Question re long stop date on new build

mrseff_2

Hi there

Had a chat with my solicitor for the first time in a long time on Friday - she's been off sick so there was lots to cover. She said something which only really sunk in that evening - I will check with her tomorrow but in the meantime I've tried googling it and haven't come up with anything so wondered if the collective wisdom here might be able to shed any light...

I reserved my plot off plan in November - contracts from the developer and my own mortgage offer were a long time in materialising so we are now at the stage of moving towards exchange and the developer is putting pressure on - no problem - I know they need the commitment.

The houses stood still for ages in December and January but have really begun to shoot up. The solicitor asked where mine was up to as that would have a bearing on the long stop date when signing the contract.

She said, if the roof is on, ie the building is watertight from the top then the long stop date is likely to be 2 months. If it isn't then they can offer a long stop date of 6 months or more. Obviously, I would like them to finish it two months from contract signing! The roof frame is on my house along with the gable wall and fascia (sp?). I managed to grab a look at the build schedule when I was in their office and the roof is due to be tiled in the next 10 days...

Solicitor has asked me to keep an eye on it as if it's close she can drag her heels by a few days to ensure we get the shorter date.. Clearly she's not suggesting doing anything to jeopordise the exchange.

So - sorry, that was a very long winded way of saying is my solicitor talking sense or !!!!!!?!

Irishpearce26

A long stop is common with new builds, its a buffer from exchange to completion with notice. I.e. they say building watertight longstop is 2 months which is the maximum time before completion however they could give you 2 weeks notice to complete. Same if its 6 months etc. Just a safety net for the developer but means you need to be on call ready for a notice that could be as short as 10 days to complete.

mrseff_2

Irishpearce26 said:

A long stop is common with new builds, its a buffer from exchange to completion with notice. I.e. they say building watertight longstop is 2 months which is the maximum time before completion however they could give you 2 weeks notice to complete. Same if its 6 months etc. Just a safety net for the developer but means you need to be on call ready for a notice that could be as short as 10 days to complete.

Hi - thankyou yes, I get the need for that safety net for the builder (and me!), I guess it's just whether by piling full steam ahead into exchange before the roof is on that might be letting them relax a bit and focus on other plots before mine as they have 6 months? apparently this developer given completion notice of 7 days - as a renter, this fills me with delight.....!

Irishpearce26

mrseff_2 said:

Irishpearce26 said:

A long stop is common with new builds, its a buffer from exchange to completion with notice. I.e. they say building watertight longstop is 2 months which is the maximum time before completion however they could give you 2 weeks notice to complete. Same if its 6 months etc. Just a safety net for the developer but means you need to be on call ready for a notice that could be as short as 10 days to complete.

Hi - thankyou yes, I get the need for that safety net for the builder (and me!), I guess it's just whether by piling full steam ahead into exchange before the roof is on that might be letting them relax a bit and focus on other plots before mine as they have 6 months? apparently this developer given completion notice of 7 days - as a renter, this fills me with delight.....!

A developer will want to complete ASAP! They just like the benefit of a safety net to then shaft you with a weeks notice. As a renter i feel for you but just keep thinking of your shiny new home! Good luck mate

Thrugelmir

Once you exchange then it's more likely that resources will be scheduled to your build. If other plots are exchanging now then they'll receive priority. Covid has thrown up all sorts of supply issues. Particularly from the Continent. 

pinkteapot

The long-stop is 100% for your benefit. The builder would much prefer you didn't have one, because then you wouldn't be able to get out of the contract if the build is delayed.

You should negotiate a long-stop that falls around the time your mortgage offer expires. The risk comes if you have exchanged contracts, your mortgage offer expires, and you can't get another mortgage. The long-stop date doesn't mean you WILL pull out on that date if the house isn't ready - it just gives you the option to if you're no longer in a position to buy. 

In some cases this won't be possible - if your mortgage offer came through quickly and the house is a long way off being ready then the builder will need a long-stop that's after your mortgage offer expiry and you'll have to take on the risk. You can judge your finances/employment situation and how big a risk it is - if you're at a lower LTV in a long-term secure job then you probably would get another mortgage just fine. 

Whatever the long-stop is, it won't be the case that the builder waits to finish your house until that date. They want them finished and the cash in ASAP. 

OldMusicGuy

We recently bought a new build and our long stop date was one month after estimated completion date. However, initially there was a three month gap between estimated completion date and the long stop date.

The key thing you need to be aware of is that the estimated completion date and long stop dates are not fixed until you exchange contracts. We bought last year, and initially our estimated/long stop dates were 30th June and 30th September. However, on the day we were due to exchange contracts the developers changed the dates to 30th September and 31st October. This was due to COVID and other delays they encountered.  

AdrianC

If the roof isn't on, I presume windows aren't in, and the shell is nowhere near weather-proof. Two month long-stop? Not a hope for a while yet.

eddddy

It's probably worth asking your contact at the developer what the likely long-stop date they will be proposing for your purchase, and/or what their criteria are for deciding long-stop dates.


I wouldn't rely 100% on what they say (there might be an element of saying whatever they think you want to hear), but it might still provide some useful insight.


If you give an impression to the salesperson that you might walk away, if you don't get the long-stop date you want - and hence the salesperson might lose their commission - they might try a bit harder to help you. (Or they might just fib to you instead.)

mrseff_2

Thanks all - understood - exchange is a good thing!! They are currently saying they are hopeful for early July but it may shift into August - my mortgage offer expires on 16th August so I guess that would be the long stop I'd want to push for although it's not very long away. Lender would do an extension on new build offer with confirmation of no change in status.

I don't deal very well with vagueness so this is all very troubling! A nice new home at the end of it though - focus on the goal, focus on the goal!!

princeofpounds

Personally I wouldn't consider a long stop date that goes longer than my mortgage expiry. All that has to happen is for construction delays to bite, you lose your job, and bang - no more mortgage, no more deposit, no more property.

You can of course request extensions to your mortgage deal, once you get within a certain distance of it, so just because 16th August would be your latest date at the moment, it doesn't mean it will be at all points.

The builders won't want to finish building slowly, but lots of stuff can always come up when it comes to development, from financing problems to council paperwork. I'd say target dates get missed more often than not, but usually just by a few days/weeks.

Communication is key here - if you think a bit of back-and-forth as the solicitor suggests helps you get a bit more comfort on the timing, that's fine. 

If the house isn't weathertight I suspect you are still more than two months away. I would say 4, but it's so dependent on the resources thrown at the build and the skill of project management.