in wasted rent from having to move out early.

I luckily have a friend that owns a house and runs an Air B n B on the side. I am moving there for a few weeks and they have kindly and generously indicated that I can stay there longer if it slips again. However, this is less than ideal and not really fair on them as it effectively prevents them from taking future bookings while I am there, not knowing when completion will take place. I am having to put most of my things into storage while we wait for completion.

I'm not sure what a better solution would be here? They don't seem to be able to provide any accurate indication as to when completion will take place, although an earlier phase of the development is now occupied. Should I find a short term rental? Would it be reasonable to ask for compensation for storage costs and rent payments due to these delays (I appreciate the attitude of a London developer will not be receptive to that request and that I could be laughed out the door).

I'm basically in a bit of a mess and having a panic. I can't believe I have ended up in this situation being in a temporary Air B n B. In particular are there any consequences from being in a temporary arrangement (I won't be paying council tax nor any bills, no permanent address for correspondence from bank etc). I'm also trying to hold down a very stressful job so the whole thing has taken its toll on me and is making me feel quite ill and I'm doing this all alone as a solo buyer.

The upside is that I understand most other purchasers at the development are being patient because they are well aware that this is in a good location in London and that the value of the as yet incomplete asset has possibly risen already since reservation of the plot. So there is no real loyalty, but buyers are aware that this is a good deal.

Any advice on this unpleasant situation would be much appreciated.

Why did you have to move out your current home 2 weeks on Saturday? You didn't serve notice to end your tenancy before agreeing the completion date did you?

CM66

Was a completion date agreed when you exchanged contracts? if so then i believe the developers are liable to cover your costs relating to any delays...

pinkshoes

As above, why are you having to move out?

What does your contract say about delayed completion?

ACG

I can only think of once where this happened and the solicitor I used insisted on a date being put in to the exchange to basically say completion must take place by a certain date (I think it was basically a week before the Mortgage offer expired).

I am assuming there was no such date entered for you?
I do not really do new builds as it is not uncommon for their to be delays. I would speak to your solicitor (fingers crossed you chose your own solicitors and did not go with the developers firm).

davidmcn

CM66 wrote: »

Was a completion date agreed when you exchanged contracts? if so then i believe the developers are liable to cover your costs relating to any delays...

You don't get fixed completion dates in the contract where the property hasn't been built yet. The developer tells you the completion date once they've completed construction.

The question is whether there is any longstop date in the contract which would enable the OP to walk away (if that's what they want to do). But I very much doubt they'll be entitled to any sort of compensation - they should really have thought about these risks (and been advised about them) at the time they entered into the contract.

london1990

ACG wrote: »

I can only think of once where this happened and the solicitor I used insisted on a date being put in to the exchange to basically say completion must take place by a certain date (I think it was basically a week before the Mortgage offer expired).

I am assuming there was no such date entered for you?
I do not really do new builds as it is not uncommon for their to be delays. I would speak to your solicitor (fingers crossed you chose your own solicitors and did not go with the developers firm).

Hello! Thanks for the reply. I didn't choose the developers' solicitors, I'm using an absolute fantastic conveyancer on the recommendation of a friend. We had a long stop date agreed in the contract which was 31 August which will clearly not be met. If the long stop date isn't met, I have the ability to walk away with the deposit and reservation fee. Practically speaking, I don't want to invoke this as I do want to complete.

Others have asked why I am having to move out of my rental - my housemates were moving anyway and I honestly believed that completion would take place well before the end of the tenancy. I had to confirm with them back in June whether I would be staying and back then it seemed likely. I didn't want to commit to an extension of the current tenancy. I know it might seem like a stupid move to some people on here, but it didn't make sense to extend as at the time I was getting assurances from the developer that completion would be in July/August.

I have been sent photos of the plot by the developer and the progress looks good but it is just adding to the stress that there is no clear idea as to when this is going to be finished.

davidmcn

london1990 wrote: »

We had a long stop date agreed in the contract which was 31 August which will clearly not be met. If the long stop date isn't met, I have the ability to walk away with the deposit and reservation fee. Practically speaking, I don't want to invoke this as I do want to complete.

Well, those are your options. Hang on until it's built, or walk away. There's no harm in asking the developer for some sort of incentive to deter you from walking away, but if as you say prices have gone up and they could sell to someone else at a profit, they'd probably be delighted if you did pull out! On the other hand, they might prefer the cashflow from a quick completion.

london1990

davidmcn wrote: »

Well, those are your options. Hang on until it's built, or walk away. There's no harm in asking the developer for some sort of incentive to deter you from walking away, but if as you say prices have gone up and they could sell to someone else at a profit, they'd probably be delighted if you did pull out! On the other hand, they might prefer the cashflow from a quick completion.

But isn't it rather unusual for there to be such a long delay? It was supposed to be a May completion and it is now August. In fact, my conveyancer is having to seek an extension from the HTB agency as over six months will have elapsed since exchange and it is a condition of the HTB mortgage that completion takes place within six months of exchange.

I guess I am just wondering, in practice, how much longer could I be waiting around. I am being hounded by a furniture store too that has had a sofa and bed in storage since June and they are now saying if I don't complete by October then they can't deliver it until the new year due to Christmas deliveries. Not sure if that is just bull to put pressure on me as they obviously have targets as to how quickly they can get deliveries out, but it just adds to the stress.

Doozergirl

You need to speak to your solicitor. The developer will be in breach beyond the longstop.

Even if you don't want to pull out at this point, that longstop date is the point at which they breach contract and you can claim compensation in the form of interest on the property value and your costs incurred in not having a permanent home to live in.

In all fairness to you, you effectively did have a completion date and didn't give up your tenancy simply because you wanted to move, which is what a lot do.

davidmcn

Doozergirl wrote: »

The developer will be in breach beyond the longstop.

Even if you don't want to pull out at this point, that longstop date is the point at which they breach contract and you can claim compensation in the form of interest on the property value and your costs incurred in not having a permanent home to live in.

It wouldn't be normal for the contract to state that the developer is in breach or liable to compensate merely because they've gone past the longstop date - the buyer's remedy if they don't like the delay is simply to walk away and take their deposit with them.