Developers pull out before exchange of contracts. Is the reservation fee and extras paid refundable

SBretherton91

In January 2021, my and my partner reserved a plot on a new build site and instructed solicitors firm - Beaumont Legal on the purchase of the house.
As per the developers, the completion date for the house to be ready was originally end of May 2021, subsequently being pushed back to June 2021 and then July 2021.

We finally received confirmation from the Developers that the completion date was 30th July 2021. Unfortunately, our solicitors had not exchanged contracts by this date and therefore the developers decided to pull out the sale. We had paid £500.00 reservation fee and £2911.00 in extras.

As the developers pulled out of the sale due to the incompetence of our solicitors and therefore not being any fault of our own, will our reservation fee and extras payment be refundable?

user1977

I don't see why it would make a difference from the developers' point of view whether the problem was you or your solicitors - you choose and instruct your solicitors.

SBretherton91

I understand and unfortunately we couldn't have chosen a worse firm.

My question is, because the developers have pulled out and not us, would the reservation fee and extras payment be refundable?

dimbo61

You need to speak to " your solicitors "
and the developers ?
Please tell me that you found your solicitors via the developers ? 
What was the delay in completion ?
Has the property you were buying gone UP or Down in value ? 

SBretherton91

No, we were recommended the solicitors by Optimus Move. We now know in future to instruct the developers recommended solicitors. It's been an absolute nightmare these past 8 months.
We weren't given a reason as to why the developers delayed completion of the house. We assumed it must have been because of Covid.
The property has now been increased by £8,000.

SallyDucati

Actually DON'T use solicitors recommended by developers - they can cause problems too.  It is best to find your own, through personal recommendations of people you know who have used them if possible.

comeandgo

SBretherton91 said:

I understand and unfortunately we couldn't have chosen a worse firm.

My question is, because the developers have pulled out and not us, would the reservation fee and extras payment be refundable?

Surely you pulled out by not exchanging contracts by the agreed date and you would not be entitled to any monies back from developers. 

SBretherton91

We wanted to exchange contracts. We were constantly on the phone to our solicitors trying to push them to exchange but everytime we thought we were getting somewhere they required something from sellers solicitors or from us or just completely lying to us as we found on the facebook page Beaumont Legal Unhappy Customers, we are not the only clients this has happened to. If you search reviews on Beaumont Legal, you'll understand how bad they are. 

In hindsight, we should have switched solicitors but theres nothing more we can do now. I was hoping that we would be entitled to our monies back as the developers have pulled out of the sale.

I have accepted that we have now lost the house but to also lose £3911 on top is a kick in the teeth.

Please note I am a first time buyer, this is the worst experience of my life and I hope to never go through it again. The loss of £3911 is alot of money when all I have done for the past 8 month is battle our solicitors and the developers.

Lets just say its been a huge learning curve!!

MaryNB

SBretherton91 said:

No, we were recommended the solicitors by Optimus Move. We now know in future to instruct the developers recommended solicitors. It's been an absolute nightmare these past 8 months.
We weren't given a reason as to why the developers delayed completion of the house. We assumed it must have been because of Covid.
The property has now been increased by £8,000.

Bad idea. Loads of people did this when buying new builds a few years ago and got stuck with terms that later left their houses unmortgagable - they had been using the developers solicitors and didn't appear to be made aware of these potential issues. Using the recommended solicitors seemed to be a significant factor in the leasehold scandal. A legal firm recommended by a developer is always going to be under more pressure to keep on the side of a developer than an independent. You want someone on your side. 

My friends are buying a new build and were warned not to use the developer's recommended solicitors. They ignored us because they liked the discount. Just before exchanged they came across some terms they didn't like and that were contradictory to what they were told by the sales person. Their solicitor told them not to bother challenging it. I'm not saying they would be successful if they tried but I wouldn't want a solicitor who discouraged me from trying! Obviously the solicitors aren't going to want all their clients kicking off about the terms and annoying the developer, otherwise they'll lose a lot of business via the developer. 

Tiglet2

You may be able to negotiate the return of the reservation fee since the developer pulled out, but 'extras' unfortunately are not usually refunded.  This is because the developer may already have put the 'extras' in place and the additional work and expense to do this is now done.  If you can prove that the 'extras' you paid for are not yet in situ, then you have a stronger case for a refund.

One of the posters has suggested that you lose the money because you did not exchange by the developer's deadline.  However, all solicitors have to do the due diligence on behalf of the client, so if the developer's solicitor does not provide satisfactory responses to enquiries, then your solicitor is correct not to exchange until they are satisfied.  Developers do not usually pull out if progress is being made, however it seems that progress was too slow.  Using the developer's recommended solicitor is NOT a good idea, however you probably would have exchanged by now.  However, it is not until you come to sell in the future, that you then discover all the things that the developer's recommended solicitor didn't tell you.

london21

SBretherton91 said:

No, we were recommended the solicitors by Optimus Move. We now know in future to instruct the developers recommended solicitors. It's been an absolute nightmare these past 8 months.
We weren't given a reason as to why the developers delayed completion of the house. We assumed it must have been because of Covid.
The property has now been increased by £8,000.

Avoid solicitors with conflict of interest, recommendations from developers/EA

Developers likely pulled out to get the increased price.