Builder messing me around for months on new house

aboutjo1

Hello,

I purchased a house early last year which was to be completed before christmas. The builder was late in completing the house and I had to move house and take another 12 month lease on a rental house. Sure enough eventually my offer loan expired with no sign of completion.

I recieved a call last week that the house is finally ready for snagging. I have re applied for a mortgage now and I'm awaiting approval. All the new developments in the area have dropped their prices with the exception of my builder who is refusing to drop his asking price considering the housing market has collapsed over the past year.

I have a useless solicitor who i have to constantly ring before he will do anything for me. I have requested that he ask the builder to re-negioiate the price of the house and the builders solicitors just keep refusing to respond.

I am really eager to get moving on this and want to know my legal rights. Have i any legal ground to request an answer within a specified time and upon failure to do so demand my deposit back?

The next concern I have is the bank may not value the property at the agreed price I signed. If this is the case what can I do? I am aware that I entered a contract and I'm not trying to back out but feel the builder could meet me somewhere in the middle? Perhaps 10k/20k off considering thats what i spent on rent over the past while.

Please note that i have read some similar threads here of people in the same position as me but mine is slightly different in that i have signed an unconditional contract which my solicitor informs me is not subject to loan approval.

mikemac

There is a very real chance that the bank won't give you all the money you need. They will value the property lower then the builder, and they are probably right.

How much was your desposit?
Was there is anything in your contract about a completion date?
You signed not subject to loan approval? Ok it's not unusual but did your solicitor even advise you when you signed?

What is your solictor doing at all? Threaten them with the sack and you'll go elsewhere but this is a lot of hassle and possibly extra fees.
No excuse for a poor solicitor though

scorpioishere

Next time get the polish buiders as they are more reliable, convenient, flexible, honest and quicker than the laziest one's we have here.

Senna

scorpioishere wrote: »

Next time get the polish buiders as they are more reliable, convenient, flexible, honest and quicker than the laziest one's we have here.

Yeah there was a whole lot of polish developers building estates:rolleyes:

To the op, if you feel your solicitor is not working in your best interest or doing a capable job, you should take your business elsewhere. Look for recommendations from family, friends etc, some of them must have used a good solicitor.
The builders solicitor wont give any reduction at this stage, but if you get your bank to do a valuation and see how much they will lend you, you will have ammunition for a reduction. If the bank puts a lower valuation on the house you can approach the builder with it. Tell them you are willing to complete but your hands are tied by the bank, many builders will be glad to get the sale and wont want the bother of going to court and forcing you to complete at the agreed price.
Best of luck.

aboutjo1

mikemac wrote: »

There is a very real chance that the bank won't give you all the money you need. They will value the property lower then the builder, and they are probably right.

How much was your desposit?
Was there is anything in your contract about a completion date?
You signed not subject to loan approval? Ok it's not unusual but did your solicitor even advise you when you signed?

What is your solictor doing at all? Threaten them with the sack and you'll go elsewhere but this is a lot of hassle and possibly extra fees.
No excuse for a poor solicitor though

The deposit was 15k. Also I paid an additional 5k for a different kitchen to be installed to a kitchen contractor. The contract allowed the builder 18 months to complete which I was advised by my solicitor is the norm.

Yes the solicitor menitioned that it was unconditional but also advised that thats the way most builders operate.

The_Conductor

To be perfectly honest- the depreciation in the value of the house is probably far higher than the 20k you have handed over thus far.

Not completing the property within the contracted timeframe is a breach of contract- and has resulted in your mortgage approval being void. The bank are *not* going to give you the same mortgage they approved you for the first time round.

A rule of thumb is the property is now ~ 25% lower in value than it was when you first contracted to purchase it (this will vary depending on location and other factors- if its in a Dublin feeder town- it may be a good deal higher).

You need to get a new solicitor- your current one appears to seriously have his/her eye off the ball......

whizzbang

Sounds like you got off lightly, I'd say walk away. There are people all over trying to get out of contracts on properties they put a deposit on that are now valued at much less.

kmick

1. Get the house valued by two independant valuers. Don't tell either one what the other one valued it at. Make it clear to both of them you want worse case scenario on value.
2. Write a letter to the builder offering the lower of the two values and include the valuation. Stress to the builder this offer is for 2 weeks only. Also stress that at that time you will revalue the house and make a new offer on that basis.
3. Sit tight while the builder threatens to sue you/beat you up/tear you limb from limb. Ignore any growling from the opposite solicitor and keep repeating the mantra "Accept my offer now or you will have a lower offer in 2 weeks time". Remember that the bank will only offer 85/90% of the value so also emphasise its market value not you determining their offer.

