Property deal going wrong!!!
Discussion
We have recently purchased some land with a part built house on ther.
We bought this from the builder (whom we also have a build contract with)- he will finish the house by March.
We exchanged on the land a week ago after being somewhat hassled to do so and he has mentioned before that the bank are on his back a bit.
On Friday he kicks off to his solicitor that the deposit paid is held with them and not going to him.
To keep it brief, he called me Friday night, agreed that this was normal and that we had not discussed him having the 10% deposit and that our solicitor has advised us if he went bust we would lose this. The entire agreement/s were always based on 10% dep for land now and full settlement of both land and build in March.
He then decided to tell me if the 10% was not IN HIS ACCOUNT i cleared funds today that he would walk off site and we are stuffed as we are legally bound to buy the land now we have exchanged.
So, on one hand we're stuffed but on the other if there is no house by March we can sue him under the build contract. The irony is that had we discussed this prior to the exchange (when I trusted him) I would have gladly let him have it. But after threats to walk off etc I have lost complete faith.
Bit of a knightmare, its also putting me off the house, any thoughts/advice appreciated.
We bought this from the builder (whom we also have a build contract with)- he will finish the house by March.
We exchanged on the land a week ago after being somewhat hassled to do so and he has mentioned before that the bank are on his back a bit.
On Friday he kicks off to his solicitor that the deposit paid is held with them and not going to him.
To keep it brief, he called me Friday night, agreed that this was normal and that we had not discussed him having the 10% deposit and that our solicitor has advised us if he went bust we would lose this. The entire agreement/s were always based on 10% dep for land now and full settlement of both land and build in March.
He then decided to tell me if the 10% was not IN HIS ACCOUNT i cleared funds today that he would walk off site and we are stuffed as we are legally bound to buy the land now we have exchanged.
So, on one hand we're stuffed but on the other if there is no house by March we can sue him under the build contract. The irony is that had we discussed this prior to the exchange (when I trusted him) I would have gladly let him have it. But after threats to walk off etc I have lost complete faith.
Bit of a knightmare, its also putting me off the house, any thoughts/advice appreciated.
The builder is clearly short of cash and needs the 10% deposit to fund his business. Rightly the money is held by your solicitor as it would seem likely that before completion of the house this guy would need more money or be bankrupt.
If you've exchanged contracts for the purchase of the land only and there is no linkage to the house build contract then why not complete on the purchase of the land; the builder gets 100% so has funds and if he then fails to complete the build contract he'll be in breach and you should have recourse to appoint alternative contractors.
ETA: welcome to the world of dealing with builders!
If you've exchanged contracts for the purchase of the land only and there is no linkage to the house build contract then why not complete on the purchase of the land; the builder gets 100% so has funds and if he then fails to complete the build contract he'll be in breach and you should have recourse to appoint alternative contractors.
ETA: welcome to the world of dealing with builders!
Edited by caiss4 on Tuesday 26th August 11:55
I have thought that - but this was not the deal we agreed and principally he's back tracking and thats wrong.
Ironically the deal has been structured his way from the start, he asked me 2 weeks ago if we could complete and instead of paying barclays interest he would pay me by way of reducing the build contract amount 5k or so. I agreed, next day he said his solicitor advised him not to??
I feel we have jumped through hoops from the start but he thinks he's doing us a favour - which is not how we feel. We cant sell our current house, prices have dropped all round etc and we only chipped him 10k off asking!
Whilst I understand were we are at legally I dont like being threatened and have lost faith in him. He tells me his a straight - I could'nt disagree more!
I run a business succesfully and I'm a man of my word, but more to the point I read my contracts personally before signing, which he admitted he had not done. Its the unreasonable behavior thats buging me, if he called me now with an apology things may be different but I'm not holding my breath!
Ironically the deal has been structured his way from the start, he asked me 2 weeks ago if we could complete and instead of paying barclays interest he would pay me by way of reducing the build contract amount 5k or so. I agreed, next day he said his solicitor advised him not to??
