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Arrangement fees - who is liable?
michael11
Posts: 9 Forumite
At the turn of the year, my girlfriend and I bought our first flat, a new-build property that we were advised would be ready in June of this year. We got our mortgage in place and were keenly awaiting the building being completed.
However, the building developers last week informed us that the building would now not be ready until September.
By that time, the expiry date on our mortgage deal will have lapsed and our mortgage lenders have said they cannot possibly extend it a further few months. They have also said that, consequently, we have to pay an arrangement fee of £699.
Surely, we cannot be expected to pay that?
After all, we bought the flat and arranged our mortgage in good faith to the builders that it would be ready on time. For reasons outwith our control, it now won't be. It's completely not our fault.
Surely the builders should cover that cost?
Any advice?
However, the building developers last week informed us that the building would now not be ready until September.
By that time, the expiry date on our mortgage deal will have lapsed and our mortgage lenders have said they cannot possibly extend it a further few months. They have also said that, consequently, we have to pay an arrangement fee of £699.
Surely, we cannot be expected to pay that?
After all, we bought the flat and arranged our mortgage in good faith to the builders that it would be ready on time. For reasons outwith our control, it now won't be. It's completely not our fault.
Surely the builders should cover that cost?
Any advice?
0
Comments
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Nobody's liable.
It's unfortunate but it's one of the costs of almost buying.
This happens all the time with new builds.
The costs are entirely down to you. You chose a mortgage that had an arrangement fee.0 -
Very normal with new builds.
If you check the paperwork, you'll find they're very careful with the wording of when it's due to be completed. I'm sure you'll find that all the promises of a june completion are estimates, or a "likely" completion date, but I'm sure it will not say that it will definitely be complete in June.
Ours was only 2 months late, but we managed to complete the day before our mortgage offer expired!
Is the £699 arrangement fee for the new mortgage you'll need?Should've = Should HAVE (not 'of')
Would've = Would HAVE (not 'of')
No, I am not perfect, but yes I do judge people on their use of basic English language. If you didn't know the above, then learn it! (If English is your second language, then you are forgiven!)0 -
Very normal with new builds.
If you check the paperwork, you'll find they're very careful with the wording of when it's due to be completed. I'm sure you'll find that all the promises of a june completion are estimates, or a "likely" completion date, but I'm sure it will not say that it will definitely be complete in June.
Ours was only 2 months late, but we managed to complete the day before our mortgage offer expired!
Is the £699 arrangement fee for the new mortgage you'll need?
Pretty much, yes. Maybe it's naive of me but I don't see why I should pay money for (1) a service that hasn't been provided, or (2) the builders not completing on time.0 -
Pretty much, yes. Maybe it's naive of me but I don't see why I should pay money for (1) a service that hasn't been provided, or (2) the builders not completing on time.
It's one of those unfortunate situations but:
1) Mortgage offers can't remain open forever. Rates and circumstances change. The fee may be a bit steep, but this is partially what enables you to get the interest rate you have.
2) The builders haven't guaranteed any date, so it's not their liability to pay fees incurred with regard to your mortgage. These things happen and unless it's a long delay and you have some leverage with them, often nothing is done in the way of compensation.0 -
How much would it cost you to pull out of the deal, accepting that you've lost the £699. You may be able to re-negotiate on the overall price given changes in the market?0
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To be fair, our paperwork with them specifies the completion date as June. Not 'on or around' or 'likely to be'.
It simply states: "Completion Date: June 2008".
I don't have a problem with the arrangement fee in principle, it wouldn't be financially prudent of a mortgage lender not to have expiry dates.
My problem is in the fact that I should have to pay it for circumstances that are entirely outwith my control.
It's akin to given detention to a kid who's done his homework on time and a gold star to one who says his dog's eaten his jotter.0 -
How much would it cost you to pull out of the deal, accepting that you've lost the £699. You may be able to re-negotiate on the overall price given changes in the market?
Without wishing to give away specifics in terms of numbers or the circumstances of the deal, it would be financially prohibitive and isn't an option we wish to pursue.0 -
There is a thread started here this morning where a buyer bought a new build off plan and it was 3 years before it completed, with delays.
That buyer has now voluntarily been repossessed as their life had changed and they tried to sell it and couldn't.
So far they've lost £25k. When it goes to auction they will still be liable for probably another £20-30k shortfall on their original mortgage.
Losing £700 in the manner you have is not unusual with new builds.0 -
Check your small print.
Is it an arrangement fee or an application fee?
The docs you signed might say £699 due upon completion.
If you aren't completing...?:think:0
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