3 Month Delay to New Build and Ending Up Significantly Out of Pocket

sh856531

Hi all

We agreed to purchase a new build home from a major house builder in Feb. The expected completion date was mid-June.

My partner is pregnant, so in order to keep things as stress free as possible and to give the builder a significant amount of wiggle room should anything unexpected happen, we aimed to sell our house at the end of July. This would give us a month and a half to play with - an expensive way to go but we felt it was worth it.

The house builder has moved the build date 4 times now, 1 time forwards, and 3 times back. It is now estimated for completion in Mid-September. What this means in practice is that we are homeless from the end of July. I need to find some sort of holiday home style accommodation in the middle of a staycation boom (estimated costs 1.5 - 2.5K per month. What's more worrying is that at the current rate, we may well trip over the next stamp duty cliff, costing us an additional couple of grand overnight.

The best case scenario at the moment is that because the house builder has been wildly inaccurate we will be at least 3 - 4 grand out of pocket and this will rise to a minimum of 6K if they delay past September. This at a time where we are low on funds having just bought a house and having a new baby on the way.

Does anyone know if we have any recourse here other than relying on the house builder's sense of fairness? Just to be clear - I understand completely what the contract says, and yes I did sign it. It essentially says that the house builder and can delay as much as it wants up to 6 months - with no penalty, meaning we bear the risk of its incompetence. It can also demand that we exchange with only 2 weeks notice. The contract is extremely one sided and as written we bear essentially all the financial risk of the housebuilder not being able to meet its obligations

As such - I am not asking about legal recourse. My understanding is that this housebuilder has signed up to the Consumer Code and that this code requires that:

• House builders create fair contracts (highly dubious in this case)
• House builders should provide timely and accurate completion dates (almost certainly not the case here)

I realise these are unusual times and I am not by nature much of a complainer. However I genuinely don't have thousands of pounds to lose simply because a house builder can't do what it said it would. 

Does anyone know if I applied for adjudication with the Consumer Code - would I win if the housebuilder fails to offer any concessions?

Thanks

user1977

What are the reasons for the delays? Are they actually within the developers' control?

Jenni_D

Is this one of those "there's been a pandemic and a Suez Canal blockage, so materials are hard to come by and much more expensive" situations?

Jumblebumble

sh856531 said:

Hi all

We agreed to purchase a new build home from a major house builder in Feb. The expected completion date was mid-June.

My partner is pregnant, so in order to keep things as stress free as possible and to give the builder a significant amount of wiggle room should anything unexpected happen, we aimed to sell our house at the end of July. This would give us a month and a half to play with - an expensive way to go but we felt it was worth it.

The house builder has moved the build date 4 times now, 1 time forwards, and 3 times back. It is now estimated for completion in Mid-September. What this means in practice is that we are homeless from the end of July. I need to find some sort of holiday home style accommodation in the middle of a staycation boom (estimated costs 1.5 - 2.5K per month. What's more worrying is that at the current rate, we may well trip over the next stamp duty cliff, costing us an additional couple of grand overnight.

The best case scenario at the moment is that because the house builder has been wildly inaccurate we will be at least 3 - 4 grand out of pocket and this will rise to a minimum of 6K if they delay past September. This at a time where we are low on funds having just bought a house and having a new baby on the way.

Does anyone know if we have any recourse here other than relying on the house builder's sense of fairness? Just to be clear - I understand completely what the contract says, and yes I did sign it. It essentially says that the house builder and can delay as much as it wants up to 6 months - with no penalty, meaning we bear the risk of its incompetence. It can also demand that we exchange with only 2 weeks notice. The contract is extremely one sided and as written we bear essentially all the financial risk of the housebuilder not being able to meet its obligations

As such - I am not asking about legal recourse. My understanding is that this housebuilder has signed up to the Consumer Code and that this code requires that:

• House builders create fair contracts (highly dubious in this case)
• House builders should provide timely and accurate completion dates (almost certainly not the case here)

I realise these are unusual times and I am not by nature much of a complainer. However I genuinely don't have thousands of pounds to lose simply because a house builder can't do what it said it would. 

Does anyone know if I applied for adjudication with the Consumer Code - would I win if the housebuilder fails to offer any concessions?