I feel we have jumped through hoops from the start but he thinks he's doing us a favour - which is not how we feel. We cant sell our current house, prices have dropped all round etc and we only chipped him 10k off asking!
Whilst I understand were we are at legally I dont like being threatened and have lost faith in him. He tells me his a straight - I could'nt disagree more!
I run a business succesfully and I'm a man of my word, but more to the point I read my contracts personally before signing, which he admitted he had not done. Its the unreasonable behavior thats buging me, if he called me now with an apology things may be different but I'm not holding my breath!
Edited by Leondrums on Tuesday 26th August 12:11
Obviously there is something in the detail here that I can't see but it is blatantly clear he needs to raise some cash. If he is at his credit limits then the next stop sell assets or bankruptcy.
There must be some particular reasons why completion on the land sale cannot go ahead but it would seem the only way out to me.
I bought a new house 2 years ago. Builder seemed kosher, asked for a £1000 non-refundable deposit to take the property off the market (even though it wasn't finished)and when I requested a few mods he wanted me to immediately fund the changes on the basis that if I failed to complete then he'd have to pay to return the house to plan. We're not talking mega-bucks here, around £4k, but I refused having already purchased a wood-burner for the house that had been delivered. (This was my warning - he refused to order it even though it was a long lead item and I realised he was not credit worthy)
Cut a long story short I reached the point of pulling out and threatening to sue him for the deposit via his estate agent and then suggested that the estate agent cover his bills - which they did so the deal closed. Only after moving in did we find we weren't connected to the mains water supply.......
There must be some particular reasons why completion on the land sale cannot go ahead but it would seem the only way out to me.
I bought a new house 2 years ago. Builder seemed kosher, asked for a £1000 non-refundable deposit to take the property off the market (even though it wasn't finished)and when I requested a few mods he wanted me to immediately fund the changes on the basis that if I failed to complete then he'd have to pay to return the house to plan. We're not talking mega-bucks here, around £4k, but I refused having already purchased a wood-burner for the house that had been delivered. (This was my warning - he refused to order it even though it was a long lead item and I realised he was not credit worthy)
Cut a long story short I reached the point of pulling out and threatening to sue him for the deposit via his estate agent and then suggested that the estate agent cover his bills - which they did so the deal closed. Only after moving in did we find we weren't connected to the mains water supply.......
Nothing stopping us completing, it's purely down to principle as that is not what we had agreed (we have'nt sold our current house and the interest on my money equates to £7000 which is not to be sniffed at. We thought we were buying an advertised house and then the deal changed to land and build.
No connected to water? Did he not have the building signed off by a building inspector before you moved in? I take it he was a 'small independent'?
How did you get on with the relationship after the initial blip ie fixtures fittings discussions etc?
No connected to water? Did he not have the building signed off by a building inspector before you moved in? I take it he was a 'small independent'?
How did you get on with the relationship after the initial blip ie fixtures fittings discussions etc?
Ok, understood. Then it comes down to how much you want the place but I wouldn't part with any cash unless I was getting an asset in return. You're in a fairly strong position (I didn't realise how strong my position was) as in the current climate he probably doesn't want to lose the sale.
As for my water, well he'd tapped in to a farmer's supply in the field next door for building water and then conveniently forgot to get the local water company to do a proper connection. The water pipe was hidden in undergrowth and he personally escorted the building inspector around the site the day before we moved in!
It took 5 months and a great deal of effort to get him to foot the £11000 bill for the connection. Fortunately he did and then went out of business 6 months later.
As for my water, well he'd tapped in to a farmer's supply in the field next door for building water and then conveniently forgot to get the local water company to do a proper connection. The water pipe was hidden in undergrowth and he personally escorted the building inspector around the site the day before we moved in!
It took 5 months and a great deal of effort to get him to foot the £11000 bill for the connection. Fortunately he did and then went out of business 6 months later.
Some justice gained then!!
