Refund of Reservation fee on a new build

helenann

Thanks for all your messages of help - really appreciated.
Yes, i wish we'd taken a step back now, but we really were swept up in the moment as the flat was great and we felt we'd done some 'digging' re what the occupancy was going to be.
The estate agent is a member of the Estate Agents scheme so we have already started the complaint procedure with them which will eventually end up with the Ombudsman (as I fear we will get no where with them before that point).
We have also sent an e-mail to the developer informing them of our situation. (don't hold much hope there either so will be going through the small claims court to try and recover the money).
We did get a receipt for the money sent by e-mail - but that was all we got until we asked for any other paperwork and we were sent the unsigned incomplete reservation form.
We had had loads of friendly dialogue via e-mails throughout the course of us trying different lenders to get the flat approved for a mortgage, so its not like we paid over the money then sat back and did nothing. It was only when we had exhausted every avenue that we said we'd have to withdraw the offer and requested a refund - as its money needed to finanace another flat my nephew has now had an offer accepted on.
And, yes, this is a flat that is being sold and bought in the conventional way - no money for a deposit needed.You live and learn I guess - a very expensive mistake and I note that estate agents rank number 5 of the most untrustworthy professions and I'm beginning to see why.:mad:

dotchas

I am not sure how the builder would know what type of buyer is actually going to purchase the flats, or for that fact the lender, until they are mostly sold.
It could be that all flats are purchased by owner occupiers but 3-4 years later, 50% or more are BTL, when young people outgrow the flats and rent them out.
They equally could be bought as BTL and the government could penalise landlords so much that they then get sold to owner occupiers.
I think its worrying that lenders are panicking

davidmcn

helenann wrote: »

We have also sent an e-mail to the developer informing them of our situation. (don't hold much hope there either so will be going through the small claims court to try and recover the money).
We did get a receipt for the money sent by e-mail - but that was all we got until we asked for any other paperwork and we were sent the unsigned incomplete reservation form.

I'm not sure who the "we" is - you started by saying it was your nephew who was buying, then the reservation fee came from your sister, but you seem to be involved too? Have you and the developer/estate agent been clear about who the buyer actually is?

helenann

Yes, it is my nephew who is buying but his Mum is giving him the 20% deposit and I'm his aunty who is tagging along on viewings etc - the Estate Agent does know it is John who is the potential purchaser, however John is a young lad buying his first property and me and his Mum are along for support and advice - not that we've been much help it now transpires.So I've been using the royal 'we' when posting.

pinkshoes

I would be WRITING to them stating that the £2500 was paid on the basis that the flats were mostly to be owner-occupied and not for the rental market, which the EA assured you would be the case. Your lender has stated that this development is clearly going to be for rental, so will not lend, therefore they have 14 days to refund the £2500 in full.

State that if they feel this is not the case, could they please send you a copy of the signed paperwork stating that the deposit was non refundable, as you were not informed of this, nor received anything stating this.

helenann

Thanks for this advice - I'll not give up without a fight for sure. It's money my sister (who is a pensioner) had saved to help her son out when the time came for him to 'fly the nest'. She is and always has been a single mum and I feel so sorry for as I feel she has been ripped off.
I know people on here are saying we've been stupid but everything we've done has been in good faith - and we've been very niave to 'trust' these people.
Lessons learnt and all that. :rotfl:

FTBAngst

I paid a reservation fee for a new build. I had an email confirming the payment had been received and nothing else. I was given the paperwork three weeks later. Months after that I got my money back because the sales exec had taken.... artistic license with explaining some of the terms on the reservation form. My MP’s office were quite helpful when I phoned them about it. I was told two or three times they wouldn’t refund it. Eventually got it back.

I completely understand where you’re coming from. Hindsight’s wonderful! I was in such rush to reserve a house in this development as there weren’t many left. The remaining houses (8, I think) did all sell within a week. It’s so easy to get caught up in it all

helenann

Hi. Thats encouraging to know that you eventually got your money back.
Sounds exactly the same as my nephew's situation - he loved the flat, was being offered a discount if he committed to offer on the day etc.There was loads of people waiting to be shown around the development that day, so we were rushed along so they could get the next viewers through, they didn't take/have the time to explain about reservation fee's or 28 day time limits and we were clueless about such things. The only thing we were told was in order for them to take that particular flat off the market we would need to pay £2,500.00 and as there were loads of people still to view I suppose we panicked in a way in case someone else wanted it and so my sister paid over the money on the day. No 'reservation form' was gone through or signed - we have since been provided with a copy of this form but there are no details of my nephew on it as the purchaser and not signed by any of the parties - just his name scribbled on the top.
We always just had my nephew best interest at heart and we didn't want him to lose the flat.
I've learnt a lot from this forum and experience already. As we had been assured by the estate agent the development was going to be predominantly owner occupiers we really didn't forsee any problem and paid the deposit (in our eyes it was a deposit not what is now being described as a 'reservation fee') over the phone without any paperwork - got a receipt for the deposit and then started the process of getting the lenders to survey and that's when the problems started as no lender see the flats as suitable security.
I, on behalf of my nephew, am going to the property ombudsman and the small claims court if necessary - fortunately I have saved every single e-mail and believe it or not i'm quite savvy when it comes to things like this as I actually work in a Law Court. (hard to believe, I know, after being taken for such a fool);););)

sal_III

One other thing that seems to have been missed. Did you use a mortgage broker?

If you actually liked the place and the only stopper was it failed Lenders criteria, I'm sure there are Lenders out there who would give you mortgage. How good/bad the terms are going to be is a different matter, but worth exploring.

helenann

Hi. After the HSBC refused to see the property as suitable security the Estate Agent actually recommended a mortgage broker, so we did 'engage' with her - however even the mortgage broker could not find a lender who was willing to see the property as suitable security. We then even tried direct with the TSB and my nephew was given a mortgage promise by them but their valuer was of the same opinion as the others.
We really tried every avenue - it wasn't a case that my nephew changed his mind or found something better - he really wanted this particular flat.
So it was really out of my nephew's control and we finally had to accept that he needed to look for a more 'conventional' flat, which he's now found and offered on and we're waiting for the survey to be completed. It doesn't have the same wow factor of the one he wanted, obviously - as that was a conversion and all new and shiny - but what will be will be.
Just got a fight on my hands to get the £2,500.00 back which is needed for the new flat purchase. Fingers crossed.🤞🤞🤞