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Redundancy - just reserved an apartment - what are my options?
MiseryChastain
Posts: 42 Forumite
Hi there
To cut a long story short, I've been selected for redundancy (sort of came out of the blue but I had my suspicions last week when I posted). It's not been confirmed but having worked in HR before I know how these things pan out - they usually have already decided who they want out and have to go through their silly process to box tick for the lawyers. I'm absolutely distraught but stressed out even more because of housing.
A couple of weeks ago, I paid a reservation fee (£500) for a plot in a new build. There was a reservation fee agreement but I still haven't been sent a copy by the seller. I instructed solicitors who have provided me with their client care letter but so far have not begun any substantive work as I haven't paid the searches fees yet. I was in the middle of a help to buy application but that hasn't been made yet and I only have a mortgage in principle (no formal mortgage yet).
In terms of essentially going back on this entire purchase (which I am devastated about) , what liability have i opened myself up to? The way I see, it is really only the reservation fee that I need to get back right? I hadn't even got to the stage of paying the 5 per cent deposit to the sellers - I'm not bound to am I? Basically need to know how to just get out of this transaction ASAP *sobs* I am also job hunting right now so that has become my priority so that I can support myself.
To cut a long story short, I've been selected for redundancy (sort of came out of the blue but I had my suspicions last week when I posted). It's not been confirmed but having worked in HR before I know how these things pan out - they usually have already decided who they want out and have to go through their silly process to box tick for the lawyers. I'm absolutely distraught but stressed out even more because of housing.
A couple of weeks ago, I paid a reservation fee (£500) for a plot in a new build. There was a reservation fee agreement but I still haven't been sent a copy by the seller. I instructed solicitors who have provided me with their client care letter but so far have not begun any substantive work as I haven't paid the searches fees yet. I was in the middle of a help to buy application but that hasn't been made yet and I only have a mortgage in principle (no formal mortgage yet).
In terms of essentially going back on this entire purchase (which I am devastated about) , what liability have i opened myself up to? The way I see, it is really only the reservation fee that I need to get back right? I hadn't even got to the stage of paying the 5 per cent deposit to the sellers - I'm not bound to am I? Basically need to know how to just get out of this transaction ASAP *sobs* I am also job hunting right now so that has become my priority so that I can support myself.
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Comments
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I agree; it's just the £500 and whatever (if anything) that you've agreed to pay the solicitors that you're out.
If you need a mortgage but the searches haven't been done yet, then you can't have exchanged contracts. (Or at least, you can't have done unless your solicitors are absolutely mind boggling incompetent, and I seriously doubt that).
I'm sorry this has happened to you. At least it was now, and not between exchange and completion - this sucks, but that would have been hugely worse.0 -
I agree; it's just the £500 and whatever (if anything) that you've agreed to pay the solicitors that you're out.
If you need a mortgage but the searches haven't been done yet, then you can't have exchanged contracts. (Or at least, you can't have done unless your solicitors are absolutely mind boggling incompetent, and I seriously doubt that).
I'm sorry this has happened to you. At least it was now, and not between exchange and completion - this sucks, but that would have been hugely worse.
Hi Annisele thanks for your reply.
I'm just wondering whether I can actually recover the £500 reservation fee - is that usual practice if you can't go ahead? Surely they can just put it back on the market and increase the offer price by a few thousand having sensed the demand?
Yeh it sucks, I can't believe the timing I truly can't.0 -
MiseryChastain wrote: »
I'm just wondering whether I can actually recover the £500 reservation fee - is that usual practice if you can't go ahead? Surely they can just put it back on the market and increase the offer price by a few thousand having sensed the demand?
What does your contract with the developer say about withdrawing from the purchase? You might be lucky if they stand to make more money by remarketing it, but they may be able to keep your reservation fee anyway and still sell at a higher price.0 -
You'll be lucky to get back the reservation fee as if it was refundable then everyone would be reserving.0
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You should get most of your £500 back, because it's very likely that the developer is signed up to the Consumer code for Homebuilders, which says:Consumer Code for Home Builders – Code requirements
2.6 Reservation
Home Buyers must be given a Reservation agreement that sets out clearly the terms of the Reservation, including, but not limited to:
- the amount of the Reservation fee;
- what is being sold;
- the purchase price;
- how and when the Reservation agreement will end;
- how long the price remains valid;
- the nature and estimated cost of any management services the
Home Buyer must pay for.
The Reservation fee must be reimbursed if the Reservation agreement is cancelled. The Home Buyer must be told of any deductions that may be made.
Link: http://consumercodeforhomebuilders.com/wp-content/uploads/2015/04/Consumer-Code-Third-Edition-Clear-Print-Version.pdf
So you should get your £500 back - possibly less some admin fees. (But they should have warned you about the admin fees in advance. If they didn't, you could argue that they shouldn't deduct them.)
But it seems that some developer's 'forget' that they must refund the reservation fee - so you might have to pester them.0 -
Sorry to hear about your redundancy
I've just had ours refunded by Barratt because we pulled out of the reservation, so definitely ask the question. One mention of the Consumer Code and they processed the refund that day
Let’s just pretend I have not been alternately drowning in debt or only eating toast to try and pay it off for the last 20 years 😭0 -
I recently paid a £500 reservation fee and was told if I changed my mind I would only get £400 back. But I guess it depends on the seller/builder, phone them to see0
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