When does completed mean completed?

by Readers Question

9:38 AM, 8th January 2019
About 6 months ago

When does completed mean completed?

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When does completed mean completed?

I bought an off-plan, new-build apartment in the Adelphi Wharf (Fortis) development in Salford back in 2015 and after a whole year’s delay my apartment was finally finished in November. Or at least that is what I was told by PLS Solicitors, the firm acting for me (and probably most of the other buyers) when they requested the final payment, which I duly made, and legal completion took place.

I travelled from East Sussex to Salford the following week to see the apartment before it’s let (the 1-year rent guarantee period starts 1 month after legal completion) and was surprised to find that I had to wear a high-vis jacket, hard hat and steel toe-capped boots in order to go inside the section of the development in which my flat is situated. The common ways were a long way off completion, as was the reception area, and the unfinished gym was being used to construct kitchen units and store materials. I was told that the basement car parking space, for which I paid £10,000, was not accessible, even with safety gear on.

My flat appeared to be one of the few that were accessible on that floor. It still needed some snagging work done in the bathrooms and the carpets looked as though they had been hurriedly laid for my visit as they were poorly fitted. The contractors told me during my visit that the flat would not be habitable until mid-January because they needed the majority of the flats to be finished, along with the common ways, before anyone can move into that section of the development.

PLS say that I completed on the flat on 21 November because they were told by Fortis’s solicitors that a Warranty Certificate and Building Regulations Completion Certificate had been issued which “confirms that the property is practically complete, ready for occupation and use, and accessible according to the terms of the Agreement.” As far as PLS are concerned they have fulfilled their legal obligations and seem uninterested in the matter.

A local surveyor I contacted confirmed that the communal areas to my apartment should have been completed before I legally completed as I should be able to move in on day one of ownership. In addition, prior to exchange of contracts, he said that PLS should have asked me to visit the property to check that it was either finished or at least had the builders snagging list completed and presented to me. This would have given me chance to inspect the quality of the property before completion.

The icing on the cake is that Fortis forgot to say that the price of the compulsory furniture pack did not include VAT. That was missing from all the paperwork and despite being the developers’ error their solicitors would not complete until this was paid. As it happens, there was no furniture in the flat so I don’t know what I have paid for.

None of the above affects my guaranteed rent, you may say, but Fortis did not ask me whether I intended to let the apartment or to move into it. My previous experience of Fortis Lettings is less than positive and I had been planning to visit a local letting agent with a view to letting the place myself. A cynical person might also suspect that the £9,000 rent has been built into the selling price so there is no pressure on Fortis to let the flat, and in any case they can’t until mid-January at the earliest. On the other hand, I have to pay full council tax from 21 November.

Am I just being a moaning Minnie? How does this match with your experience of off-plan new builds?

Alan

 



Comments

Neil Patterson

10:22 AM, 8th January 2019
About 6 months ago

It sounds like the Gun was jumped a bit here as you would expect access to the car parking and communal areas, but if you are receiving a guaranteed rent that does rather sweeten the pill.

Obviously a future word of warning to instruct the solicitor not to complete before you have had a chance to personally inspect the property.

Luke P

11:59 AM, 8th January 2019
About 6 months ago

I'd make look to make full use of PLS' professional indemnity insurance. This is a complete balls-up...!

Ian Narbeth

12:23 PM, 8th January 2019
About 6 months ago

Hi Alan
I fear that your problem may cost more to investigate than it is worth. The developer will say you are guaranteed the rent so what are you worried about?
Clearly the developer has jumped the gun. I would write to your solicitors setting out the facts and saying you are not happy. Ask them to provide the Warranty Certificate and Building Regulations Completion Certificate. Unless your rental guarantee also covered Council Tax you may be stuck with it.
Look at the terms of your lease. Does it allow use of the car park and other facilities? If so, you may have a claim for damages but the matter is not straightforward.

I am afraid the best protection would have been to visit before you completed and then refuse to complete until the work was done. Again, you need to check what the contract said about completing whilst work was being done elsewhere.

If you have £5-10K to litigate you can get started but it is not going to be easy and your financial loss may just be £1000-£2000 Council Tax for a few months.

trevor white

14:12 PM, 8th January 2019
About 6 months ago

Concur with above.
The starting point would be the purchase contract. How is completion defined. It could simply be stated as a receipt of funds sent to the seller.
As a landlord your only loss could be rent which is covered.
Tax is a personal liability and is not usually recoverable unless specifically provided for.

