Help developer gone into liquidation after exchange!

Mcgough221

Hi all, we reserved our new build house almost 12 months ago. We have had problem after problem since exchange. Basically the developer was in breach of planning and taken to court by the council so we haven’t been able to complete. They was in the process of working with the council to get the site back on track but have gone into liquidation.

Prior to this we did discuss pulling out and if there was a way we could do this without incurring costs. Solicitor advised that since we are using help to buy, out mortgage offer expires next month and they are in breech if contract we can pull out next month. However I’m now thinking because they are in liquidation and have no way of bringing the site up to standard we could pull out now.

We have found another house we wish to purchase as we have been looking for a few months just incase. However solicitor if in leave for 2 weeks and we are going to need to move fast if we want to secure it.

Has anyone been in this situation before? What was the outcome?

Thanks

Bossypants

If you've exchanged, presumably you've paid your deposit? What does your solicitor say about getting that back, given the circumstances?

Mcgough221

She’s on annual leave for 2 weeks! Yes we paid our deposit that’s what’s bothering us.

davidmcn

Mcgough221 wrote: »

She’s on annual leave for 2 weeks!

isn't somebody covering? Or is it a one woman office?

Yes we paid our deposit that’s what’s bothering us.

And who were you told would be holding the deposit? Solicitors? (fine) Bankrupt developer? (less fine)

Mcgough221

I’m hoping someone is covering but will find out Monday. Only found out about this last night after they closed for the week.

We wasn’t told who was holding it, I assumed (stupidly) solicitors would hold all deposits until completion.

Kyresa

Did you developer provide an NHBC warranty?

http://www.nhbc.co.uk/Homeowners/WhatdoesBuildmarkcover/

PasturesNew

You have promised to buy it. There might be a "get out" clause in your contract. Solicitor will know what "get out" clauses they inserted.

You have a financial interest in what's built. Check with solicitor if they lodged this interest with Land Registry.

Somebody is now in control of the estate. Find out who. They need to know you have a financial interest/deposit (they should know).

You can't just assume/walk away/get your money back as easily as that.

You have a contract, a financial investment, a liability to buy.

On the Internet we can guess and suggest, but every contract and collapse is different, so only your solicitor will know the situation.

Today though ... you can't just shrug, walk and wait for your deposit back. Today you still have a binding contract to buy.

The solicitor MIGHT have held the deposit, but it's not yours any more as it's tied to the contract where you are promising to buy. Legally it is already the collapsed developer's money.

Thrugelmir

Mcgough221 wrote: »

She’s on annual leave for 2 weeks! Yes we paid our deposit that’s what’s bothering us.

As it's a generic question somebody else in the office will be able to assist you.

GDB2222

This depends on the contract. You should have been sent a Copy or at least the draft. Do you still have that?

The deposit is normally held by the solicitor for the seller as stakeholder, which means you can get it back if the contract is terminated by the seller. Alternatively, you may well have grounds to terminate it yourself. That all depends on the wording of the contract, which is why I asked if you have a copy.

Of course, you need to buy elsewhere. This property is on indefinite hold. It’s likely to take somewhere between 2 weeks and 2 months to get your deposit back.

Mcgough221

Solicitor had already advised we can walk away due to their breech of contract. But she advised waiting until next month as our mortgage offer expires then and they have been given a reasonable amount of time to rectify the issue (12 months).

We was just hoping we could get things going much faster now they are in liquidation. However they have several companies running different areas of the business. All appear to be going the same way too. All accounts over due and all owing large amounts of money to another company.

I can’t see how they can finish the work required for the council to lift the enforcement notice to enable to continue with the purchase.

I’m just hoping their solicitor has our deposit. Our warranty is with Advantage but the certificate is with my solicitor. I only have the handbook that does mention deposit cover but not sure if the policy on the house includes that part.

Fingers crossed we manage to get out of the contract, with deposit.

GDB2222

The liquidation is not likely to move the development along. Quite the reverse. The site will get sold on to a new developer, who will have still to sort things with the council, and then bring in contractors to finish the work. That will probably take months or years.