Owed money by vendors - can I take them to small claims court?

LJ507

Hi all,

I was wondering at the possibility of taking the vendors who we bought our flat from to small claims court as they have not paid an amount we agreed in order to begin exchange of contracts.

It's a long story, but we found out in our pre-buying checks that the flat needing some work doing to the electrics to the amount of £1600. As a result, we tried negotiating the agreed price down, but due to time sensitivity (the whole process was very drawn out and painful) the vendors pushed back saying they didn't want to drop the asking price, but would transfer us half of that money - £800, on the agreement that we begin the exchange process.

We did this, in good faith, and 2 months later we have bought the flat and are happily moved in, but the vendors have still not paid the £800 agreed, despite multiple emails and chasing.

This was our first property purchase, and will freely admit we were rather naive about the whole thing. Rightly or wrongly, we did not have this payment agreed through the solicitors, only via email. But we do have a written agreement from them promising to pay us the £800 if we exchanged contracts.

So my question is - is this enough to take them to small claims court or should we let it go? We still have the vendors contact details and the new address. Would a formal letter threatening legal action be enough to frighten them into paying or should we go back to our solicitor to deal with this? All thoughts would be appreciated greatly!

theartfullodger

Yes:. LBA today then small claims. Good guidance in CaB website

Comms69

You can try, but I would argue that this was linked to the purchase and by not being included in the contract you may struggle to enforce.

01afraser4

It could be reasonably argued that the email from the vendor offering the £800 to proceed with the exchange process is a valid contract.

This may depend on whether you agreed to the offer and is on the assumption that they have not included a disclaimer in their email correspondence stating it does not constitute a contract.

My first instinct would be to contact your solicitor who may have experience of dealing with similar matters but I'd be confident you will receive the £800 if this has been offered in writing and accepted.

stator

Yes, seems like you have a good claim.
No need to get solicitors involved, just google the pre-court procedure for small claims court and make sure you follow it.

SmashedAvacado

think about it this way

1) you both had solicitors to document the deal
2) you didnt document a key part of the deal
3) does your contract (the one to buy / sell) have an entire agreement clause in it - ie say something like "this contract constitutes the entire agreement between the parties" - likely yes
4) did you speak to your solicitor about agreeing the side deal. If so, what did they suggest? If not, why not. If not why not?

I don't think you have a chance but good luck!

davidmcn

If the agreement was that they would "transfer us half of that money - £800, on the agreement that we begin the exchange process" and you not only began the exchange process, but actually exchanged - doesn't that suggest you had received the money? If you hadn't, why did you exchange?

As above, I expect there is at least an implication that the contract ought to contain all the relevant obligations, and may explicitly say that it does so and replaces any preliminary discussions.

But you can always have a go at scaring or guilt-tripping them into paying up.

parkrunner

Letter before action will cost you virtually nothing so try that first.