New Build refuses to sell if I don't use their Mortgage Broker and Solicitor, is that legal?

charlotteDob

Hi All, 
I was hoping I could get some advice on new builds and the help to buy scheme;

It's a bit of a long story but basically, I was on track to buy my first home yesterday with the help of the 'Help to Buy' scheme. I had my 5% deposit, mortgage in principle and my mortgage advisor in place as well as a solicitor. Just as I'd gotten to the point where my mortgage advisor was trying to get in touch with the estate agent I received an email from the agent quoting the seller saying  'they no longer wanted to sell me the property because I wasn't using their broker and solicitor', at no point had I been told that I needed to. Are they allowed to refuse to sell me a property for that reason? I'm a bit stumped and obviously disappointed.

I'm no longer involved in buying the property as I was not happy to go with their services. Their mortgage broker had already found me a mortgage that she was happy with but it wasn't the best deal. My chosen mortgage broker is a friend who was also recommended to me by several of my other friends, so of course, I would rather go with him as I already trust him (with this huge life-changing purchase that I'm about to make).

This has all happened over the course of 2 and a half days, with the estate agent sending me daily, multiple emails demanding my solicitor's details which at that point I was still waiting for a couple of different quotes to come back before I decided who I wanted to go with. I was also receiving emails from him questioning my genuine desire to purchase the property as he felt that I 'didn't really want it'.

So the timeline of events - Saturday 16th May 2020 I went to view the property, Sunday decided I definitely wanted to go ahead and buy it so I filled my details out and sent it to their broker so they could get me a DIP, Monday I had my DIP and paid my reservation fee, Tuesday I had my meeting with my chosen mortgage advisor, he found me a great mortgage deal, Wednesday morning I had all my solicitors quotes back and had decided on who I would use, Wednesday early afternoon received the email to say that the seller will not sell me the property because I'm not using their broker and solicitor. 

All in all its been an absolutely awful experience, I thought I'd found my dream apartment, in my desired location. I'm more than able to afford it based off of my annual salary. It was all coming together ...

I'm struggling to find any actual advice, I have found articles stating that this is not ok but I don't know what to do about it, this can't be normal! No one would ever buy a house if it was. My dream apartment has now gone to someone else (there'll be other apartments/houses so that's fine) and I'm waiting for my £500 reservation fee to be returned (wouldn't be remotely surprised if I never see it again). I might have spent the better part of yesterday afternoon roaring my eyes out (whilst also trying to WFH full time!) But I now just want to report them to someone, this can't be ok?

Any advice would be greatly appreciated!
Kindest,
Charlotte

unforeseen

I suppose that they are within their rights to set conditions providing it is not classed as discrimination under the equality act. 

RelievedSheff

We didn't have to use the developers mortgage advisors but we did have to have a quick phone call with them and answer a few questions just to check that we did qualify for a mortgage before the developers accepted our reservation. 

After that we still went ahead with our own mortgage advisor.

Are you sure something has not gotten lost in translation somewhere?

Freecall

Broadly they can put any conditions they like on the sale.

If they make it a condition that you have to stand on one leg while they show you round then that's the way it is.

You are clearly switched-on enough to know that you need your own independent legal advice.  They have chosen to discriminate against switched-on people.

Unfortunately for you, unlike certain forms of discrimination (race, gender etc) there is no law prohibiting companies from discriminating against the switched-on.

davidmcn

Yes, it's legal for them to have such a policy. You can of course try standing your ground and seeing if they will relent (or rather you could have if they hadn't sold it to someone else).

AdrianC

charlotteDob said:

I received an email from the agent quoting the seller saying  'they no longer wanted to sell me the property because I wasn't using their broker and solicitor', at no point had I been told that I needed to. Are they allowed to refuse to sell me a property for that reason? I'm a bit stumped and obviously disappointed.

Yep, they can refuse to sell you a property for any reason or none, so long as it isn't illegal discrimination.

I'm no longer involved in buying the property as I was not happy to go with their services.

Wise move.

