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Original poster

New build chain nightmare - what would you do?

42 replies

Al991 · 14/06/2023 06:11

A couple of months ago we had offer accepted on dream home. Perfect area, bigger than we would usually get, perfect condition, recently remodelled - everything we have dreamed for lowish price and much better than anything else in area we want to be.

Catch is seller is buying a new build which is under construction. Build estimate is August - October, currently predicted end of September. Our mortgage offer expires mid November.

I have tried and failed so far - with a lot of stress and hours on the phone - to negotiate a long stop date that would allow us to legally exit the contract if we haven’t completed by the time our mortgage offer is about to expire. So far nothing I’ve tried has worked because the developers say no.

There might be other options (??) happy to hear any suggestions! Chain break would work but only if they agree to it, which is doubtful since sales are linked.

I am assuming at some point we will have to exchange prior to the build being completed due to pressure on seller from property developers.

So the options may come down to

Walk away
Take the risk on exchanging contracts knowing the build could extend past our mortgage offer. There are multiple things that could go wrong in my opinion including a) interest rates getting so high that it costs us £100s per month more than what we’d repay now, which is already a lot b) I will be on maternity leave so there could be complications getting a mortgage granted in the first place, especially with new dependent. If we can’t get a mortgage we’d have to pull out and lose our deposit plus pay compensation which would probably leave us penniless. I think the interest rates are what concern me the most though as they’re most likely to screw things up.

I can easily see this getting to the point where the decision rests with us - give up dream home, even knowing there’s every chance the build could be completed on time and all would be fine OR take a risk on potentially paying huge mortgage or worse!

I am so miserable over this. I know decision rests with me just wondering if anyone else has done this and what they did or what they would do… is there ever a situation where taking the risk is better?

OP posts:

JaukiVexnoydi · 14/06/2023 07:35

Be very very cautious about the idea of you buying and them renting from you
(1) as landlord you would immediately become liable for various safety-related things in the property that you have no control over eg gas safety, fire exits, which aren't obligatory for owner-occupied and may not be up to code
(2) you would need to rearrange the mortgage to be a Buy-to-let (more expensive) or if you don't then risk the mortgage company forclosing the loan and blacklisting you for breaking their Ts&Cs
(3) the former owners, now tenants, would acquire extensive rights protecting them and it could take a massive court battle to evict them.

Much much better for the contract between you and the vendor to be explicitly that completion will either by on 31st October at the latest, or before with 2 weeks notice, and they then contract with the builders that the builders will pay for their temporary rental elsewhere if the build isn't done by 31st October.

ElmTree22 · 14/06/2023 07:58

The seller is reliant on you guys. I would do as other posters have suggested and threaten to pull out unless you complete on a certain date. Let them arrange some temporary accommodation for themselves.

Cupcakequeen75 · 14/06/2023 10:56

It is for the buyer of the newbuild to move into temp accommodation.
Was there ourselves 2-years ago and had no idea that was how things were now working but the more we researched the more it became apparent that was the expected process.

Tryingtomoveisdrivingmecrazy · 14/06/2023 11:39

As others have said, you really need to put the onus back on the vendor of your potential purchase. If you pull out, they will likely lose their dream new build home as there’s no guarantee they will find another buyer in the current climate. I suspect that if you give them an ultimatum, ensuring you complete by end of October, you’ll probably find then they will find a way to make it happen. You are in a much better position than they are. I’m sure they won’t want to have to start all over again looking for another buyer.

Goldielockes · 19/09/2023 21:36

JaukiVexnoydi · 14/06/2023 07:35

This is not true. It can be done through the solicitors who will be able to mitigate the risk.

LovesFood1987 · 20/09/2023 04:14

The people buying the new build need to move into rented.

We previously bought a new build with the same messing around about when the house would be finished, initially they said 1st September but eventually was 30th November. We had to go between air bnbs and tbh it was a nightmare but it was our choice to buy a new build and not the buyer of our home who should face that inconvenience!

