Pulled out before exchange - invoiced for costs!!

jtm8866

@Duckdodgers

I've no idea legally but if I ordered a load of fixtures and fittings to be added to a house and agreed a price I would expect to have to pay for them.

I agree, IF it was my house.
But I don't even own the house yet and had no idea that all the extras are being done at their cost before the contract exchange.

Wassa123

I thought if they changed the plan and the design then you could get your reservation fee back.

The small claims fees are relatively small if you do lose, few hundred maybe.

konark

To claim £4,000 the builder must prove they have suffered a financial loss.

I don't know exactly what you've ordered but flooring and tiling is something that will need doing anyway, and as long as you've not chosen anything too garish will add value to the builder's house, so you could argue that whatever you chose is still in the house adding to its value, whether it will add £4,000 value is debatable.

I don't see how they can bill you for materials you don't own, and if you pay the 4 grand or lose the court case will you be able to go to the house and rip them out and take them away?
I'd probably have a haggle with the builder about a figure somewhere in the middle. You may have ordered this work but the court will also take into account the 'betterment, of the plaintiff's asset'. It will be interesting to see what price the house sells for with your flooring etc aginst base price..

anselld

joseph.tpja wrote: »

@edddy


Thanks edddy for your advice.

It sounds fair to me.

I will let the court decide whether I owe the developer £4k or not. At least this way, I avoid my legal representation expense.

Although, if I lose the case, will I have to pay more than £4k to cover the opponents legal expenses too?

AFAIK they cannot claim legal costs other than Court fees etc.
You should counter claim for return of your £500 reservation fee due to the Developer making a material change to the property prior to exchange.

MobileSaver

joseph.tpja wrote: »

we found out that the developers have changed the location of the car park driveway.

Thrugelmir wrote: »

Perhaps you should have asked before commiting the developer to the expenditure. Who do you think should pay for the bespoke extras you ordered.

Perhaps the developer should have asked the OP before changing the location of the car park driveway?

The OP showed an interest in buying a particular property with a particular car park driveway and ordered extras for that property. The developer went ahead and incurred costs before the OP had legally committed to the purchase in the time immemorial way (i.e. by exchanging.) The developer decided to make further changes without consulting the OP beforehand which led to the OP pulling out.

Unless the paperwork the OP signed categorically stated they would be liable for the "extras" costs even if they didn't buy the property I don't believe there is a court in the land that would find in the developer's favour. There is a general legal principle that if any clause in a contract is ambiguous then the most favourable meaning will always go against the person who drafted the contract (i.e. against the developer.)

As others have said, you need to immediately advise the litigation department that you will not be using their services at this point. I would ask the developer for evidence that you specifically agreed to pay for the extras regardless of whether you bought the property or not; to any reasonable person you would only pay for extras when and if you bought the property. If the developer produces further evidence (e.g. another piece of paper you forgot you had signed) then you can consider your options.

HampshireH

Have you seen this completed work & do the costs add up to what you agreed had you bought it?

I would go round 1st thing monday and ask to see the completed works and take photos.

Asap. At the moment all you have is say so that this has been done. If you could also clarify.

*date of signing extras agreement
*date of carpark changes proposed
*date of withdrawing before exchange

Gives a better idea of how long you could have reasonably been expected to know/ask.

MobileSaver

Duckdodgers wrote: »

if I ordered a load of fixtures and fittings to be added to a house and agreed a price I would expect to have to pay for them.

Even if the developer made changes so it was no longer the same house/driveway that you agreed to buy?!?!

jtm8866

HampshireH wrote: »

Have you seen this completed work & do the costs add up to what you agreed had you bought it?

I would go round 1st thing monday and ask to see the completed works and take photos.

Asap. At the moment all you have is say so that this has been done. If you could also clarify.

*date of signing extras agreement
*date of carpark changes proposed
*date of withdrawing before exchange

Gives a better idea of how long you could have reasonably been expected to know/ask.

Here is what happened:

22Nov17: Signed reservation form and paid £500 fee refundable since I am HTB applicant.
24Nov27: I was told that I need to choose the standard/upgraded extras soon so that they can be installed in time.
27Nov17: They sent me Extras form to be selected with our choices from a list of standard and upgrade options.
28Nov17: We filled the extras form with our choices, signed this form and sent over to estate agent.

The standard/free choices I selected were,
- colour of kitchen countertop
- colour of kitchen splashback
- colour of kitchen top cabinets
- Top floor carpet colour

The upgraded/extra cost items selected were,
- Upgraded Tiles for ground floor Hallway/Living room for which I was communicated via email and phone that will cost additional £985 only.

I sent them multiple emails on 27Nov and 28Nov to clarify the terms of payment regarding the additional £985 for tiling. I received a delayed response from estate agent that this can be added to the house price or paid during exchange/completion. I told them that we choose to pay this on the day of contract exchange since the mortgage application process already kick started with original house price and couldn't change this.

Note: The extras form didn't have anything written on it that explained the terms/contract of payment for upgrade options. I specifically wrote next to my tiling option in the form that, "Any additional payment for extras to be paid separately during exchange/completion" as originally agreed upon.

28Nov17: Applied for Mortgage and HTB loans
10Dec17: Received Mortgage offer
20Dec17: Received ATP for HTB
21Dec17-3Jan18: I was out of country on vacation.
6Jan18: Upon return from vacation, I visited the building site and noticed that the driveway was built on the side of the house instead in the front as was originally advertised and shown to us.