Their mortgage broker had already found me a mortgage that she was happy with but it wasn't the best deal. My chosen mortgage broker is a friend who was also recommended to me by several of my other friends, so of course, I would rather go with him as I already trust him (with this huge life-changing purchase that I'm about to make).

The broker is less relevant - the worst that a developer-tied broker can do is find you a cheaper deal... But the solicitor is the ONLY person on your side in the purchase process. If a developer doesn't want your solicitor snooping, why not? What are they trying to sneak through?

This has all happened over the course of 2 and a half days

At least you haven't wasted much time, then, on these oxygen-thieves.

My dream apartment has now gone to someone else

And there we have the real reason... You were gazumped!

(there'll be other apartments/houses so that's fine)

With all due respect, don't over-egg it. Generic new-build flats aren't "dreams". They're pragmatic stopgaps.

and I'm waiting for my £500 reservation fee to be returned (wouldn't be remotely surprised if I never see it again).

Write to them with a deadline for its return, since they're the ones that have pulled out. If that doesn't happen, letter before action, then small claim.

charlotteDob

Thank you for your responses. It's such a shame that they're allowed to operate in this way. 
I'm lucky that I am surrounded by friends who are third and fourth-time buyers that work within financial services, they've been able to guide me through this process and pass on their trustworthy contacts. But even they have all been shaken by the emails and phone calls I've had to deal with over the past few days. None of them has encountered anything like it before, whether they were buying a house, flat or a newbuild. 

My feelings were that if both the agent and builder conduct their business in this way then I'd be concerned about the quality of the property and everything that goes with it. It felt risky.

I've already lost 4 days to this whole mess I don't want to lose any more, I was just curious to see if I had a leg to stand on or if there was a governing body I should report them to. I'll take it as a learning experience and continue to feel relieved that I wasn't further into the process before the red flags started smacking me in the face!

Thank you again All  

Sensory

Out of curiosity, who was the developer/agent?

princeofpounds

Just FYI OP, under the Help to Buy eligibility criteria guidance (page 12) 'Developers are required to comply [not register - PoP] with the Consumer Code for Homebuilders and reimburse reservation fees if the Reservation agreement is cancelled'.

https://www.gov.uk/government/publications/help-to-buy-equity-loan-participation-and-registration-pack

Let's look into the CCfH...

https://consumercode.co.uk/home-builders/what-is-the-code-and-why-is-it-important-to-me/

Section 2.5 "Home Builders must advise Home Buyers to appoint a professional legal adviser to carry out the legal formalities of buying the Home and to represent their interests."

and in the guidance:

"You may offer incentives and/or refer Home Buyers, for example, to a panel of solicitors. But you should not restrict the Home
Buyers’ choice of legal representative, financial advisor or mortgage intermediary that they may wish to use."

Looks like they may well be breaching 2.6 guidance as well (depends on a bunch of details):

"Once the Reservation agreement is signed (which can include being accepted electronically), you should not sell or try to sell the Home to another buyer before the deadline date when the Reservation agreement will end, or before the date when the buyer cancels the Reservation agreement, whichever occurs first."

Now, don't get too excited about this. The requirement to comply with the CCfH is not for your benefit as a consumer. But it may well be be worth getting in touch with HTB by writing and detailing the violations, noting their policy. They may get nothing more than a slap on the wrist (government organisations being as weak and lazy as they are) but it could put a flag up on a pattern of behaviour.

If they are actually registered with CCfH then you can complain direct to them too. There is an adjudication process but you will only get demonstrated losses reimbursed, and that's unlikely to be that useful to you. But again, a complaint raises flags about compliance. 

charlotteDob

Sensory said:

Out of curiosity, who was the developer/agent?

Its Chancery Estates Lettings and Management and then the builder is Mandale Homes. Neither are big names, I don't think, and clearly I should have done some homework on them before I went ahead.

Neil49

I've just googled Mandale Homes and I think you had a lucky escape! 

Put it all behind you and start looking again  but this time do your research beforehand.