Vatika · 26/04/2024 22:44

@Al991 OP what happened at the end? We are in exactly the same shoes and debating what to do.

TeenLifeMum · 26/04/2024 22:47

Our sellers were moving to a new build so they sold to us and moved in to a rental for 3 months. I’m sorry your sellers aren’t more reasonable.

Just realised this is a zombie thread someone resurrected.

Vatika · 26/04/2024 22:57

@TeenLifeMum yeah me. We are stuck in the same position. At first it was so exciting. Oh a short chain! We offered on the house in the first week of January! Our solicitors (who by the way act for the end of chain as well. Isn't it a conflict of interest?) are pushing for the exchange next week. Why on Earth? The new build, the end of chain (there are only 3 of us + the developers at the end), is not going to be completed until end of August. They want to set the cut off date mid September with our mortgage expiring just a week after that. It is 5 months away from now. Anything can happen within those 5 months. The deposit we could lose is absolutely enormous.
It is only today we found out from our solicitor about the 28 exchange date on new builds. Never knew about it. Doesn't make sense to me at the bottom of the chain. We are not holding anyone, we are first time buyers.
Pfff the worries of all of this

TeenLifeMum · 26/04/2024 23:26

@Vatika surely with exchange you set a moving date and the people moving into the new build have to move to temporary accommodation if their house isn’t complete? Don’t exchange without a set date and it won’t be your issue if they can’t move to the new home. They will still have to move out.

Vatika · 26/04/2024 23:31

@TeenLifeMum yeah they want to exchange next week and complete in mid September with a set date (although it is not currently in our contract. It would have to be added. At the moment it says on the notice). The completion date was communicated by the solicitor just via their email to us.

I think it is still risky and so far away from today.

Twiglets1 · 27/04/2024 04:58

I wouldn’t be agreeing to that @Vatika it is too long between Exchange & Completion. I wouldn’t agree to anything longer than 2 months and even that is longer than normal. Surprised your solicitor is suggesting you do so, I think I would get advice from another solicitor that definitely has no conflict of interest, or walk away.

Vatika · 27/04/2024 09:26

@Twiglets1 I think it is getting a bit nasty.
According to the email from our solicitor if we don't exchange in May the developers will pull the contract and the chain will collapse. And they say we need to exchange in order to keep the chain together.
And this is the first time we are hearing about all of this. Nothing was discussed.

If we ditch the solicitor we still need to pay them 😭

Twiglets1 · 27/04/2024 09:31

Oh I'm sorry to hear that it's getting nasty.

You haven't done anything wrong. I think for peace of mind it would be better to change solicitors and get one you have confidence is impartial. Even though yes, you would still have to pay your current solicitor for the work they have done so far on your behalf.

To Exchange in May to complete end of August sounds nuts to me (but I've got no legal training so better to speak to someone who has).

mafsfan · 28/04/2024 21:13

The people buying the new build need to go into rental. You need to push for exchange (in May if they want it!) and then completion the week after (if that suits you). They can complete in May and move into a rental when you complete. When you buy a new build you have to suck it up a bit because you're at the mercy of the developer so either they want their house sold, the chain to complete and to move into their new house, or they're willing to lose the chain.

Vatika · 28/04/2024 22:07

@mafsfan I'm not sure they will agree. I don't know. Hard to say. At some point some time ago we did agree to wait without them going into rental and that's what we have been patiently doing but at no point did we agree to exchange so early and take such risks with our hard earned and saved deposit.

mafsfan · 28/04/2024 23:00

The 28 day exchange is standard for a new build developer. Anybody buying a new build is told this so they have to manage the sale of their house to fit this. That's why lots of people part exchange when buying a new build because it's the easiest option. Yours have chosen to sell rather than part exchange but they will know that their timelines are restrictive.

It's perfectly ok for you to go back to your solicitor and say you agree to exchange but want to compete 7 days later and put the ball back in their court. The developer will not want them to not exchange by 28 days so you have the upper hand. You don't need to take on the risk of exchanging months before completing. They need to make the chain work.

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