Only just found this thread

I'm due to complete this week on a flat I put the deposit on in Dec 05. Same story - 10% deposit down, have the 5% I expected I needed but can only get a 75% mortgage. Developer doesn't want to consider any options and wouldn't even consider loaning me the remaining 10% (£12K). Originally I had expected to completed mid-07 when I probably could have sold shares to cover the difference. However, the stock market crash has now rendered these almost worthless.

Hence I have that awful feeling in my stomach of wondering what to do which I can't seem to forget even for a moment.

I had thought that losing my deposit was the best case scenario but am wondering whether the significant delay could work in my favour and even allow me to sue for my deposit back. However, the ridiculous expense of lawyers means I certainly don't want (or rather can't) to throw more money at this.

I'll keep posting on here if there is a desire to watch this unfold.

Same here still waiting for an outcome, the flats are only just getting the foundation down so it will be quite some time before i get an outcome.

My position is i simple cannot complete, my only question is how i will fair off? obviously my deposits lost, but im told they could put an order on my home if i sell it in the future, as there is no equity as of yet.

will let you know.

Let us know how you get on with completion, I am due to complete in next few months and Developer is refusing to do anything. Thye just say you will loose deposit and we will sue for the difference...... I have offered alternatives inc an equity share but nothing.... is there a website with other peoples positions as Ibet there are loads of people in this situation...

Yes - I am in the same position and can not find anyone who has actually been sued. Have now passed the completion date and have had no correpondence. I am in contact with several people from the same apartment development and all have found the same.

Would love to hear from someone who has got beyond this - there must be someone out there? If they had been sued surely they would be kicking up a stink. Perhaps they are just so relieved not to have been taken to the cleaners that they just want to keep quiet.

The point about suing someone for damages is to recover your loss and costs, in order for this to happen the developer has to be able to illustrate and prove beyond doubt that they have or will actually incur the loss and also show how much financial loss, (if any) the breach of contract has or will realistically cost them. Then they would seek compensation to recover that loss, It's not always wise or advisable for them to sue an individual particularly if the case may backfire on the developer and they may be faced with the legal costs of losing the case. ....As per my posting on the first page of this thread.

How could a developer possibly show in these recent one off uncertain times and uncontrollable market conditions, such as the current market drop, that this loss has been caused by the prospective buyer not proceeding with the purchase of what has now become a grossly overpriced property, caused through no fault of the buyer not being able to proceed.?

This loss is not a realistic loss because the developer would not be able to sell this property at this overpriced amount to any other prospective purchaser, therefore it is not a loss caused wholly or attributable to the buyer not being able to proceed at an over-inflated price, which no one could "reasonably" have envisaged or expected at the time........the courts would see this straight away and in my opinion would think the loss of the 10% deposit was in itself more than a high enough financial penalty, without ordering any other kind of forfeit. !

Hi Phyllis

Which development did you buy in? What was the purchase price and the current value of the property? How long has it been since you passed the completion date. Did you not even receive a letter saying that daily interest will be charged until you complete?

I have spoken to several solicitors and brokers regarding this today. A good lawyer friend of mine thinks that although there are not many people who have been sued until now, that will all change. In the previous rising market developers would not take things further since they would be selling for an even greater profit. But as these properties are now being valued at 30% below the purchase prices the developers are expected to pull all stops to recover the money. After they are commercial organisations and are answerable to shareholders. At present there is no case law which can prevent them from sueing an individual for losses they incur, but as this issue begins to develop more media attention, I am sure such a case law will emerge.

Having said that I spoke to my developer today, and was told that if I didnt complete I would lose my deposit. She also said that their solicitors "may" pursue me for additional costs, but did not say they will for sure. Its all mind games I guess. Bu phyllis if they have not contacted you and are off your back that is great news. I guess the only worrying thing for me if I was in that situation is that unless I have a terminatino of contract in writing I would lose sleep. Apparently a vendor can sue for breach of contract for upto 6 years so I think its really important to get something in writing to confirm that a contract is terminated.

