Kent Solicitors

As in the last recession, problems are emerging with new build contracts. Lessons have not been learned.

Background: On selling a new build, the builder wants to keep the completion date flexible.
What happens if the builder does not allocate men or resources to completing your new build, does not call for completion and, in the meantime, your lender withdraws / modifies his loan offer?

Much depends on the wording of your contract to buy. Did you stipulate a long stop date? Admittedly, not many builders agree these, but at least, their refusal would have focused your mind on this entirely foreseeable problem.

You are in danger of losing your deposit and being sued by the builder for the balance of difference in the contractual price and the current price, now the market has dropped.

What sort of advice were you getting (or rather not getting)? The newspapers have been talking about the credit crunch for over a year now. Has your Conveyancer been negligent in not discussing this scenario? Especially if you are committing yourself to a fixed date on the sale of your existing property.

Example: you agree to buy for 200k and put down a 20k deposit. Your Lender was going to lend £180k, but will now only lend 150k. You cannot find the extra 30k. The builder calls for completion. You cannot complete. The builder sells the property again for whatever he can get. If this is only 160,000k, then he is 40k short. He can forfeit the 20k deposit and sue you for the other 20k.

Michael Breeze Mobile: 07 900 195.195 email: mdb@kaslers.co.uk

Labels: new builds