Also
Your solicitor is there to complete legal requirements - they are useless for advice on what you should do so dont expect him/her to be a shoulder to cry on.

Just to let you know I used the tactic above to successfully negotiate 25% off my property. I had to put up with months of idle threats and gruff from the other side. Every two weeks I reduced my offer price by a few thousand until 3 months later they caved and accepted. Happy hunting. The skies the limit on what you can get off at the moment but 20-30% should be your goal.

The_Conductor

I'd suggest doing as kmick says.

I would also contact your bank- they have a list of approved property valuers- make sure the valuations you get done are by firms on their list. They have done major culls of valuers recently- someone who they may have accepted in the past is not necessarily acceptable any longer.......

ZYX

smccarrick wrote: »

I'd suggest doing as kmick says.

I would also contact your bank- they have a list of approved property valuers- make sure the valuations you get done are by firms on their list. They have done major culls of valuers recently- someone who they may have accepted in the past is not necessarily acceptable any longer.......

Why would the builder accept this. He has a contract. He has completed house within required time, why should he accept this kind of ultimatum. Surely it is better to approach the builder in a friendlier manner and explain situation.

The_Conductor

ZYX wrote: »

Why would the builder accept this. He has a contract. He has completed house within required time, why should he accept this kind of ultimatum. Surely it is better to approach the builder in a friendlier manner and explain situation.

No he didn't.
The OP has already had to sign a rental contract for an additional year, due to the builder not completing the house withing the contracted timescale.
The builder has already advised he is unwilling to readjust the price to reflect recent falls- as has happened with other builders in the area. The OP is now unable financially complete the purchase. The builder breached the contract in the first instance by failing to complete the house in the contracted timescale- resulting in 1) additional costs for the OP who has had to rent alternate property and 2) the invalidation of his mortgage approval.

Its past the point of having a friendly chat. Personally I'd consider the 20k paid to date to be a lucky escape and offer to withdraw from the sale on that basis- or- if the OP did want to continue with the purchase- the give the builder an ultimatum- the OP can now borrow x (being 85% of the open market selling price of the property). The maximum he can pay is x + y (y being the 20k handed over todate). It may seem ridiculous- but its simply all the finances he/she can now avail of, full stop.

S.

bobbysands81

aboutjo1 wrote: »

Hello,

I purchased a house early last year which was to be completed before christmas. The builder was late in completing the house and I had to move house and take another 12 month lease on a rental house. Sure enough eventually my offer loan expired with no sign of completion.

I recieved a call last week that the house is finally ready for snagging. I have re applied for a mortgage now and I'm awaiting approval. All the new developments in the area have dropped their prices with the exception of my builder who is refusing to drop his asking price considering the housing market has collapsed over the past year.

I have a useless solicitor who i have to constantly ring before he will do anything for me. I have requested that he ask the builder to re-negioiate the price of the house and the builders solicitors just keep refusing to respond.

I am really eager to get moving on this and want to know my legal rights. Have i any legal ground to request an answer within a specified time and upon failure to do so demand my deposit back?

The next concern I have is the bank may not value the property at the agreed price I signed. If this is the case what can I do? I am aware that I entered a contract and I'm not trying to back out but feel the builder could meet me somewhere in the middle? Perhaps 10k/20k off considering thats what i spent on rent over the past while.

Please note that i have read some similar threads here of people in the same position as me but mine is slightly different in that i have signed an unconditional contract which my solicitor informs me is not subject to loan approval.

Based on my own experiences and things I have heard I actually think you are potentially in quite a good situation at the mo.

There's not a hope in hell that the bank will offer you the same money now that they had already agreed to give you (this leaves you in a very good bargaining position.) As the value of the property has dropped the bank will simply not give you the amount of money they were willing to give you last year. They will revalue the house and offer you 92% (or in the case of some apartments 70/80%).