Hi... the only difference with my situation and most of the others that i've read on this forum is that rather than forking out for a 10% deposit I decided to pay about £1500 for an Exchange Bond to avoid tying up the monies for 18 months. The property company that sold me this apartment also charged a finders fee of 2%. I have actually spoken to the property company about my concerns about completing and pushed the question about not completing and although the response was vague ,it was implied that if just a small percentage don't manage to complete the builders wouldn't be too bothered but if a higher percentage don't then they might be forced to charge for the difference in price. I have also had some independent advice from a property lawyer that i might use if it comes to the crunch... and he said that in my situation where a property company has taken a fairly hefty fee off me, they would be partly liable and would have to share some of the blame in these sort of situations ... actually to this company's credit they seem to trying to make it work ( its in there interest right!)and are negotiating with the builders on our behalf trying to get the price down to levels in line with current valuations and are also offering some sort of bridging finance to help with the greater deposit (ie. 25% instead of 15%).. So i will see how all this unfolds whether the cash flow (finance costs / rental income) is possible and way up also the amount I have already poured in. Not sure how I stand with the situation where the Exchange Bond company paid the deposit though? Mmme what a mess!!

I understand where you're coming from, but I think your second paragraph is actually the opposite of what the developer has to establish.

The purchaser has contracted to pay the developer X. The purchaser withdraws and the develoepr can only achieve X-30%. That 30% is the develepor's loss, and it's quite clear. The notion that the purchaser can seek to assert that the changing market conditions is a force majeure that serves to excuse their failure to complete the contract is, I'd suggest, a little novel.It's not impossible to imagine it happening, especially if the judge is chanelling the spirit of Lord Denning that day, but I wouldn't bet more than a small pot of my beer tokens on it, since it's a moral argument, and morals and contract law are only tangentially related.

The notion that the purchaser could not reasonably have been expected to foresee the changing market conditions is probably a better argument for someone buying to occupy to make, than for someone buying to let, since purchasers buying by way of business would probably be expected to pass a higher test of their competence and foresight. A purchaser to occupy would probably have more chance of succeeding by attacking the advice received as well.

We're starting to see large numbers of flats in some developments going to auction and I have wondered if the motive is developers wanting to demonstrate to the courts that they've made the best effort to get the best price before going back to pursue purchasers on broken contracts. As in all things that means the developers will be making an assessment of who's worth suing.

I spoke to a mortgage broker today and he advised he had been stuggeling to get the numbers to add up and complete for a few people as the valuations were coming in so low (£100k lower in some cases). I know for me, I am expecting the valuations to come in low and I just cannot make the numbers work. I asked the developer if they would maybe take a shared equity arrangment..... how about they make up the shortfall of say 25% by way of a second charge on the property that would need to be paid back in 10 years say. I noticed some developers are offering this to get things moving, but the developer I spoke to just said NO.

Is there some form of website where other people are in the same situation and could then speak to the developer collectively ?

can everybody just say which developer they have bought from, and in which development. Has anybody bought from Telford Homes?

I bought on the Spectrum development in Manchester (Dandara). My completion date has passed (23/12/09) and I have since received 2 letters from their legal team. The most recent received today from my conveyancer included the following paragraph:

'If we do not hear from you within the next seven days confirming that your client is prepared to complete the transaction forthwith then we are instructed to issue court proceedings for specific performance and since your client can have no defence to such proceedings, we shall apply to the court for summary judgement as soon as the proceedings are served.'

I would be grateful if anyone can shed some light on the meaning of this paragraph.

Thank you.

It means you contracted to do something, which you entered into freely and fairly, and because your're not about to make a quick profit doesn't mean you can now change your mind and pull out of a legal contract. The developer will put this case to the judge, and you will lose. It's that simple.

Correct he may lose, however this will likely be the deposit only, in the current economic conditions the judge will not request any other compensation for the purchaser. it simply cant blame the purchaser for the total unforeseen (by joe bloggs) credit crunch etc.

Very worst case is the judge may put an order on the purchasers residential property (if they have one), so that when the markets picks up and if only if they decide to sell the residential home may some of the shortfall go to the developer.

I have not changed my mind and I'm not pulling out because I wont be making a quick profit. Unfortunately like many others I cant get a mortgage based on the price exchanged on 18 months ago. I have explained this to the developer and they are unwilling to renegotiate on price.

So it looks likely that you wll lose your deposit. The developer has the option to try and sue you in Court for the balance of the purchase price - but as has been mentioned it is unlikely to succeed.