Pulled out before exchange - invoiced for costs!!

jtm8866

I reserved a new build property with £500 reservation fee and then applied for the mortgage and help to buy application. After few weeks, our mortgage and HTB application got approved. Meanwhile, we were going through some optional free and paid extras (such as flooring, tiling etc) for the house with sales agent. I was notified that I will have to pay additional for these extras but not need to pay until the contract exchange date or after this day. However, no agreement was made about what would happen if we pull out of the purchase before the contract exchange.

We have only signed the reservation form and extras form but nothing had it in written regarding to the payment of extras nor verbally agreed on what would happen in the event of nor going ahead with the sale.

Few days after we received Authority to exchange from htb, we found out that the developers have changed the location of the car park driveway. So we decided to pull out of purchase before the contract exchange date. So nothing was signed.

Now the developers have sent me an invoice asking to pay £4000 for all the extras that have been installed which incurs costs on them due to me pulling out of the purchase.

Can somebody please advice whether I legally owe them anything?

I feel like I'm being bullied in to this by the developer since the estate agent and the developer has been harassing me regarding costs from the moment i pulled out of the purchase.

Mutton_Geoff

What does your solicitor advise?

ACG

Mutton_Geoff wrote: »

What does your solicitor advise?

If they used the developers solicitor then that should probably be phrased as "what does the developers solicitor advise".

Have a read through everything you have signed.

jtm8866

Although i was being harassed on costs for a while, I only received invoice on Friday. The solicitor have forwarded it to the litigator saying this is a litigious issue now.

Reading through my T&C with solicitor, it says that if any litigation costs then I'm entirely responsible to cover it whether the case is successful or not.

I'm yet to talk to the litigator on Monday. Now that we have moved on to purchase another new house, all our savings and investment are being spent towards it. So we can't afford any additional legal expense at this stage.

I know that we may legally not owe them anything but if they drag is to court, We dont have financial means to defend ourselves.

jtm8866

No we didn't use developer solicitor, although the estate agent tried to sign us with them initially. We got suspicious and arranged a different solicitor.

We signed only 2 documents with the estate agent regarding this property.

1) Reservation form - no written information regarding to payment of extras

2) Extras form - listing only the extras that we are choosing and how much each extra is; but nothing written regarding to the payment of the extras itself. We did sign this form acknowledging our list of extras choice.



The only email and verbal agreement was to pay the extras during contract exchange or thereafter but not before. We have email exchanges justifying this.



I have already approached the estate agent requesting to provide legal basis and all I got from them is lengthy email saying that "I waited until last minute before contract exchange to pull out and hence this isn't fair on the developer and so I will have to take all responsibility for the costs incurred to the developer".



The next thing I know, I was sent multiple email notifications by the estate agent regarding request for reimbursement via the developer's solicitor and today I received the invoice from the developer asking to pay £4000.



I feel angry and confused. I don't understand on what basis they are pressing this ahead. I am wondering whether getting a legal support is necessary which will be additional expense that I can't afford now. Not sure whether my conveyance solicitor will be able to help.

ileven1225

If I were you i will ask my conveyance solicitor firstly to seek legal support.

jtm8866

My conveyance solicitor have forwarded it to the lotogator within their firm. But there are lotigation costs if they provide any support with this, I guess.

steampowered

I would simply reply to the estate agent saying that you deny liability for these costs, and leave it at that.

If they want to claim these costs, they need to write a formal 'letter before action' explaining the legal basis for their claim. There is not much that can be done until that happens.

Slithery

If the property is indeed finished and all of your requested extras have been fitted who do you expect to pay for them? The developer can't just 'unfit' them and get all of their money back.

jtm8866

@slithery

I understand that developer incurs costs for all the extras. But it wasn't made clear to me beforehand o what would happen in the event of no sale. I was also not aware that the developer would just install extras before contract exchange or before I pay for the extras.

There never was any written notification or agreement on the extras costs in the event of us pulling out before exchange.

Moreover, I'd wanna know from legal standpoint, do I owe the developer anything?

jtm8866

@steampowered

I have already replied to the estate agent denying any liability but now received invoice from developer and the estate agent threatening me that they'll work with the developer's solocitor to get this cost reimbursed from me.

Regarding the 'letter before action', since I understand that they don't have any legal basis here, Can they still issue me such letter or take me to court?

I'm more worried about additional legal costs to defend myself.