You can then go back to the builder and say that you originally had an offer from the bank to cover the agreed price but since there was a delay the mortgage offer has ran out and that you had to reapply for a new mortgage. Explain that the bank have revalued the house a lot less than what was originally agreed and that you are willing to proceed with the purchase at the new price (I would be looking for circa 25-30% off the originally agreed price). Also explain that you have no way of making up the difference of the original price and the new price so as to let him know that he's wasting his time going down a legal route. Be very clear that this situation has occured as a result of things that are completely out of your control - the bank won't give you what they said they would because he didn't complete on time and you are merely the innocent victim caught in the middle.

You can then offer a LOT less than originally agreed and the builder should be more than happy to come to a new agreement. Expect to sign confidentiality agreements etc... if this happens.

Do not agree to proceed if the builder wants to keep your deposit and not take it off the new agreed price. Tell the builder you'll take your chances in court if this happens.

In theory you have signed a document stating that you will buy the house for the agreed price so in theory the builder can sue you to complete at the agreed price. However, I have not heard of this actually happening and I have heard of a LOT of people buying properties for a LOT less money by doing the above. One person I know got 130k off by doing the above.

ZYX

smccarrick wrote: »

No he didn't.
The OP has already had to sign a rental contract for an additional year, due to the builder not completing the house withing the contracted timescale.

S.

Maybe the OP could come back in on this but, he said he bought a house last year and that builder had 18 months to complete. I know he said he expected completion before Christmas but the contract gave 18 months.

"The contract allowed the builder 18 months to complete which I was advised by my solicitor is the norm."

bobbysands81

ZYX wrote: »

Maybe the OP could come back in on this but, he said he bought a house last year and that builder had 18 months to complete. I know he said he expected completion before Christmas but the contract gave 18 months.

"The contract allowed the builder 18 months to complete which I was advised by my solicitor is the norm."

Regardless of whether or not this is the case the bank still won't give the OP the money that they would have given him 12 months ago because the value of the property has fallen. If the OP has no way of making up the shortfall then the builder either has to sell at the new lower agreed price or take the OP to court.

I couldn't imagine a builder taking someone to court over this in the current climate.

aboutjo1

ZYX wrote: »

Maybe the OP could come back in on this but, he said he bought a house last year and that builder had 18 months to complete. I know he said he expected completion before Christmas but the contract gave 18 months.

"The contract allowed the builder 18 months to complete which I was advised by my solicitor is the norm."

Folks thanks very much for the great response on this. You are correct in that I did say the contract gave the builder 18 months to complete. 18 months has not passed and the house is ready for snagging now so its me now thats holding up the show as a result of mortgage lapsing.

The house was originally due for completion in Spetember but that didnt happen

aboutjo1

Just a little update. As of Friday my mortgage approval is in place again. The next step is a valuation has to be carried out on the property. Is there any likelihood the valuer will value the property at the same price I purchased for over a year ago?

The_Conductor

aboutjo1 wrote: »

Just a little update. As of Friday my mortgage approval is in place again. The next step is a valuation has to be carried out on the property. Is there any likelihood the valuer will value the property at the same price I purchased for over a year ago?

Precisely zero chance- to be honest.
Do let us know what happens though.

S.

bobbysands81

aboutjo1 wrote: »

Just a little update. As of Friday my mortgage approval is in place again. The next step is a valuation has to be carried out on the property. Is there any likelihood the valuer will value the property at the same price I purchased for over a year ago?

Not a hope in hell.

See my earlier post in this thread, the exact same thing happened someone I know. They managed to get the apartment at the much cheaper price as they had no money to make up the difference between the two different valuations.

The builder is then left with the option of a guaranteed sale at a reduced price or no sale and a long lengthy legal battle.

The overwhelming majority of builders will take the small hit and sell at the reduced price... especially if you make it clear that you have NO more money.

aboutjo1

Hi Bobby,

Thanks for the advice. Thats grea news to hear. If thats the case then hopefully the builder will have to re-negiogiate.

iguana

bobbysands81 wrote: »

I couldn't imagine a builder taking someone to court over this in the current climate.

They have been doing just that and in over 100 cases the High Court has ruled in the builders favour. Certainly the OP should try his best to negotiate the highest discount possible or get out of the contract forsaking his deposit (the better option for him, but extremely unlikely the builder would accept that). And that includes changing solicitors, I'm not sure about the OP's case but a huge amount of people used solicitors recommended by the selling agent which means the solicitor has massive conflict of interest and won't always do best by their actual client. But telling him the builder will surely negotiate and is unlikely to take him to court is misleading. I don't disagree that it makes more sense for the builder to re-negotiate, but as it stands there is legal precedent for purchasers being forced to pay what they agreed to.

