Pulling out of purchase

[andywen8156]

Hi I decided to buy a new property last year and was told it wold be ready for end of novermber I thus paid the deposit at the end of October last year. The property has not been completed and was told late January now it is going to be May. Am I right in understand that after 6 months of paying the deposit of £5350 I can withdraw from the purchase and claim this money bank also the reservation fee of £500. My Solicitor sort of gave me the idea I could if the property was not competed by the end of March this year but would like to pull out earlier. Briefly it seems the developer invested in Icelandic banks and is now being run by adminstrators. There is slow progress on the building but not enought to finish before end of March. This property is a one bedroom apartment in a new block and advise would be very helpful

[JustinN]

If you have exchanged contracts, then it depends on what "longstop date" (if any) was included in the contract

[andywen8156]

Thanks for the info Justin the contracts have been exchanged I called the developer today and was told if I pull out before end of March then I am in default of the contract. However the did confirm the property would not be completed to april/may. I don't have a copy of the contract that was signed but do have a draft contract which had the comppletion date day and month left empty however the year was 2009 so wondered if that on its own was enough to make the contract void? thanks for your advice

[JustinN]

Your conveyancer will have a completed copy of the contract that you can check.

If the builder says the deadline is the end of March but knows the property will not be ready by then, why is he being so bloody-minded about releasing you from the contract early? Perhaps he hopes he will, in fact, finish in time, or that you will change your mind or will fail to exercise your right to rescind properly. I therefore suggest you speak to your conveyancer without delay, so they know what you plan to do and can check what timescale has to be complied with and prepare the paperwork in readiness

[andywen8156]

Thank you Justin for your advice I had a meeting with the director of the company that is constructing the apartments. He confirmed that the long stop was end of March and would not accept a pull out before then. Basically the company is being funded by a Bank as I believe they are in administration. My conveyancer is back on Monday so hope to be updated I hope that the reservation fee will be refunded along with the deposit and I believe as they will be defaulting on the contract end date I could claim interest on those payments? not too sure?. The also had a deal where they paid a part of the conveyance fee so not sure if I will have to pay the cost now. The construction company has also confirmed that the property will not be finished until its handed over competed at the end of May. many thanks for your help its very much appreciated

[JustinN]

No problem. I'm pleased to have been able to help. BTW: I think you should get interest on the deposit money and the reservation deposit should be returned, but I doubt you will get the contribution towards your legal expenses as originally agreed. You *might* be entitled to compensation (ie: wasted expenses) due to breach of contract, but it depends on the wording of the clause entitling you to pull out

[andywen8156]

Thanks Justin have noted your valued points and when the time comes will hope to try for that. Rather disappointly have been told that the deposit would have to be refunded from the NHBC and would be a drawn out process. Not sure but could this be as the developer is in administration and being funded by a bank that is being run in adminstration too?. It does seem mean as it took sometime to save up for the deposit and yet the developer must of been aware of their suituation and yet assured us over and over it would have been completed in time. What seemed a safe purchase seems to be just an expensive loss. Cheers for the help!

[JustinN]

I will be interested to hear how quickly and easily NHBC refunds the deposit - please post details here, if you would