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  • FIRST POST
    • jtm8866
    • By jtm8866 3rd Feb 18, 9:08 PM
    • 33Posts
    • 14Thanks
    jtm8866
    Pulled out before exchange - invoiced for costs!!
    • #1
    • 3rd Feb 18, 9:08 PM
    Pulled out before exchange - invoiced for costs!! 3rd Feb 18 at 9:08 PM
    I reserved a new build property with £500 reservation fee and then applied for the mortgage and help to buy application. After few weeks, our mortgage and HTB application got approved. Meanwhile, we were going through some optional free and paid extras (such as flooring, tiling etc) for the house with sales agent. I was notified that I will have to pay additional for these extras but not need to pay until the contract exchange date or after this day. However, no agreement was made about what would happen if we pull out of the purchase before the contract exchange.

    We have only signed the reservation form and extras form but nothing had it in written regarding to the payment of extras nor verbally agreed on what would happen in the event of nor going ahead with the sale.

    Few days after we received Authority to exchange from htb, we found out that the developers have changed the location of the car park driveway. So we decided to pull out of purchase before the contract exchange date. So nothing was signed.

    Now the developers have sent me an invoice asking to pay £4000 for all the extras that have been installed which incurs costs on them due to me pulling out of the purchase.

    Can somebody please advice whether I legally owe them anything?

    I feel like I'm being bullied in to this by the developer since the estate agent and the developer has been harassing me regarding costs from the moment i pulled out of the purchase.
Page 4
    • jtm8866
    • By jtm8866 6th Feb 18, 3:13 PM
    • 33 Posts
    • 14 Thanks
    jtm8866
    This is just me, and I don't pretend for one second to know more than your solicitors. But, I agree with you. I wouldn't even bring that into discussions at the moment. The stance should remain. No liability, developer changed terms by moving the location of the driveway, contracts not exchanged. End.


    The whole argument about the developer mitigating their losses is an argument to have further down the line if/when they don't drop their claim.
    Originally posted by Mahsroh
    I cannot agree with you more.
    For some reason, my solicitor came across to me that he is already treating this as a court claim.

    But anyway, I only asked for his suggestion but did not instruct to represent me.
    I am tempted to go with my instinct and just deny all liabilities without any arguments. Period.
    • Mahsroh
    • By Mahsroh 6th Feb 18, 3:21 PM
    • 339 Posts
    • 330 Thanks
    Mahsroh
    For some reason, my solicitor came across to me that he is already treating this as a court claim.
    Originally posted by jtm8866

    That's just a standard solicitor response! Wouldn't read anything into that.
    • Red-Squirrel
    • By Red-Squirrel 6th Feb 18, 11:34 PM
    • 2,787 Posts
    • 7,445 Thanks
    Red-Squirrel
    Why are you using the services of the litigation solicitor? How much is that going to cost you?
    • steampowered
    • By steampowered 7th Feb 18, 9:21 AM
    • 2,594 Posts
    • 2,541 Thanks
    steampowered
    However, they also strongly recommended to ask the question: "What steps has the developer taken to mitigate the loss - such as tried to sell the house with the installed tiles/kitchen worktop, if it is already installed (or) return the tiles/kitchen worktop back to the supplier if some or all the tiles are not installed...".
    Originally posted by jtm8866
    This is a perfectly sensible question to ask, but I think it is premature. Personally I'd sit tight until I'd received a formal letter from the developer.

    It sounds like all you've had so far are ambiguous emails from an estate agent. The estate agent is not authorised to represent the developer in a legal dispute!

    You don't know whether the developer is going to take this forward or not. If the developer does decide to take it forward, you don't know the legal basis of their claim yet.

    Who would you ask the question to anyway? It is pointless asking the estate agent - they are not authorised to give you an answer, they are not the developer's solicitors. You'd have to ask the developer directly, and if you haven't been in touch with the developer directly I don't think you should start now.

    I am worried that asking this question will indirectly mean that I am accepting the loss, if any.
    This is not something to be worried about. It is perfectly normal to raise different alternative arguments in court proceedings.

    For example, you could argue that you weren't in breach of contract so aren't liable for anything. You could also argue that, in case the court decides that you were in breach of contract, the claimant still shouldn't be awarded the full amount it is requesting (e.g. because its failed to mitigate its loss).
    • jtm8866
    • By jtm8866 7th Feb 18, 12:41 PM
    • 33 Posts
    • 14 Thanks
    jtm8866
    This is a perfectly sensible question to ask, but I think it is premature. Personally I'd sit tight until I'd received a formal letter from the developer.

