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Advice please - Exchange not possible on new build due to legal issues with development
rm722
Posts: 3 Newbie
Hello,
Thank you for reading this thread. Any advice you have would be much appreciated.
I put in an offer via Help to Buy for a 2 bed new build property in SE London in October last year and it was accepted. I proceeded to pay the reservation fee. The sales agents indicated to me that I would be able to move in prior to Christmas. I sorted out the mortgage in the next month and began to sense some reluctance on the part of the seller's solicitor's towards the exchanging of contracts. We received a copy of the contract (longstop date Apr 2019) and then they went AWOL. In the meanwhile, the sales agents told us the dates were slipping - first to Jan and then to Feb. After much chasing from my solicitor, the developer's solicitors said they had an issue with the freeholder that was currently preventing them to exchange contracts.
Towards the end of Feb, I received a general update via the sales agents where I was told the delays were due to some shortage of construction material and some issue with live wires under the development that UKPN needed to remediate. The live wires were supposedly found to be not-live when UKPN dug down to them and the delays were supposedly behind us. Completion notices were to be served in early Mar 2019.
The date came and went. I received no completion notice. I chased the sales agents daily but was stonewalled. Then I received another update from the developer via the sales agents, which said this:
I can confirm that the construction works have been completed to the point where beneficial occupation of the buildings can take place, I am afraid that I have to report a further issue which is likely to delay completions and the occupation of [the property]. In November 2018 our solicitors wrote to the Land Registry to register the various properties within [the development], on which we had exchanged agreements for sale. In early December the Land Registry wrote back suggesting that there was a discrepancy with the identified boundary line against [a nearby estate]. The discrepancy is minor and has arisen from the fact that [the development] and [the nearby estate] were all originally one estate in the ownership of [the Council] and a previous rectification agreement failed to pick up a small Boundary discrepancy. In resolving the discrepancy, an added issue may have been the fact that [the Council] have themselves exchanged contracts to sell [the nearby estate] for re-development.
It further went on to say a resolution had now been agreed, engrossments would now be prepared and the issue should supposedly be resolved soon. I was obviously angry that this had been known since December and no one had informed me and when I contacted the sales agents, they said there had been a mistake and the letter wasn't meant for me. I should ignore it. But they had no answer as to why my completion was being delayed. When I told them that the developer's solicitor had spoken of a similar issue, they hinted that perhaps there were two issues affecting different sets of apartments in the development
I have deduced since then that my property is probably affected by this issue and the letter was meant for those who had exchanged contracts with the developer (longstop date of Apr 2019 approaching fast), not for me as I only had the property under reservation and so perhaps wasn't entitled to an official update. I have been chasing the sales agents everyday and everyday I am told they have no updates, the issue will be resolved soon, they can't arrange a meeting between me and the developer, the developer is traveling and they can't reach him, they have a meeting with the developer and would have an update after that but oh, the meeting got cancelled. And so on. The developer's solicitor does not provide any proper responses to my solicitor.
I do know that some apartments in the development have exchanged keys and people have started moving in. Whatever the legal issues are, they only affect some properties in the development, not all of them.
Obviously, my anger and frustration has crossed all limits but I don't want to rant here. I know this is a long read but I appreciate anyone who has gotten this far and any advice/opinion would be appreciated. I am a first time buyer with no experience in the property market and obviously feel I'm being taken advantage of. My specific questions are:
1. Do I have any rights as a consumer where I can force the developer or the sales agents to give me a proper reason, details, updates and timelines regarding whatever the issue that is stopping completion on their end?
2. Would anyone with legal experience have any sense of whether the types of legal issues being described here are resolved fairly quickly or can be stuck for years and years?
3. If you were in my shoes, would you cut your losses or hang around? My mortgage offer expires in May and it can't be extended, so I will have to apply afresh.
I know some of those questions would have subjective answers, but I am looking for what other people would think/do in this situation.
Thank you so much!
Thank you for reading this thread. Any advice you have would be much appreciated.
I put in an offer via Help to Buy for a 2 bed new build property in SE London in October last year and it was accepted. I proceeded to pay the reservation fee. The sales agents indicated to me that I would be able to move in prior to Christmas. I sorted out the mortgage in the next month and began to sense some reluctance on the part of the seller's solicitor's towards the exchanging of contracts. We received a copy of the contract (longstop date Apr 2019) and then they went AWOL. In the meanwhile, the sales agents told us the dates were slipping - first to Jan and then to Feb. After much chasing from my solicitor, the developer's solicitors said they had an issue with the freeholder that was currently preventing them to exchange contracts.
Towards the end of Feb, I received a general update via the sales agents where I was told the delays were due to some shortage of construction material and some issue with live wires under the development that UKPN needed to remediate. The live wires were supposedly found to be not-live when UKPN dug down to them and the delays were supposedly behind us. Completion notices were to be served in early Mar 2019.
