Pulling out of purchase

[andywen8156]

Hi Justin thank you again for your reply and info I have pasted the reply from the solicitor that is acting for the purchase. I think I will indeed contact NHBC myself we can rescind the contract as the longstop was end of March but not sure what to do for the best. Rgds Andy

The development is registered with the NHBC. That organisation provides protection against the developer going into liquidation, the development not going ahead and the deposits being lost or where the administrator disclaims the contract. From the information which I'm receiving at the moment, it would appear that the properties will be completed. The administrator is unlikely to rescind the contracts. More likely, the administrator will wait until the development is well progressed and then serve notice on the various parties who have exchanged contracts requesting completion. It would still then be open to you to rescind the contract as the long-stop date has passed.

The NHBC is unlikely to become involved as the most likely scenario is that the administrator will allow the development to complete so that the existing contracts can be honoured.

[JustinN]

I see the point: NHBC will pay out is the developer goes bust or if the administrator disclaims the contract, but apparently not if you choose to rescind the contract - you would have to try to recover the deposit as an ordinary creditor then

I cannot see how, if the property is physically completed and the developer serves notice requiring completion, you can then rescind; you would first need to make time of the essence by serving a notice to complete - but maybe that has already been done - and in any case you would still have the problem over the deposit

A nasty situation to be in: I need to update my advice to clients about paying deposits to developers!

[cnandu]

A lot of developers go bust and we only realise this later when we have to settle a dispute, only to discover that the new owner of the development is different!