The bigest headache we have is that the house is only up to first floor, need first floor walls, interior blockwork, roof etc etc. But we have exchanged at a price a little over what we feel it is worth today. 4 weeks time the roof should have been on and this would have been worth it.
We really dont want to be employing other builders ourselves etc, and we feel this would be more costly at this stage than his current deal. A big part of the problem is we feel we were buying a house as advertised and he's structured the land urchase/build contract because it suits him - no benefit to us. I wanted to put £5k deposit down and purchase as normal in March.
No call today as yet from him and his solicitors are not returning my sols calls so far. To top it all off my dad was rushed into hospital on Friday (very serious) and is still there due to have major surgery today/tomorrow.
You live and learn I suppose, I'll never put my faith in someone again when it comes to 'my word is gospel'.
The bigest headache we have is that the house is only up to first floor, need first floor walls, interior blockwork, roof etc etc. But we have exchanged at a price a little over what we feel it is worth today. 4 weeks time the roof should have been on and this would have been worth it.
We really dont want to be employing other builders ourselves etc, and we feel this would be more costly at this stage than his current deal. A big part of the problem is we feel we were buying a house as advertised and he's structured the land urchase/build contract because it suits him - no benefit to us. I wanted to put £5k deposit down and purchase as normal in March.
No call today as yet from him and his solicitors are not returning my sols calls so far. To top it all off my dad was rushed into hospital on Friday (very serious) and is still there due to have major surgery today/tomorrow.
You live and learn I suppose, I'll never put my faith in someone again when it comes to 'my word is gospel'.
So it seems likely that he wanted that structure to get cash from you early but he also knows that if you haven't sold then cash will cost you money. It's also possible that your cash would fund his other activities and not your build.
Based on my experience unless I was absolutely emotionally committed to the property I would tell the builder you're pulling out. I think you'd find this was the thin end of the wedge; there would be many more cash issues and probably lots of bodging. His recourse is to sue for damages for breach of contract but to be honest I don't really think he could come up with any legitimate damages that would apply. You need your solicitor's advice before suggesting this course of action. Also I doubt whether he would have the time or inclination to pursue and I'd counter sue anyway.
Hope your father recovers asap.
As for putting faith in someone's word then I think you can use judgement for all but builders - apologies to all builders who keep their word!
Based on my experience unless I was absolutely emotionally committed to the property I would tell the builder you're pulling out. I think you'd find this was the thin end of the wedge; there would be many more cash issues and probably lots of bodging. His recourse is to sue for damages for breach of contract but to be honest I don't really think he could come up with any legitimate damages that would apply. You need your solicitor's advice before suggesting this course of action. Also I doubt whether he would have the time or inclination to pursue and I'd counter sue anyway.
Hope your father recovers asap.
As for putting faith in someone's word then I think you can use judgement for all but builders - apologies to all builders who keep their word!
Ask your solicitor. If your builder has threatened to walk off site and this is his documented position then there are grounds for breach on his side. I don't believe that the builder is automatically entitled to the whole deposit. He'd have to sue and justify direct loss not consequential loss as a result of you pulling out.
Once again discuss with your solicitor; this is what you pay him for.
Once again discuss with your solicitor; this is what you pay him for.
Leondrums said:
But wouldnt we lose our £25k deposit if we pulled out?
To be honest, it sounds like your solicitor could extract you very simply from any contract as it is not being or going to be honored.Edited by Leondrums on Tuesday 26th August 13:46
I kind of think that you have him over a barrel as he has showed you his cards.
If it were me, I'd walk away. Buyers market, any seller who buggers you around should be ditched instantly. Especially if you are relying on him to finish building your house to a standard which will be habitable over the next 20 years!!!
Besides, sounds like you'll pick the whole thing up at auction for a fraction of the cost later in the year.
Just heard,
The builder wants to carry on at the original terms, dont quite know how we feel about it as we're really quite angry, but he does'nt have any money from us and at least if we're obliged to buy the land (as he has'nt broken any contract yet) then in a month there should be a roof.....