Thanks

You have signed a contract with the house builder were they have told you what they might do. ( delay by anything up to  6 months)
I am sorry to say you have no reason to complain and the builder has done nothing wrong
In hindsight you should have had a penalty clause

sh856531

user1977 said:

What are the reasons for the delays? Are they actually within the developers' control?

Difficulty with getting building materials etc

I think the question of whether this is within their control is a tricky one. On the one hand we can blame the pandemic for everything.

On the other hand they are a enormous corporation with significant resources available to them to mitigate risks and there is little that would not have been known to them in February with regards to the pandemic. They knew there was a building boom going on and they should have managed their resourcing better in my view.

Many thanks  

user1977

Even the most "balanced" construction contracts, thrashed out by highly-paid lawyers, are typically going to end up with the client taking some of the risk if there are difficulties sourcing materials etc. Unless you actually have evidence that any of the estimates they gave weren't in good faith, I can't see there's much point pursuing this.

ssparks2003

If you are not looking for any form of legal recourse, are you looking for illegal recourse? 

sh856531

You have signed a contract with the house builder were they have told you what they might do. ( delay by anything up to  6 months)
I am sorry to say you have no reason to complain and the builder has done nothing wrong
In hindsight you should have had a penalty clause

We have signed a contract, this is true. However the builder has also agreed to follow a code of conduct which it is breaching.

Specifically it has agreed to only enter into "fair" contracts. I would say a contract where the builder can do whatever it wants for 6 months and then demand immediate payment with 2 weeks notice is clearly "unfair" because all risk is born by only one party.

It also breached the code as it is required to provide accurate and realistic timescales for completion. I would not say moving dates forward and back 4 times and by missing your initial estimate by 3 months meets any definition of accuracy I'm familiar with.

As I mentioned in my initial message. I understand the legal position. But this is why we have organisations such as trading standards regularly striking down contracts that are unfair. Their is a recognition in law that enormous corporate entities abuse their power and that just because something is in a contract, doesn't make that contract legally sound.

As an example, you mentioned that I should have had penalty clauses. Have you ever tried to even discuss modifying contract terms with an organisation with a FTSE 100 company? It doesn't really work like that and consumers need to find different avenues of recourse to make sure they are not constantly disadvantaged by much more powerful entities 

user1977

sh856531 said:

You have signed a contract with the house builder were they have told you what they might do. ( delay by anything up to  6 months)
I am sorry to say you have no reason to complain and the builder has done nothing wrong
In hindsight you should have had a penalty clause

Specifically it has agreed to only enter into "fair" contracts. I would say a contract where the builder can do whatever it wants for 6 months and then demand immediate payment with 2 weeks notice is clearly "unfair" because all risk is born by only one party.
 

That's all utterly normal. If that were deemed to be "unfair" then it blows a hole in almost every housebuilder's contract. I doubt that's going to happen (or that somebody hasn't already had a shot at it).

mat1964

sadly this is not unusual.  We reserved a new build in April and have now exchanged with a completion date of 1 September, but that is not fixed.  Fortunately I have buyers who have accepted a flexible completion completion date if it's delayed a few weeks.  However, if it's delayed longer than that, we will also be homeless.  Nothing you can do really unless it hits the back stop date.  Very frustrating for you.

We visited our new house Saturday and went inside for the first time.  Everything is more or less in - kitchen/bathroom/flooring and it's had a first paint  - so I'm hopeful 1/9 will be ok.  Garden still needs to be sorted - fencing/turfing etc but actually it almost looks ready to move into.  (Even if it's finished early, 1/9 is still the earliest completion date to match the date when my current mortgage early repayment charge expires).

TBG01

sh856531 said:

You have signed a contract with the house builder were they have told you what they might do. ( delay by anything up to  6 months)
I am sorry to say you have no reason to complain and the builder has done nothing wrong
In hindsight you should have had a penalty clause

We have signed a contract, this is true. However the builder has also agreed to follow a code of conduct which it is breaching.

Specifically it has agreed to only enter into "fair" contracts. I would say a contract where the builder can do whatever it wants for 6 months and then demand immediate payment with 2 weeks notice is clearly "unfair" because all risk is born by only one party.

Did you think it was "unfair" back when you signed the contract? If so why did you continue?