New build delay- compensation

Abbey10

Hi All,

I am looking for some advice regarding seeking compensation for delays in our new build. We reserved a house for £350k in July 2019 and exchanged on 4th Sep 2019. The house was by and large built when we reserved, the roof was on the majority of the house, with only the roof over one room pending. In July we were told to expect to complete in October/November 2019.

We were first informed of delays late October and since then things keep getting pushed out. Delays have been due to this area of roof and errors with orders. We moved out our rental accommodation in November- our AST was finished, the developer gave us reassurance re the expected completion date and the landlord would not agree a rolling contract. Then at the end of our notice period the developer told us we were delayed until mind December. We moved in with friends and placed our belongings in storage. We were then told in December we were delayed till early Jan. At the beginning of the year we were told the build was now due to finish in early Feb and we would complete in Feb, that there wouldn't be any more delays (sales adviser said nothing else could go wrong!). We have just found out we are delayed again and due to complete near the end of March.

These delays have put us under significant difficulties/stress. As they keep coming in drips its really hard for us to plan and we constantly feel disappointed. Our finances are taking a hit.

Half of the bills at our friends plus storage is actually more £ than what we were paying for all bills at our rental, so we are out of pocket. Not that it makes a huge financial impact, but we will have paid a total of 3.5 months towards someone else's mortgage rather than our own.

We can no longer stay with these friends as they have family coming to stay from abroad. Flights are booked so the dates cant be changed. So this new delay means that we will have potentially nowhere to stay for 2 weeks. We have limited options to stay with people so a hotel/air b&b is most likely.

All of this is eating into our pot of money for furnishing/decorating the house. It has been really stressful and tarnished the experience of our first purchase.

The developer advised they will look at what they can offer to help us out. What level of compensation would be reasonable here? Would it only be reasonable to expect our direct costs to be covered or to ask for some more due to the stress/inconvenience?

TIA!

foxy-stoat

No compensation - thats the risk with new builds. The contract you signed wouldn't of left them in breach for any delays, apart from maybe 6 months after completion date and then it will be the full refund of your deposit.

Your mistake was leaving your rented house - the landlord would of spend many months trying to evict you when you when onto a rolling contract - they couldnt of thrown you out on the street if you didnt sign another AST.

How have you paid for 3 and half months for someone else's mortgage, did your friend only let you stay if you paid their full mortgage?

You must of saved so money for not paying for council tax, utility's and other monthly living expenses.

Good luck.

pinkteapot

Agree with foxy-stoat. I'm surprised the developer's offering anything, so would be inclined to take whatever they offer as if you try to argue for more money they might withdraw their offer.

Does your contract have a long-stop date?

SmashedAvacado

Your position at least partly depends on the contract you signed, and whether they have done what they said they would.

What did your contract say?

Presumably part of the upside to your finances being hit is that you havent had to pay the developer anything more than a deposit at the moment - so you have not being paying a mortgage?

Abbey10

Thanks for your reply. I do understand that's the risk and you are correct re our contract but it was actually the developers sales adviser who implied compensation. She could see I was upset when I was told of the further delay and the prospect of having nowhere to live for a few weeks, and having to pay for a hotel. She said that she would have a meeting with the regional manager and "see what they could do to help". So my question isn't what am I entitled to, its more what would be reasonable as I am expecting a call from them later today.

Apologies- to clarify, my friends are renting. So together with my friends, we are paying rent to the landlord who has a mortgage. Instead of paying 3.5 months of my own mortgage.

We are paying half of all bills, including rent. We are absolutely not saving any money. It is costing us more. The council tax is more expensive in this area. Their utility bills are more expensive than what ours were (they rent a 3 bedroom house, we had a flat, its not just more because of us living there). Our commute is longer than what it was so more fuel costs. We are paying storage. The cost to insure our contents in storage is more than what our contents insurance was (our policy didn't cover storage for the value we needed).

Slithery

Abbey10 wrote: »

We moved out our rental accommodation in November- our AST was finished, the developer gave us reassurance re the expected completion date and the landlord would not agree a rolling contract.

You shouldn't have moved out. It's irrelevant what the LL wanted - a rolling contract is your legal right.

See...
Ending/renewing an AST

Abbey10

I agree we shouldn't have moved out. However, we were given assurances by the developer and had resistance from our landlord and did move out. Hindsight is a great thing.

My question is what would be a reasonable expectation given that the developer has implied they will be giving compensation. Should we take what they offer even if its less than what we will be out for accommodation for this 2 week gap? Should we ask for them to cover our additional expenses for the delays?

foxy-stoat

Abbey10 wrote: »

My question is what would be a reasonable expectation given that the developer has implied they will be giving compensation. Should we take what they offer even if its less than what we will be out for accommodation for this 2 week gap? Should we ask for them to cover our additional expenses for the delays?

Take what ever the sales people give you, they wont give you anything towards the additional expenses. You may get free flooring, grass, washing machine or whatever if you haven't already. As you have already exchanged contracts they are not obliged to give you anything.

Good luck and hope you get in very soon.

comeandgo

Don't hold out for anything of value. You may get a tumble dryer or something. If they start giving to one late purchaser they will have to give to them all.

eddddy

Abbey10 wrote: »

I do understand that's the risk and you are correct re our contract but it was actually the developers sales adviser who implied compensation. She could see I was upset when I was told of the further delay and the prospect of having nowhere to live for a few weeks, and having to pay for a hotel. She said that she would have a meeting with the regional manager and "see what they could do to help". So my question isn't what am I entitled to, its more what would be reasonable as I am expecting a call from them later today.

It's unlikely that you are 'entitled' to any compensation - unless it says so in your contract (which I would doubt).

TBH, I wouldn't be too surprised if the sales adviser just said that to get you out of the office, or off the phone. But maybe they'll come up with some kind of 'goodwill gesture'.


However, you may have a 'long stop' date in the contract. i.e. If the property isn't ready by the 'long stop' date, you can walk away without any losses.

Is your mortgage offer still valid? They often only last 6 months.

Often a 'long stop' date is used to make sure that you don't find yourself with an expired mortgage offer, but still committed to a purchase.

SmashedAvacado

foxy-stoat wrote: »

Take what ever the sales people give you, they wont give you anything towards the additional expenses. You may get free flooring, grass, washing machine or whatever if you haven't already. As you have already exchanged contracts they are not obliged to give you anything.

.

They are only not obliged to give you anything if the contract is clear on that, and otherwise the seller has acted in accordance with the terms of the contract - and any scheme that they are in (for example some house builders are signed up to good practice schemes that require them to be communicative / and accurate).

The consumer code, for example, requires "The Home Buyer must be given reliable and realistic information about when construction of the Home may be finished, the date of Legal Completion, and the date for handover of the Home." If that date was not / never realistic then you do potentially have redress. This may be why they are offering you compensation. if they have done this openly (ie in correspondence) by someone authorised, then this is helpful and it would be hard to see how they could withdraw the offer unilaterally without exposing themselves to a complaint on that basis.