When I asked one of the construction guys, he told me that this was always the plan and he had no idea why it was advertised differently. I wasn't too happy about this since it reduced the size of the side and rear garden which both I and my Mrs loved about the house and one of the important reasons to buy this corner plot. But I wanted to show this to my wife before making a decision and I couldn't do this then since she was still out of country on vacation.

13Jan18: My wife returned to home after which we spoke about this but waited till we visit the site again.
15Jan18: I received a voicemail from estate agents asking me to send the extras form again which I resent it. Since we didn't make our decision at this point, we were still committed to buying this property.

17Jan18: We both visited the site and my wife was extremely disappointed on how much the driveway positioning has shrunk the size of the garden. FYI, we both are the joint applicants of the mortgage.

We were panicking at this stage not knowing what to do since we have already spent £1000 on legal costs and £500 reservation fee (fate unknown).

19Jan18: We decided not to go ahead with the purchase, also considering that there was another new development property nearby which had a similar size property available.

21Jan18: After confirming with the mortgage advisor that we can still pull out of this purchase since nothing has been signed yet and amend the mortgage application with the other new property info (no need to re-apply); We reserved the other new property on this Sunday.

22Jan18: On Monday, my mortgage advisor advised HTB that we are pulling out and this was in turn communicated with estate agent.

23Jan18: We received Authority to Exchange but at this point the decision was made to pull out.

24Jan18: I officially notified the sales agent that we are pulling out via phone call. This is when all hell broke lose. I started receiving multiple phone calls and emails threatening that I will have to pay for developer's costs incurred and this will be more than £4000.

At this point I received feedback from both estate agent and the developer that they both were surprised about the driveway positioning. They were not aware of this change as well.

So effectively I, my wife, the estate agent and the developer were all under the impression that the driveway is being built in the front of the house as originally planned. As I heard from the estate agent, the architect choose to change this plan without advising anybody. This is the email extract from the estate agent: "Evidently the architect changed the plan slightly recently and nobody was informed."

29Jan18: Since the estate agent said I need to follow up with developer for reservation fee refund, I sent an email to developer requesting the same.

2Feb18: I received the invoice from developer with the following message:
"Further to your email below; please find attached your invoice in relation to our costs pursuant to your withdrawal from the purchase of Plot xxxx.

We are holding £500 on deposit. Please arrange for payment of the outstanding sum of to be paid to our account by return. Account details are included on the invoice."

The invoice attached has cost breakdown as:
Tiles £ 1,164.91
Tile fitting cost £ 1,077.12
Worktop cost £ 417
Worktop fitting cost £ 275
Removal cost £ 586.81
Sub-Total £ 3,520.84
VAT £ 704.17

Total Amount Outstanding £ 4,225.01

Although upgraded tiles for £985 was unofficially quoted to me in the past, they have now invoiced me for worktop which is standard/free item and its removal in addition to the upgraded tiles cost which doesn't match £985.However, I guess the quote of £985 was the replacement cost between standard tile and upgraded tile.

Regardless, I do not agree with this at all since I did not sign any contract whatsoever. No contract for the house purchase and certainly none for the extras. Even verbal or email agreement wasn't achieved regarding the extras payment in the event of no sale. I do not owe them a penny let alone over £4k while my unofficial quote for extras was £985.

jtm8866

MobileSaver wrote: »

Perhaps the developer should have asked the OP before changing the location of the car park driveway?

The OP showed an interest in buying a particular property with a particular car park driveway and ordered extras for that property. The developer went ahead and incurred costs before the OP had legally committed to the purchase in the time immemorial way (i.e. by exchanging.) The developer decided to make further changes without consulting the OP beforehand which led to the OP pulling out.

Unless the paperwork the OP signed categorically stated they would be liable for the "extras" costs even if they didn't buy the property I don't believe there is a court in the land that would find in the developer's favour. There is a general legal principle that if any clause in a contract is ambiguous then the most favourable meaning will always go against the person who drafted the contract (i.e. against the developer.)

As others have said, you need to immediately advise the litigation department that you will not be using their services at this point. I would ask the developer for evidence that you specifically agreed to pay for the extras regardless of whether you bought the property or not; to any reasonable person you would only pay for extras when and if you bought the property. If the developer produces further evidence (e.g. another piece of paper you forgot you had signed) then you can consider your options.

I completely agree with you. Thank you very much for your comment and advice.
I intend to do the same.
I have provided detailed story of what happened above with dates, please let me know what you think.

jtm8866

konark wrote: »

It will be interesting to see what price the house sells for with your flooring etc aginst base price..

Apparently, the developer is removing all the standard/upgraded extras that's been fitted. They are charging me removing costs too.

I have explained this above in this post:

2Feb18: I received the invoice from developer with the following message:
"Further to your email below; please find attached your invoice in relation to our costs pursuant to your withdrawal from the purchase of Plot xxxx.

We are holding £500 on deposit. Please arrange for payment of the outstanding sum of to be paid to our account by return. Account details are included on the invoice."

The invoice attached has cost breakdown as:
Tiles £ 1,164.91
Tile fitting cost £ 1,077.12
Worktop cost £ 417
Worktop fitting cost £ 275
Removal cost £ 586.81
Sub-Total £ 3,520.84
VAT £ 704.17

Total Amount Outstanding £ 4,225.01

Although upgraded tiles for £985 was unofficially quoted to me in the past, they have now invoiced me for worktop which is standard/free item and its removal in addition to the upgraded tiles cost which doesn't match £985.However, I guess the quote of £985 was the replacement cost between standard tile and upgraded tile.