The worst case scenario is that the OP refuses to purchase, the builder sells to another party for considerably less and then takes the OP to court for the difference plus costs. The judge could then order the OP to repay the builder over time at a set rate which, if the OP doesn't make these payments, will land him in prison for contempt of court. Hopefully this won't happen but that doesn't mean it isn't possible and the OP should be aware of exactly how few rights he has and take this into account when deciding what to do.

aboutjo1

Just an update. Had the valuation carried out. The value was 68k less than I agreed to pay. Wow!


Its a lot of money for the builder to drop off the house. He better or I'll have to walk away minus deposit.:(

BostonB

aboutjo1 wrote: »

....I'll have to walk away minus deposit.:(

I don't think you can legally do this.

bobbysands81

aboutjo1 wrote: »

Just an update. Had the valuation carried out. The value was 68k less than I agreed to pay. Wow!


Its a lot of money for the builder to drop off the house. He better or I'll have to walk away minus deposit.:(

I know of a case where a builder dropped the price by 130k, best of luck.

bobbysands81

iguana wrote: »

They have been doing just that and in over 100 cases the High Court has ruled in the builders favour. Certainly the OP should try his best to negotiate the highest discount possible or get out of the contract forsaking his deposit (the better option for him, but extremely unlikely the builder would accept that). And that includes changing solicitors, I'm not sure about the OP's case but a huge amount of people used solicitors recommended by the selling agent which means the solicitor has massive conflict of interest and won't always do best by their actual client. But telling him the builder will surely negotiate and is unlikely to take him to court is misleading. I don't disagree that it makes more sense for the builder to re-negotiate, but as it stands there is legal precedent for purchasers being forced to pay what they agreed to.

The worst case scenario is that the OP refuses to purchase, the builder sells to another party for considerably less and then takes the OP to court for the difference plus costs. The judge could then order the OP to repay the builder over time at a set rate which, if the OP doesn't make these payments, will land him in prison for contempt of court. Hopefully this won't happen but that doesn't mean it isn't possible and the OP should be aware of exactly how few rights he has and take this into account when deciding what to do.

It's fairly obvious that the Courts will find in favour of the Developers due to contracts being signed and the Developer being "in the right" as such.

Do you have any further info regarding these 100 people? I'm interested to see what their situations were, whether any of them tried to negotiate the price with the developers or whether they just wouldn't go through with the sale after property prices had fallen.

I would imagine that anyone who tries to negotiate the price downwards would have a very good chance of being able to especially if the developer believes that the buyers have no means of getting their hands on more money.

iguana

bobbysands81 wrote: »

Do you have any further info regarding these 100 people? I'm interested to see what their situations were, whether any of them tried to negotiate the price with the developers or whether they just wouldn't go through with the sale after property prices had fallen.

There was was an article about this in the Irish edition of the UK Sunday Times last week. The only one of the buyers they talked to had been initially given the option by the developer of walking away without their deposit, but they refused and now the developer has taken that offer back and is suing them to complete.

In an earlier article in the same paper when these cases were initially going to court one of the developers implied they would be willing to negotiate on price. I'm sure most will negotiate, but purchasers should be aware that they are not obliged to and that threatening to walk away will not work. And they do really need to be aware that if they are using the solicitor recommended by their developer that the solicitor has a conflict of interest and they are probably better off to get an independent one.

bobbysands81

iguana wrote: »

There was was an article about this in the Irish edition of the UK Sunday Times last week. The only one of the buyers they talked to had been initially given the option by the developer of walking away without their deposit, but they refused and now the developer has taken that offer back and is suing them to complete.

So they could have walked away, lost their deposit but still rebuy the house at a much lower price thus making a profit... but they didn't.

Most deposits nowadays are only around 10k so it's a surprise that someone wouldn't agree to this, they must have got some very bad advice.

I think I kind of remember hearing something about this newspaper article as I think some Minister might have made some comment (was it O'Dea?) stating that he hoped developers would let people back out of buying houses that they had agreed to buy if they were no longer in a position to do so.