The date came and went. I received no completion notice. I chased the sales agents daily but was stonewalled. Then I received another update from the developer via the sales agents, which said this:
I can confirm that the construction works have been completed to the point where beneficial occupation of the buildings can take place, I am afraid that I have to report a further issue which is likely to delay completions and the occupation of [the property]. In November 2018 our solicitors wrote to the Land Registry to register the various properties within [the development], on which we had exchanged agreements for sale. In early December the Land Registry wrote back suggesting that there was a discrepancy with the identified boundary line against [a nearby estate]. The discrepancy is minor and has arisen from the fact that [the development] and [the nearby estate] were all originally one estate in the ownership of [the Council] and a previous rectification agreement failed to pick up a small Boundary discrepancy. In resolving the discrepancy, an added issue may have been the fact that [the Council] have themselves exchanged contracts to sell [the nearby estate] for re-development.
It further went on to say a resolution had now been agreed, engrossments would now be prepared and the issue should supposedly be resolved soon. I was obviously angry that this had been known since December and no one had informed me and when I contacted the sales agents, they said there had been a mistake and the letter wasn't meant for me. I should ignore it. But they had no answer as to why my completion was being delayed. When I told them that the developer's solicitor had spoken of a similar issue, they hinted that perhaps there were two issues affecting different sets of apartments in the development
I have deduced since then that my property is probably affected by this issue and the letter was meant for those who had exchanged contracts with the developer (longstop date of Apr 2019 approaching fast), not for me as I only had the property under reservation and so perhaps wasn't entitled to an official update. I have been chasing the sales agents everyday and everyday I am told they have no updates, the issue will be resolved soon, they can't arrange a meeting between me and the developer, the developer is traveling and they can't reach him, they have a meeting with the developer and would have an update after that but oh, the meeting got cancelled. And so on. The developer's solicitor does not provide any proper responses to my solicitor.
I do know that some apartments in the development have exchanged keys and people have started moving in. Whatever the legal issues are, they only affect some properties in the development, not all of them.
Obviously, my anger and frustration has crossed all limits but I don't want to rant here. I know this is a long read but I appreciate anyone who has gotten this far and any advice/opinion would be appreciated. I am a first time buyer with no experience in the property market and obviously feel I'm being taken advantage of. My specific questions are:
1. Do I have any rights as a consumer where I can force the developer or the sales agents to give me a proper reason, details, updates and timelines regarding whatever the issue that is stopping completion on their end?
2. Would anyone with legal experience have any sense of whether the types of legal issues being described here are resolved fairly quickly or can be stuck for years and years?
3. If you were in my shoes, would you cut your losses or hang around? My mortgage offer expires in May and it can't be extended, so I will have to apply afresh.
I know some of those questions would have subjective answers, but I am looking for what other people would think/do in this situation.
Thank you so much!
0
Comments
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Is there a long stop date in the contract?0
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OP says April 2019. That's probably the extent of their useful rights i.e. they can walk away and buy something else instead.AnotherJoe wrote: »Is there a long stop date in the contract?0 -
Thanks I missed that. Well, given the history here I'd be inclined to walk.
House prices havent gone up since a year ago anyway have they? Maybe even dropped. SO potentially could get cheaper now.0 -
Thank you for your reply. I am thinking about walking away too. Was wondering if this lack of transparency was par for the course for the property market in the UK? Am I being unreasonable to expect more information and/or updates on what is causing the delay and what is being done to resolve it? Even if I do walk away, is there an overseeing body I could complain to because surely I have some rights here as a customer!0
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Not sure how much more transparent the developers can be at this stage. There's a title problem, they're trying to sort it out, obviously it's in their own interests to do so as quickly as possible (you can walk away from it, they can't!), but given there appear to be several parties involved nobody can give any promises about how long it will take. Maybe they could have told you about it earlier, but a few months ago everyone would probably have hoped it would be sorted before construction was complete.
If you want more certainty about when things will be built or what the title deeds look like, it's best not to buy off-plan!0 -
Okay, this helps. Thanks!0
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patience is a virtue rm. If you trust your solicitor then leave it to him or her. I reserved a new build back in mid august, only a small development and exchange was supposed to happen 6 weeks later with completion by november. Well, my solicitor noticed that a couple of important bits of paperwork were missing and these wheels turn very slowly when it involves utilities and nhbc. So now it is 8 months and I packed 2 months ago, the final bit of paper came through this morning. I still have to wait for OS2 from the land reg and the engrossment and the final bill and then I can exchange. Maybe later this week, if I am lucky, maybe next week, which will make it 36 weeks
The upside is if you ever come to sell, then you will not have that awful selling stress caused by having to answer 40 questions, some of which have no real answers0 -
These kind of problems are far from uncommon when buying off plan. Our completion was due to be March and ended up being October. All manner of excuses but completed in the end. Very frustrating as we'd already been forced to exchange within 28 days of reservation!0
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