    It sounds like all you've had so far are ambiguous emails from an estate agent. The estate agent is not authorised to represent the developer in a legal dispute!

    You don't know whether the developer is going to take this forward or not. If the developer does decide to take it forward, you don't know the legal basis of their claim yet.

    Who would you ask the question to anyway? It is pointless asking the estate agent - they are not authorised to give you an answer, they are not the developer's solicitors. You'd have to ask the developer directly, and if you haven't been in touch with the developer directly I don't think you should start now.


    This is not something to be worried about. It is perfectly normal to raise different alternative arguments in court proceedings.

    For example, you could argue that you weren't in breach of contract so aren't liable for anything. You could also argue that, in case the court decides that you were in breach of contract, the claimant still shouldn't be awarded the full amount it is requesting (e.g. because its failed to mitigate its loss).
    Originally posted by steampowered
    The invoice for £4k was sent to me by the developer, not the estate agent. Here is the letter from the developer.

    "Further to your email below; please find attached your invoice in relation to our costs pursuant to your withdrawal from the purchase of Plot xxxx.

    We are holding £500 on deposit. Please arrange for payment of the outstanding sum of to be paid to our account by return. Account details are included on the invoice."

    The invoice attached has cost breakdown as:
    Tiles £ 1,164.91
    Tile fitting cost £ 1,077.12
    Worktop cost £ 417
    Worktop fitting cost £ 275
    Removal cost £ 586.81
    Sub-Total £ 3,520.84
    VAT £ 704.17

    Total Amount Outstanding £ 4,225.01"


    Although estate agent was harassing me with non-sensical emails, they have stopped doing this a week ago saying that they are going to ask the developers' solicitors to get the money reimbursed from me. The letter I received with attached invoice was from the developer itself but not their solicitor.
    • jtm8866
    • By jtm8866 7th Feb 18, 12:43 PM
    • 33 Posts
    • 14 Thanks
    jtm8866
    Why are you using the services of the litigation solicitor? How much is that going to cost you?
    Originally posted by Red-Squirrel
    I am not, I only asked for their suggestion over phone and instructed them not to represent me in this case.
    • steampowered
    • By steampowered 7th Feb 18, 1:12 PM
    • 2,594 Posts
    • 2,541 Thanks
    steampowered
    The invoice for £4k was sent to me by the developer, not the estate agent. Here is the letter from the developer.

    Although estate agent was harassing me with non-sensical emails, they have stopped doing this a week ago saying that they are going to ask the developers' solicitors to get the money reimbursed from me. The letter I received with attached invoice was from the developer itself but not their solicitor.
    Originally posted by jtm8866
    I see. Although the invoice has come from the developer, they still haven't provided any explanation of the legal basis on which they are claiming money from you.

    I would reply simply explaining that you haven't exchanged contracts and have not agreed to pay this money. Tell them that, if they believe this money is owed, they need to explain the legal basis on which they are claiming money and provide a copy of the contract they are relying on.

    It is for the Claimant to articulate their case, so personally I wouldn't get into a discussion about a second-level point such as mitigation of loss until the developer has provided at least some basic details.
    • jtm8866
    • By jtm8866 7th Feb 18, 1:25 PM
    • 33 Posts
    • 14 Thanks
    jtm8866
    I see. Although the invoice has come from the developer, they still haven't provided any explanation of the legal basis on which they are claiming money from you.

    I would reply simply explaining that you haven't exchanged contracts and have not agreed to pay this money. Tell them that, if they believe this money is owed, they need to explain the legal basis on which they are claiming money and provide a copy of the contract they are relying on.

    It is for the Claimant to articulate their case, so personally I wouldn't get into a discussion about a second-level point such as mitigation of loss until the developer has provided at least some basic details.
    Originally posted by steampowered
    Yea, you are spot on.
    The only explanation they have given is, " ...invoice in relation to our costs pursuant to your withdrawal from the purchase of Plot".
    Not good enough.
    I will draft a response today and we'll see what happens.
    Thanks
    • Senseicads
    • By Senseicads 7th Feb 18, 2:57 PM
    • 112 Posts
    • 58 Thanks
    Senseicads
    Although I feel that by doing nothing you are accepting that you have lost your £500 refundable deposit? it'd be nice to get that back too
    • hammy1988
    • By hammy1988 7th Feb 18, 5:51 PM
    • 135 Posts
    • 88 Thanks
    hammy1988
    Are you with Linden Homes? We were definitely told that if we paid for extras, then charges would occur if we pulled out and they had been installed. We also were shown the Architect plans a week or so after putting down our £500 reservation fee.

