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New build reservation issues

Parkel
Posts: 4 Newbie
Hope someone can advise I’m at my wits end!
After getting dip with Nationwide we reserved our home on 2nd Feb.
The mortgage was declined yesterday, our advisor (recommended by builder took a week to submit application) I’ve today found another lender and awaiting decision.
My problem is with the builder - on our reservation form the deadline for exchange is 18th March, yet due to our broker (not anymore) telling them our mortgage was declined, not only has he readvertised the house at a higher price, he’s also instructed his solicitor that the sale will not proceed!
Thought about throwing in the towel but surely he isn’t allowed to do this!
After getting dip with Nationwide we reserved our home on 2nd Feb.
The mortgage was declined yesterday, our advisor (recommended by builder took a week to submit application) I’ve today found another lender and awaiting decision.
My problem is with the builder - on our reservation form the deadline for exchange is 18th March, yet due to our broker (not anymore) telling them our mortgage was declined, not only has he readvertised the house at a higher price, he’s also instructed his solicitor that the sale will not proceed!
Thought about throwing in the towel but surely he isn’t allowed to do this!
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Comments
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I wouldn't have thought so (but I'm not an expert) - I assume you have consulted your solicitor on this? You have reserved under the agreement that completion will be 18th March. You can still achieve this with another lender.
Did the advisor have your permission to pass on your personal information regarding the mortgage application to the builder? If not, I'd be taking that up with your solicitor also, as well as the FCA (or whatever professional body they are meant to be a part of).
Also - did you use the builders recommended solicitor also?0 -
Yes we went with their recommendation initially. Solicitor is aware of issues, the builder is now saying we have an open reservation which allows others to reserve if they want to?!?! Surely that’s not legally possible ��0
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The developer can do what they want effectively before exchange. The same way a seller can puller out at any time. If there is high demand for the properties and they don't feel you will meet the deadline then they can do that. You haven't exchanged so they aren't legally bound to anything.
Speak with your broker and get a full update on exactly where your mortgage is at. Take that to the sales office and see what they say. Also check where the solicitor is at with your searches. If offer and search results are expected writhing the next three weeks then the 18th is do able. They may agree to continue or suggest you reserve another plot. They're doing it to put pressure on you0 -
The developer can do what they want effectively before exchange. The same way a seller can puller out at any time. If there is high demand for the properties and they don't feel you will meet the deadline then they can do that. You haven't exchanged so they aren't legally bound to anything.
Speak with your broker and get a full update on exactly where your mortgage is at. Take that to the sales office and see what they say. Also check where the solicitor is at with your searches. If offer and search results are expected writhing the next three weeks then the 18th is do able. They may agree to continue or suggest you reserve another plot. They're doing it to put pressure on you
That surely depends what the contract they signed when they made a reservation said.
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There may be a reservation agreement but it likely wasn't a contract. Contracts are exchanged by the solicitors usually 28 days after reservation.0
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There may be a reservation agreement but it likely wasn't a contract. Contracts are exchanged by the solicitors usually 28 days after reservation.
You are confusing the specific exchanging of contracts in house purchase, with teh general case
A contract is an agreement between two parties. No one is disputing they haven't exchanged contracts for buying the house . That doesn't mean they didn't enter into a contract to reserve the property for a period of time , because they did when they paid a deposit. That formed a legal agreement (aka "contract")between them, and , it depends what the terms of that contract are.
The OP should read it.0 -
im not confused, I'm aware of the difference. But there's nothing to bind the developer to selling to the OP. I work in new build conveyancing and recently watched a developer pull reservations from numerous individuals in order to sell an apartment block to one purchaser. No fault of the individuals just more beneficial for the developer to sell it in bulk.
Definitely check the agreement but the developer wouldn't include anything that put them at a disadvantage. You have to prove to them that you can meet their deadline and if they don't believe You will meet that they reserve the right to remarket the property. Get all of the hard facts on exactly where you are in process and take it to the site office/ speak with head office and dig your heels in.0 -
im not confused, I'm aware of the difference. But there's nothing to bind the developer to selling to the OP.
How do you know that if you haven't seen the OPs contract !
It may be the case in many cases, even most cases, but even then I suspect that under unfair contract laws such one sided contracts wouldn't stand up. Effectively from what you are saying they are all worthless.0 -
I agree with Another Joe. The point of a reservation agreement is to reserve the property for a period of time, typically 28 days. I don't dispute that there may be some developers who have reservation agreements which don't involve a reservation clause but I suggest that they are in the minority.
I suspect it's more likely that the developer is in breach of the the agreement.
OP - never ever use the builders suggested solicitor or broker. You are worth £1000 to them but the builder will be worth considerably more.
Suggest you read your reservation agreement and see what it says. Would also suggest you consider changing solicitor.0 -
Thought about throwing in the towel but surely he isn’t allowed to do this!
They're allowed to do whatever you agreed they could do when you made the reservation and signed the agreement, so read the T&Cs (yes, all of then, even the boring ones in really really small type) carefully...you may find that a declined mortgage application terminates the reservation agreement ahead of the deadline to exchange, so the builder's completely entitled to do what they're doing.
It could also be a high pressure sales tactic, but until you read the document you signed - which none of us can see, neither you nor we will ever know....0
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