Just need these 6mths to fly by and pray all is well at the other end.
The builder wants to carry on at the original terms, dont quite know how we feel about it as we're really quite angry, but he does'nt have any money from us and at least if we're obliged to buy the land (as he has'nt broken any contract yet) then in a month there should be a roof.....
Just need these 6mths to fly by and pray all is well at the other end.
Let's hope he does not cut corners (he will).
My grand parents had their "dream bungalow" built a few years ago, cost them 450k. They sold their place in Windlesham far too cheap, and moved up to Linton for better health care. The builders cut corners everywhere. Cracks are appearing all over the place, the flooring was terrible, it needed about 30k spent on it when he moved in!
They used cheap materials where ever possible, and I think he regrets moving from his previous, fantasticly built house.
My grand parents had their "dream bungalow" built a few years ago, cost them 450k. They sold their place in Windlesham far too cheap, and moved up to Linton for better health care. The builders cut corners everywhere. Cracks are appearing all over the place, the flooring was terrible, it needed about 30k spent on it when he moved in!
They used cheap materials where ever possible, and I think he regrets moving from his previous, fantasticly built house.
Walk away NOW. Call your solicitor (the one holding the money).
Tell them you want out.
Have them write threatening letter re: terms of the contract.
TRhe fact is, you and builder had a contract and he is now trying to deviate from that.
A decent lawyer will f
k him right off.
Walk away, litigate, find somewhere better to put your money.
Tell them you want out.
Have them write threatening letter re: terms of the contract.
TRhe fact is, you and builder had a contract and he is now trying to deviate from that.
A decent lawyer will f
k him right off.Walk away, litigate, find somewhere better to put your money.
If your contingency for him going "pop" is to carry on with the work yourself or subcontract to others, this can cause problems with the NHBC/ZURICH/PREM GUARANTEES etc, make sure the building is signed off to date by the relevant company otherwise a takeover can take time and cost quite alot.
Whole thing does smell a bit fishy, I suspect the builder has just panicked and stupidly tried to pressure you into releasing some money to ease his cash flow.
Hope you sort it out, keep your eye on him.
Whole thing does smell a bit fishy, I suspect the builder has just panicked and stupidly tried to pressure you into releasing some money to ease his cash flow.
Hope you sort it out, keep your eye on him.
I think you're right. We are continuing as per original plan as making threats and trying to follow them through is a headache we all dont need. We have had some excellent references and seen a few of his builds, all to a very high standard.
He is a nice bloke under neath it all, but he's very much 'it'll be alright' and not really paper oriantated.
I think he's under a little pressure and panicked as you said and taken it out on us, or tried to force the issue thinking we'd roll over. Friday was my first 'firm chat' with him and hopefully he'll respect us a little more for that and realised we're not wet behind the ears.
He has 4 devolopments, he's sold 3, so I cant see quite what the problem is, other than he says he's selling them at cost. Probably a little bitter that he's effectively working for nowt (which I dont believe anyway!).
We've sent an email highlighting our views/making our point and asked for a meet. Once that is out of the way hopefully we can all move on.
We'll be keeping a very close eye on it all.
He is a nice bloke under neath it all, but he's very much 'it'll be alright' and not really paper oriantated.
I think he's under a little pressure and panicked as you said and taken it out on us, or tried to force the issue thinking we'd roll over. Friday was my first 'firm chat' with him and hopefully he'll respect us a little more for that and realised we're not wet behind the ears.
He has 4 devolopments, he's sold 3, so I cant see quite what the problem is, other than he says he's selling them at cost. Probably a little bitter that he's effectively working for nowt (which I dont believe anyway!).
We've sent an email highlighting our views/making our point and asked for a meet. Once that is out of the way hopefully we can all move on.
We'll be keeping a very close eye on it all.
Edited by Leondrums on Wednesday 27th August 13:22
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