New Build deposit - reservation cancelled after 18 hours

mat1964

On 27/10 at 5pm I sent a £2k deposit to a home builder as a reservation fee.  I had not seen or signed the reservation agreement at that time but was encouraged to send the funds by the Estate Agent as others were interested.  The next morning, my buyer pulled out so I had to pull out.  The Agent told me given it was so quick and I had not signed the agreement, I would receive a refund in full.  However, the developer has only refunded half of it, so I am out £1000.

I can't see how this is fair.  The developer would not have incurred any costs during the very short period they had the funds.

I am wondering whether to go to the small claims court - given the agreement was never signed, it was less than 24 hours (maybe cooling off laws apply?).  Any thoughts welcomed.

FinallyStoppedLurking

A verbal contract can be binding. Sending teh funds would be a pretty good indication that you were agreeing.

macman

Have you asked the developer on what basis they have retained half? I would expect it to be all or nothing.

dimbo61

Write a letter asking for your money back giving them a time frame say 7/14 days.
If No reply then a " Letter before action " letter.
Follow the small claims court guidelines and Good luck on getting the full deposit returned.

FinallyStoppedLurking

dimbo61 said:

Write a letter asking for your money back giving them a time frame say 7/14 days.
If No reply then a " Letter before action " letter.
Follow the small claims court guidelines and Good luck on getting the full deposit returned.

On what grounds?

AdrianC

mat1964 said:

On 27/10 at 5pm I sent a £2k deposit to a home builder as a reservation fee.  I had not seen or signed the reservation agreement at that time but was encouraged to send the funds by the Estate Agent as others were interested.

So you just sent £2k because the EA said "You should do this really quickly", without actually reading any of the Ts & Cs around what the £2k was actually for, and whether there was any right to get it back if you changed your mind?

I am wondering whether to go to the small claims court - given the agreement was never signed...

If there was no enforceable contract, what was the £2k for?

If the developer turned round and said "What reservation? We don't have any sign paperwork from you", would you shrug and say "Oh, yeh. We never did have any kind of enforceable contract, hey-ho"?

You're wanting to cancel the contract because your buyer has pulled out. Can you find another buyer within a timeframe acceptable to the developer? Will they PX your old property?

mat1964

dimbo61 said:

Write a letter asking for your money back giving them a time frame say 7/14 days.
If No reply then a " Letter before action " letter.
Follow the small claims court guidelines and Good luck on getting the full deposit returned.

yup - I think that's what I will do.  Apparently the developer is going to send a letter/email explaining their reasons for retaining £1000.  I will wait until I receive that.

Exodi

mat1964 said:

dimbo61 said:

Write a letter asking for your money back giving them a time frame say 7/14 days.
If No reply then a " Letter before action " letter.
Follow the small claims court guidelines and Good luck on getting the full deposit returned.

yup - I think that's what I will do.  Apparently the developer is going to send a letter/email explaining their reasons for retaining £1000.  I will wait until I receive that.

You mentioned that you paid the deposit at 5pm the day before - how long was it for your ex-buyer to contact you, pull out, and you contact the estate agent whom contacted the developer?

The reason I ask is I can imagine the developer will claim that upon the estate agent letting them know you've paid a deposit, they rejected all the other applicants so have been effected.

Plus, I'm siding with AdrianC's views, especially with regards to claiming that there is no contract... what would you say the 2k was for then? Let's not forget that this is literally what deposits are intended for, they could have tried to keep it all.

moneysavinghero

Check if your developer is signed up to 
https://www.consumercodefornewhomes.com
(or check if they are signed up to similar code and see what that code says)

If they are then they are bound to the following:

The Buyer may cancel the Reservation Agreement during the agreed reservation period in which case the Reservation fee must be refunded by the Developer within 14 working days of the date of notice of cancellation given by the Buyer. The reservation period may be extended by mutual agreement between the Buyer and Developer. If the deadline date is not extended and contracts have not been exchanged, the Reservation Agreement automatically expires.

The Reservation fee must be refunded in full if the Buyer wishes to cancel the reservation for any reason within seven working days of signing the Reservation Agreement. 

macman

The good news is that, if they intended to hold you to the contract, the developer would not have refunded £1K. I think you've got off very lightly.

mat1964

macman said:

The good news is that, if they intended to hold you to the contract, the developer would not have refunded £1K. I think you've got off very lightly.

well you have obviously seen a different contract then to the one I had which said nothing of the sort.

Anyway, much to my surprise, so even though I have not received any additional correspondence from the developer, the additional £1000 just dropped into my bank account, so situation resolved.  Thanks for the replies.