    Maybe we were lucky and had a sales rep who made it clear, and I scrutinised all my paperwork, you really should have clarified if you were unsure.

    Sounds like you really did pull out last minute, one of the benefits of having a new build is that you can choose your styles and fixtures and fittings. The developer only has the choice now of selling the house you were interested in with everything you chose at a reduced price for a potential buyer, or rip it all out and start over.

    Both ways they have lost money.

    *readding something I just remembered. You only were given leaveway on the fees incurred if your help to buy or mortgage fell through.
    Last edited by hammy1988; 07-02-2018 at 5:53 PM.
    • pinkshoes
    • By pinkshoes 7th Feb 18, 6:22 PM
    • 15,785 Posts
    • 21,687 Thanks
    pinkshoes
    My parents viewed a new build that actually had a higher price due to a higher spec of kitchen etc...

    I very much doubt that they will remove them unless they are hideous!

    I'd be pushing for the £500 to be returned too. Less a readvertising cost obviously...
    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!)
    • smem18
    • By smem18 8th Feb 18, 11:28 AM
    • 55 Posts
    • 43 Thanks
    smem18
    I think you received some really harsh replies at the start of this thread.

    I really think it is the developers fault if they install bespoke options (whether standard/free options or optional extras) before you have exchanged. That is a risk they took before you became legally obliged to purchase the property. I really don't think they have a leg to stand on, particularly because they did not ask you to sign anything stating you accepted liability for the costs should you pull out before exchange.

    I'm not an expert, but I think the only possible way they could reclaim the cost in court would be to prove they have suffered a financial loss as a result of your actions. So they would have to prove that other potential buyers have refused the property because of the options you chose or that they had to change all/some of the options. But even then, I really can't see them being able to charge you because of my previous point about them taking a risk on installing these extras.

    I agree that it would be interesting to send a friend in as a "mole" to express interest in that property and just see what they say about it!

    But my opinion is definitely don't pay! If it goes to court, fine. At least you know an impartial judge has then made the call regarding who is right/wrong.
    • jtm8866
    • By jtm8866 8th Feb 18, 5:23 PM
    • 33 Posts
    • 14 Thanks
    jtm8866
    Are you with Linden Homes? We were definitely told that if we paid for extras, then charges would occur if we pulled out and they had been installed. We also were shown the Architect plans a week or so after putting down our £500 reservation fee.

    Maybe we were lucky and had a sales rep who made it clear, and I scrutinised all my paperwork, you really should have clarified if you were unsure.

    Sounds like you really did pull out last minute, one of the benefits of having a new build is that you can choose your styles and fixtures and fittings. The developer only has the choice now of selling the house you were interested in with everything you chose at a reduced price for a potential buyer, or rip it all out and start over.

    Both ways they have lost money.

    *readding something I just remembered. You only were given leaveway on the fees incurred if your help to buy or mortgage fell through.
    Originally posted by hammy1988
    The point is that I wasn't asked to pay for extras until after contract exchange. I asked this question specifically and the answer from estate agent was that I can include in the house price (which means I have to amend mortgage which was not an option for me) or pay on or after contract exchange. Obviously I did not know or plan for pulling out at that stage, so assumed no more questions on this matter necessary.

    Moreover, their invoice also cover the cost for standard/free items as well just because I chose one particular colour for that item (kitchen worktop).
    • jtm8866
    • By jtm8866 8th Feb 18, 5:31 PM
    • 33 Posts
    • 14 Thanks
    jtm8866
    I think you received some really harsh replies at the start of this thread.

    I really think it is the developers fault if they install bespoke options (whether standard/free options or optional extras) before you have exchanged. That is a risk they took before you became legally obliged to purchase the property. I really don't think they have a leg to stand on, particularly because they did not ask you to sign anything stating you accepted liability for the costs should you pull out before exchange.

    I'm not an expert, but I think the only possible way they could reclaim the cost in court would be to prove they have suffered a financial loss as a result of your actions. So they would have to prove that other potential buyers have refused the property because of the options you chose or that they had to change all/some of the options. But even then, I really can't see them being able to charge you because of my previous point about them taking a risk on installing these extras.

