Refund from developer.

DOYorks

Good afternoon,
I'd love to get some of your views on an issue ive been having with the developer Persimmon.
In April last year my wife and I reserved a plot on a new Persimmon development. We paid £500 reservation fee, and were told that it would be a June completion. A few weeks later we chose our 'finishing touches' (extras) and paid a deposit on these. Totalled up, I'd spent approx £1300. The contract we signed said that we should complete within 28 days. We used our own solicitor and left them to deal with it, weeks passed with me checking progress. The June completion date passed and we were told July, July passed and we were told August.... in the mean time my solicitor was having trouble getting Persimmon to answer queries. 
Cut to the end, one day in late August I was informed that Persimmon were terminating our contract because we had not exchanged contracts. I asked my solicitor why we had been unable to exchange?? Persimmon could not clarify an issue with road adoption, as a consequence my lender wouldn't lend us the money as they needed this clarification.  We have been left out of pocket and with no new home. We were refunded £250 of the reservation fee. 
Basically I think Persimmon got sick of us asking so many questions, perhaps we should have used their recommended solicitors? 
Shouldn't we have got our extras deposit back too? The plot has subsequently been re-sold. 
Thoughts? 

SmashedAvacado

Your reservation deposit was presumably paid based on receiving a full pack of papers - this ought to have included proper replies on the issue of road adoption. It didn't. So arguably the 28 day period to exchange has not started yet. 

davidmcn

Might depend on how necessary the outstanding enquiry was. Do you know what exactly your solicitor wanted clarified?

DOYorks

Hi, it was regarding road adoption by the local council as there was a strip of land, known as a 'ransom strip' that was over the main entrance of the site. I don't believe Persimmon had even noticed this issue until my solicitor pointed it out. As said, the terms set out by my mortgage lender stated that this needed to be clarified. I guess using their solicitors, this issue might not have been brought up? 

eddddy

DOYorks said:

Hi, it was regarding road adoption by the local council as there was a strip of land, known as a 'ransom strip' that was over the main entrance of the site. I don't believe Persimmon had even noticed this issue until my solicitor pointed it out. As said, the terms set out by my mortgage lender stated that this needed to be clarified. I guess using their solicitors, this issue might not have been brought up? 

But if it wasn't brought up - would that have been a good thing or a bad thing?

If you'd bought the property, you may have found that it becomes a headache to resell when you want to move on - because prospective buyers are unable to get a mortgage, because of the strip of land.

DOYorks

Certainly a good thing, I feel sorry for the people who have moved onto the site, perhaps unaware of this. 

DOYorks

Sorry, I meant it was a good thing it was brought up!

AdrianC

Congratulate your solicitor - he did the job you paid him to do, unlike the solicitor "recommended" to all those other buyers.

No, you didn't exchange - because the developer failed to satisfy your solicitor's queries, so your lender did not think the property was suitable security.

You, however, seem to think this is awfully unfair and you're being denied the opportunity to splooge a vast amount of money at a pig in a poke...?

Extras are rarely refundable - because they've been installed before the failure to buy. If you read the paperwork you signed at the time, it would have stated this. But a grand and a bit of overpriced cupboard doors is cheap compared to later finding issues with the site access.

DOYorks

No, i'm glad the solicitor flagged this up. I will be using them again in the future, not for a new build!
I just thinks its unfair that the developer keeps my money when it was their fault we didnt exchange.
Yes, I was naive in putting down money on extras, but you get caught up with new house fever and are dazzled by the shiny new things. 

SmashedAvacado

AdrianC said:

Congratulate your solicitor - he did the job you paid him to do, unlike the solicitor "recommended" to all those other buyers.

No, you didn't exchange - because the developer failed to satisfy your solicitor's queries, so your lender did not think the property was suitable security.

You, however, seem to think this is awfully unfair and you're being denied the opportunity to splooge a vast amount of money at a pig in a poke...?

Extras are rarely refundable - because they've been installed before the failure to buy. If you read the paperwork you signed at the time, it would have stated this. But a grand and a bit of overpriced cupboard doors is cheap compared to later finding issues with the site access.

I think this is an overly harsh way of looking at it
the developer ought to act honestly and with integrity
if there genuinely is an issue, then they ought to have fixed the issue or offered a full refund
you should not be expected to buy if there is an encumbrance over the land that will impact your use of it - and it sounds like this was the case. In these circumstances, i can't see how the developer can argue that it has kept to its side of the deal. And, presumably the reservation agreement is a consumer contact over which UCTA applies. 
Its not reasonable to be asked to pay a non refundable deposit if there is a fundamental title issue that prevents the property being mortgagable. I would threaten court action on that basis. 

davidmcn

SmashedAvacado said:

AdrianC said:

Congratulate your solicitor - he did the job you paid him to do, unlike the solicitor "recommended" to all those other buyers.

No, you didn't exchange - because the developer failed to satisfy your solicitor's queries, so your lender did not think the property was suitable security.

You, however, seem to think this is awfully unfair and you're being denied the opportunity to splooge a vast amount of money at a pig in a poke...?

Extras are rarely refundable - because they've been installed before the failure to buy. If you read the paperwork you signed at the time, it would have stated this. But a grand and a bit of overpriced cupboard doors is cheap compared to later finding issues with the site access.

Its not reasonable to be asked to pay a non refundable deposit if there is a fundamental title issue that prevents the property being mortgagable.

"If" being the operative word here. If there's really a ransom strip across the access to the development, it seems odd that it hasn't previously been spotted by any of the developers' solicitors, their funders' solicitors, or the solicitors involving in buying/mortgaging the other plots. And that the owner of the strip hasn't already been demanding their ransom! Might be different if it was some title quirk affecting only one plot.

I mean, it's possible the OP's solicitor is the first to spot an actual problem, but the OP is just taking their word for it.