Scotland: backing out after signing missives

Valexys

Hi all, some advice please - and yes I know I've got myself into a bit of a pickle...

I recently reserved and signed missives on a house purchase from a new-build with a property developer, due to be ready in April/May.

However, I've since had a change of heart and want to back out. I'm aware that this is a breach of contract and the developer could sue me. I'm just not sure what that is likely to look like - how would they quantify the amount? In reality all they lost is maybe 1-2 months of time which could have been used to find an alternative buyer, but chances are that if I back out now, they would still find another buyer before the house is even ready to move in to!

Is there anything at all that I can do?

Thanks
V

user1977

Read the relevant clause in the missives to see what it says, but generally it will allow them to pursue you for their costs in re-selling the property (so marketing and legal costs), and any shortfall in the price if they can't sell it for the same price. Which could be substantial.

Talk to your solicitor anyway (who hopefully wasn't one "recommended" to you by the developer...), they should have advised you before you concluded missives what the penalties would be for breach of contract and how best to approach this. Giving th developers advance notice may help to mitigate any losses (by giving them as much time as possible to find another buyer).

Valexys

Yes, my solicitor is one that they recommended...

They have a different plot for sale which is the exact same property as mine, which is £8,000 above what I paid. If I back out and they sell the house for *more*, could that be deducted from any potential amount I have to pay?

Thanks

Valexys

Also - I've already paid £500 deposit and £3000 upon signing missives. 

I'd be happy for them to keep the full amount for their trouble. Could I propose this in exchange for being able to back out?

ProDave

Have the missives been CONCLUDED?  That is when it becomes binding.

user1977

Valexys said:

Yes, my solicitor is one that they recommended...

They have a different plot for sale which is the exact same property as mine, which is £8,000 above what I paid. If I back out and they sell the house for *more*, could that be deducted from any potential amount I have to pay?

If they make a profit by re-selling the plot, they can't sue you for causing them a loss. If you think that's likely, it would seem daft to offer them the £3500.

GDB2222

In England, if the buyer backed out after exchanging contracts, he’d be liable for at least 10%. That’s even if the seller made no loss at all. It’s interesting how different the systems are.

I assume that signing the missives means nothing? It’s when they are concluded that matters? Presumably, the op knows that, though, and he just expressed himself non-technically?

user1977

GDB2222 said:

In England, if the buyer backed out after exchanging contracts, he’d be liable for at least 10%. That’s even if the seller made no loss at all. It’s interesting how different the systems are.

Yes, it's always struck me as rather potty than an English vendor can just pocket the deposit (and perhaps remarket for a profit). It's not normal in Scotland for there to be a contractual deposit at all, newbuilds (and auctions) are the exceptions.

I assume that signing the missives means nothing? It’s when they are concluded that matters? Presumably, the op knows that, though, and he just expressed himself non-technically?

It's not normal for the parties to personally sign the missives, generally the missives are formal letters between the solicitors on behalf of their clients - and they're not signed in advance of actually being issued. Again, newbuilds tend to be an exception (not sure why) with the buyers often signing the builders' standard form of contract. I'm assuming though that the OP isn't mistaken about them already being in a binding contract.