    I agree that it would be interesting to send a friend in as a "mole" to express interest in that property and just see what they say about it!

    But my opinion is definitely don't pay! If it goes to court, fine. At least you know an impartial judge has then made the call regarding who is right/wrong.
    Originally posted by smem18
    Thanks.
    That's the plan. Happy to face this in small claims court, if it gets there.
    • jtm8866
    • By jtm8866 8th Feb 18, 5:38 PM
    • 33 Posts
    • 14 Thanks
    jtm8866

    *readding something I just remembered. You only were given leaveway on the fees incurred if your help to buy or mortgage fell through.
    Originally posted by hammy1988
    I am Help to buy applicant, so what does this mean?
    • Nicola83
    • By Nicola83 8th Feb 18, 8:43 PM
    • 51 Posts
    • 35 Thanks
    Nicola83
    I'm no expert but I'd agree with the majority on here that you don't owe them anything. The speel they're spinning you about having to rip it all out for a different buyer is rubbish.
    We're in the process of buying a new build, we're due to exchange in the next few days and we only got to pick our flooring. Our tiles and kitchen worktop/cupboards had already been picked by their interior designer. There's 2 plots either side of us that haven't been sold yet and they are due for completion the same time as ours. They are fully tiled with a fully fitted kitchen. I don't know how high in demand the development is where you were planning to buy, but I'm pretty sure they'll be able to sell it with the fixtures and fittings you picked. If anything, they could put the price up for the new buyers because of the additional fittings.
    Stick to your instincts and do nothing.
    • steampowered
    • By steampowered 8th Feb 18, 10:29 PM
    • 2,594 Posts
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    steampowered
    Are you with Linden Homes? We were definitely told that if we paid for extras, then charges would occur if we pulled out and they had been installed.
    Originally posted by hammy1988
    Fair enough, but if Linden Homes want to be able to charge for things, then that should be explained in the contract the Op would have been asked to sign. I don't think they can validly charge for things if that is not agreed in the contract.
    • gettingtheresometime
    • By gettingtheresometime 8th Feb 18, 10:50 PM
    • 3,721 Posts
    • 9,225 Thanks
    gettingtheresometime

    At this point I received feedback from both estate agent and the developer that they both were surprised about the driveway positioning. They were not aware of this change as well.

    So effectively I, my wife, the estate agent and the developer were all under the impression that the driveway is being built in the front of the house as originally planned. As I heard from the estate agent, the architect choose to change this plan without advising anybody. This is the email extract from the estate agent: "Evidently the architect changed the plan slightly recently and nobody was informed."

    .
    Originally posted by jtm8866
    This is complete BS.

    Working in a consulting engineers I know that architects wonít change layouts willy nilly as this has major implications for others in the design team.

    What I donít understand though is if you were unsure as to whether you wanted to proceed, why resend the extra list when asked. Why not simply say that you need to think whether the purchase was going to proceed or not?
    Lloyds OD / Natwest OD / PO CC / Wescott / Argos Card cleared thanks to the 1 debt v 100 day challenge


    Next on the list - JD Williams
    • jtm8866
    • By jtm8866 9th Feb 18, 12:11 AM
    • 33 Posts
    • 14 Thanks
    jtm8866
    This is complete BS.

    What I donít understand though is if you were unsure as to whether you wanted to proceed, why resend the extra list when asked. Why not simply say that you need to think whether the purchase was going to proceed or not?
    Originally posted by gettingtheresometime
    Firstly, I thought they never received it in the first place, so I resent it as an admin task.

    Secondly, we didn't make the decision of pulling out at that time since I haven't consulted with my wife and haven't visited the site together yet. She just came back from her vacation and only after later that week when we visited the site together, we realised how much the side garden has been cut short because of the driveway. It disappointed her more that it did me. The decision was then made with heavy heart of knowing that we are going to lose £1.5k which we have already paid as legal and other fees at that time.

    So effectively, when I resent the extra list I was not convinced that we were going to pull out. It was a big hard decision which took a while and mostly a firm rejection from my wife.
    • Megadebtor
    • By Megadebtor 9th Feb 18, 12:14 AM
    • 24 Posts
    • 124 Thanks
    Megadebtor
    Actually they can and they do. Depends on the size of the development obviously to weigh up any 'repercussions ' but it's quite common for architects/developers to submit non material, minor material or material amendments.
    Debt: Absolutely Mega (six figures)



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