Builder cancelled sale on exchange day (new build)

[Loncan]

Hi everyone. Wondering if anyone has been in this position and might have some advice...

I’ve been in the process of buying a new build flat since early May (with help to buy if that makes a difference). The flat is complete, and was move in ready when I viewed it in May.

The builder’s solicitors have been atrocious (ignoring emails, waiting 1.5 months to send a form even with almost daily follow ups from my solicitor, etc). I was supposed to exchange today but, after ignoring my solicitor for almost 2 weeks, they advised at the last minute that the builder has not and will not give them permission to exchange. Apparently a new sales manager joined the company over the summer, and has refused to allow the exchange on any sales made by the previous one. They would offer no further information except to say that it’s no longer in their best interest to exchange and that I needed to contact the building’s sales team ASAP. My multiple calls and emails were ignored, except for the 3 calls where someone answered and promptly hung up on me. The emergency contact number I was given is inactive, so I can’t get a hold of them that way either.

My solicitor has said he’s never experienced anything like this before. He suspects that they never intended on completing the sale and that the solicitors dragged out the process on purpose. The builder’s solicitors are no longer answering his messages either so we don’t really know exactly what’s going on.

Has this ever happened to anyone else? Do I have any recourse? Is this worth pursuing with the Property Ombudsman? Apologies if these are stupid questions; I’m a first time buyer and have had quite the disappointing day. Thanks in advance for any advice.

Sorry this is happening to you, but you have no recourse. People (and companies) are legally allowed to change their minds with no penalty up until the point of exchange. Rotten of them to do it in this way, but my best advice would be to get looking for something better!

Well, your solicitor should be best to tell you if you can get anything

As pp said, one issue is that anyone can pull out of a sale. But in your case, I’m wondering what happened to the deposit, don’t you have to give 10% before exchange on a new build? On that basis, i would hope they’d have to refund you ASAP.

Thanks both for your replies. I was hoping because they’ve apparently known for months that they were planning on backing out of the sale but went through the motions regardless that I might be entitled to some sort of compensation, but I knew it probably wasn’t likely.

The builders have literally dropped off the face of the earth, so I have no idea what’s happening with my money, and my solicitor can’t get ahold of them either.

I haven’t seen anything else in my budget unfortunately, so it looks like I’ll be making some big life changes in the next few weeks to avoid being essentially homeless. Thanks again for taking the time to reply.

That may be really disappointing for you. I hope that in a short time you look back on this and feel okay about it, because you've found something better.
Given how they're behaving, they don't sound a very good bet. They could be having financial problems, and may have cut corners with their workmanship and materials. The building could have lots of issues - this could be a lucky break. I know it won't feel like that now. I hope you have somewhere to stay in the meantime.

So they’ve had a reservation fee from you?

I’ve got to go to bed but racking brains to think who could give free advice. Try posting on Martin Lewis webforum. Also, try your local Citizens Advice Bureau and even try emailing your local MP. Even if they are crap, some have lovely staff who could maybe suggest somewhere for free legal advice - assuming your solicitor will charge more than you originally expected.

I missed that you'd paid the some money. Hopefully your solicitor will deal with this quickly.

Perhaps you could see if other buyers are talking online about this - local Facebook groups, twitter? The local newspaper?

PS I definitely think you should report it to the Property Ombudsman - anything to increase speed at getting your reservation money back.

Thanks again everyone.

I was up until about 4am trying to find any property in my budget...the closest I found was £175,000 over my budget :/

My current living situation is complicated and I am essentially homeless now. I literally don’t know what I’m going to do. I’m just so mad that the builder’s solicitors said they were fine to exchange 2 weeks ago to turn around and do what they did yesterday. I have tons of home goods I now need to sell.

Regarding money, the builders have the reservation fee I paid in May and I transferred the 5% down payment to my solicitor 2 weeks ago when we were led to believe that the exchange was imminent. I’m assuming that money is still being held by my solicitor, but he doesn’t answer emails on the weekend so I won’t know until next.

I’ll call citizens advice on Monday, thank you for that recommendation.

@Loncan don't worry about your 5% that you transferred to your solicitor, that will still be safely with them and they'll be able to transfer that back to you (although you will have obviously incurred some legal costs up to this stage of the transaction - searches etc). How much was the reservation fee you paid directly to the developer? Check the Ts&Cs but if they refused to exchange, you are normally entitled to that back. No other compensation is likely to be payable though, even if they've been thinking about this for months. A large company with some justifiable reason for doing this and who were apologetic might give you something as a gesture of good will to cover legal costs (particularly if they wanted to avoid media attention) but this sounds more like a small company who are having financial issues. Can you tell us what developer it is?

@Dinosauraddict
It’s Inspired Homes. I’ve googled their name to see if there are any issues with them, but didn’t see anything.

Inspired are massive! Do you mind if I ask if it’s in Croydon? If it’s one of those big blocks that are already built then it’s a mystery.

If you can't find anything similar for the same price, it does perhaps indicate that they were under-priced, and the new Sales bod may have picked up on this? Awful behaviour though - how stressful for you Loncan.

This is pure speculation but I wonder if there are issues with the build quality. In the last month or so, a lot of mortgage companies are refusing to lend on buildings that don’t conform to advice note 14, which has been brought in following Grenfell.

@RosaWaiting Yes it is!

@ajandjjmum There are others in that price range but they are either not yet complete (with completion dates in 2020) or are a 2+ hour commute from work, which I can’t do.

@Hornet7067 no issues with cladding, etc. The valuation was fine, and the bank had no issues with anything.

Have you contacted the Head Office directly and spoken to customer service (or lack of!). Facebook/Twitter etc.? I think they at least owe you an honest answer - and if they're a decent company, maybe re-think?

@ajandjjmum

I tweeted them this morning, but haven’t received a response yet. It doesn’t look like there’s a dedicated number or email for the home office, but we’re currently googling for whatever info I can find.

www.showhouse.co.uk/career/interview-martin-skinner-inspired-homes/

Apparently he gets involved in every part of the business - I'm sure he'd be interested to hear your story. Doesn't reflect well on his company at all!

@ajandjjmum Thank you! We found his name as well but I didn’t realize he wa so involved with all areas. I’ll contact him.

Thanks all for your replies, I really appreciate it.

Have they got back to you @Loncan ?

@Dinosauraddict Nope. And I can’t imagine I’ll hear anything on a Sunday, so I’ll be calling them repeatedly starting at 9am Monday. If I don’t get a response by 10.30/11, I’ll be emailing their CEO, and if I still don’t get a response I’ll be heading straight to their office.

I think emailing the CEO should get a response!

Inspired Homes is under administration - court appointed since last Friday. Martin Skinner has been in jail since Aug 21st, so a letter to the CEO will go to the administrators. I doubt that there was any intentional withdrawal of sale and I'm not surprised you didn't get a straight answer. You can find information about the administration if you go to Inspired's website. Information about the court sentencing is harder to find, but it is available in the Chichester news (Google "Martin Skinner" custody) or similar.

Well that’s hardly unsurprising, they’re trying to flog tiny (even by London standards) at extortionate prices, I don’t think they sold a single one from what I’ve heard from our agent.

The one on abbeville road in Clapham to clarify.

I think they've sold some (it sounds like @Loncan might have thought she had bought one) but it isn't going well. The sales pitch is that the flats are complemented by generous shared spaces, so them being small in themselves isn't the be all and end all. I haven't seen them, so I don't know how true that is.
I wouldn't be surprised if the sale picks up again once the administrators get everything under control. Though that might take a few weeks.