Is this bankruptcy - and should I be worried?

[anonymous-user]

Not sure where to put this so hope it fits in here.

I'm in the process of buying a new house house from a builder although the house is actually in the name of another individual so my contract actually shows this other persons name on the transfer documents. Apparently this is quite common with small developers and not an issue with my solicitor. (I believe the "owner" is the wife of an investor in the developers development because the builder/developer himself was having financial difficulties due to over exposure. The house I am buying is 1 of 2 properties (the other property sold about 2 months ago and the new owners have moved in) which were physically built by the builder although the finance is via the investor). Hope that makes sense!

We've exchanged contracts (did this about 3 weeks ago) and are now awaiting completion in a couple of weeks when the kitchen is finished (I'm organising this as wanted to design something specific).

Now today I got a call from a friend saying that he'd read in the local paper that the developer had gone bust. When I look up the company details online it states that:

Form: TM01 - Ending appointment as Director
APPOINTMENT TERMINATED, DIRECTOR XXXXXXXX (those are my crosses as don't want the name published here)
Filed on: 26 Oct 2011

So the question is, bearing in mind I'm actually buying from another individual and not the developer himself, should I be worried in any way?

I'll talk to the builder tomorrow as I know him well due to dealings over the last few months and I went to the house on Friday where all his guys are doing various last jobs to get the house ready - they are still all working to get the house ready and the kitchen company are installing the kitchen next week. I'm not overly concerned due to the continued work but I'd be interested in the views on here.

Thanks.

[jshell]

Sounds like he's given up/been fired from directorship based on that info and not bankrupt.

[davepoth]

It won't hurt to ask the question. If it's a bit of a dodgy transfer out of the company things could get complex.

[anonymous-user]

jshell said:

Sounds like he's given up/been fired from directorship based on that info and not bankrupt.

I agree although I wonder if that was due to the bankruptcy. My other half has just called to say she's bought a local paper that contains an article confirming the bankruptcy. The builder was a director and the wife a director and Co secretary. Looks like the company is OK but the builder has been declared personally bankrupt so removed himself as a director.

Edited by anonymous-user on Sunday 13th November 13:42

[anonymous-user]

davepoth said:

It won't hurt to ask the question. If it's a bit of a dodgy transfer out of the company things could get complex.

Agreed. I'm talking to him and my solicitor in the morning.

[anonymous-user]

If you're buying from the wife of the investor and she is the legal owner of the property and there is no lien on it (something your solicitor should already have established) then I'm guessing you should be allright. If the builder is bust maybe he won't finish the kitchen but if the contract says kitchen to be finished you could reduce your final cash payment commensurately?

[MOTORVATOR]

Check any bankruptcy / disqualification yourself.

http://www.bis.gov.uk/insolvency.

Those things aren't a secret.

[anonymous-user]

unrepentant said:

If you're buying from the wife of the investor and she is the legal owner of the property and there is no lien on it (something your solicitor should already have established) then I'm guessing you should be allright. If the builder is bust maybe he won't finish the kitchen but if the contract says kitchen to be finished you could reduce your final cash payment commensurately?

I'm actually paying the kitchen company company directly myself. They are a local company known to me and have no connection to the builder at all.

As I said, exchange was 3 weeks ago - all checks into title were carried out and satisfactory.

[Deva Link]

garyhun said:

I'm actually paying the kitchen company company directly myself.

Gulp. If anything goes wrong I suppose your solicitor could have a lot to answer for.

The other thing is, what happens about the NHBC 10 year guarantee? I know it's a bit of joke anyway, but if the house had a serious problem, or if you want to sell within 10 yrs, it could come in handy.

[Steffan]

Spent 40 years in Insolvency and Liquidations after qualifying as a Chartered Accountant.

If you have any specific concerns PM me.

There has been shed loads of cases on such events and I have read them all, sad ba====d that I am.

[anonymous-user]

Deva Link said:

garyhun said:

I'm actually paying the kitchen company company directly myself.

Gulp. If anything goes wrong I suppose your solicitor could have a lot to answer for.

The other thing is, what happens about the NHBC 10 year guarantee? I know it's a bit of joke anyway, but if the house had a serious problem, or if you want to sell within 10 yrs, it could come in handy.

Agree with the kitchen - hence why speaking to the solicitor tomorrow but, as we have exchanged and the title was clean, I cannot see this as an issue.

The building company is still solvent and trading (the builder was declared bankrupt as an individual) and the LABC New Build warranty should therefore be unaffected.

Still ... 3 weeks from completion, it's not what I would have wished for!

[anonymous-user]

Steffan said:

Spent 40 years in Insolvency and Liquidations after qualifying as a Chartered Accountant.

If you have any specific concerns PM me.

There has been shed loads of cases on such events and I have read them all, sad ba====d that I am.

Thanks for that Steffan! I'm pretty sure the conversation with my solicitor tomorrow will (hopefully) put any fears I have to rest. As I said, the builder was declared personally bankrupt 19 days ago and I know that since then the build had progressed to near finish as I've been closely monitoring (although I only found out about the bankruptcy this morning).

[Steffan]

garyhun said:

Thanks for that Steffan! I'm pretty sure the conversation with my solicitor tomorrow will (hopefully) put any fears I have to rest. As I said, the builder was declared personally bankrupt 19 days ago and I know that since then the build had progressed to near finish as I've been closely monitoring (although I only found out about the bankruptcy this morning).

This is not an uncommon event particularly in the current housing market. Your solicitor should have answers. I do not see why there should be serious consequences for you, the Law Society term of sale of land are pretty well rested. Good luck

[anonymous-user]

Steffan said:

garyhun said:

Thanks for that Steffan! I'm pretty sure the conversation with my solicitor tomorrow will (hopefully) put any fears I have to rest. As I said, the builder was declared personally bankrupt 19 days ago and I know that since then the build had progressed to near finish as I've been closely monitoring (although I only found out about the bankruptcy this morning).

This is not an uncommon event particularly in the current housing market. Your solicitor should have answers. I do not see why there should be serious consequences for you, the Law Society term of sale of land are pretty well rested. Good luck

Thank you!

[bigbubba]

If his name has only just gone into the paper then he is not yet bankrupt.

The paper declaration is normally just a petition declaration and will not be final until he goes to court and is declared bankrupt.

[anonymous-user]

bigbubba said:

If his name has only just gone into the paper then he is not yet bankrupt.

The paper declaration is normally just a petition declaration and will not be final until he goes to court and is declared bankrupt.

It's confirmed on the insolvency site that bankruptcy has occurred.