Nick Pope

10:15 AM, 12th January 2019
About 5 months ago

As a surveyor and an old estate agent I always advised my clients that they should always choose and instruct their own solicitor for new property purchase rather than one recommended by the developer - the "special" fee involved usually means that you will get a cut-price job and the solicitor will not be fully independent.
If you had a mortgage it is likely that the tame solicitor also acted for your mortgage lender and I would suggest that you also take up the matter with them as it seems that they have also been misled by their own legal representative into believing that the property was complete. They will have considerably more leverage than you as they can always withdraw the solicitor's accreditation to act on their behalf in the future.
It also appears that either the Warranty Certificate and Building Regulations Completion Certificate have been incorrectly issued as the property cannot be safely accessed or that the solicitors acting for Fortis have been economical with the truth. Your solicitor should have required to see a copy of these documents before advising you to complete.
I would also discuss this with the Law Society - starting their complaints procedure tends to focus lawyers minds almost immediately - let your lawyers know you intend to go down this route immediately.
Next stop is the local Building Control Dept. I would call them and ask if it is their policy to issue completion certificates on properties which are incomplete. In this case it is possible that the Building Control has been delegated to the warranty provider (NHBC will often fulfil this function) and thay should be able to confirm if this has been done.
Then call the warranty provider and ask them how the hell thay can issue a warranty on a property which is incomplete. If they have indeed done that the start their complaints/claims procedure immediately.
I suspect that the rent guarantee sum was built into the original purchase price but this is not a matter which should be allowed to muddy the waters. You bought a property which could not be safely occupied on the advice of supposed professionals who were paid by you to act on your behalf and they simply failed in their duties.
I have looked at the PLS website and whilst there are many complimentary reviews there are also some stinkers. It seems that this is one of the industrial style firms (there are mentions of Team 10 and Team 21) where one qualified solicitor looks after many conveyancing clerks who do the work but don't always understand the complexities of residential conveyancing and consequently don't flag up problems to the solicitor signing off the work.
My advice - shoot off complaints in all directions and demand explanations as to why the work you paid for was not of a standard expected of professionals.

H B

13:51 PM, 12th January 2019
About 5 months ago

"The icing on the cake is that Fortis forgot to say that the price of the compulsory furniture pack did not include VAT. That was missing from all the paperwork and despite being the developers’ error their solicitors would not complete until this was paid."

My recollection on the law in such cases (and someone please correct my misunderstanding ifneed be) is that the price should say somewhere that it is exclusive of VAT. If it doesn't then the presumption is that it is inclusive of VAT.

Therefore you may have a claim and probably one that can go through the small claims courts. But I would double check all the contractual paperwork first - it may be hidden in there somewhere.

Kate Mellor

19:41 PM, 12th January 2019
About 5 months ago

Reply to the comment left by Nick Pope at 12/01/2019 - 10:15
Whilst complaining may not gain much for Alan, it may make him feel better that these “professionals” have their UNprofessional behaviour challenged through the official channels. Plus, it could mean that the other purchasers don’t experience the same issues as Alan.

Colin McNulty

8:28 AM, 13th January 2019
About 5 months ago

Great reply by Nick Pope, do what he said!

> "A cynical person might also suspect that the £9,000 rent has been built into the selling price "

Cynical? An astute person you mean. Of course the guaranteed rent has been added to the purchase price, and approved by a tame surveyor, that's how every new flat builder that targets distant buy to let landlords works.

I'm sorry to say but the lesson here is that whenever you're spending a life changing sum of money on the purchase of anything, the hour before you exchange/complete contracts, you get in your car and physically view the property yourself. Is it how you last viewed it, has it burnt down, is it finished, are their gypsies in the car park, are their squatters* etc etc?

Only when you're 100% happy do you call your solicitor (which should NEVER be the tame one recommended by the builder) and agree to go ahead.

[* This last one nearly caught me out. On the day of exchange & simultaneous completion for a property, the solicitor called me for my final nod. I said "Hold on" and drove to the property. I nearly didn't bother as I'd last visited the week before, only to find that squatters had broken in during the week and were living in the property! I really dodged a bullet there as it took the seller 2 days to get them out and secure the site, and they then paid for round the clock security until we completed 10 days later. Must have cost them thousands.]

Richard

14:44 PM, 7th May 2019
About 2 months ago

Hi, i know the thread is a little old now, but I have only just seen this topic when doing a Google search for "Adelphi Wharf Not Complete". I am also a buyer in this shambolic development and like you feel like I have been completely stitched up. This Phase 1 development is now 2 years behind schedule, and ultimately I was strong-armed into making the completion payment. Unlike you, I actually did go and see by apartment once notified of the completion, because I was suspicious given all the delays. This was on December 17. I too found things in a similar state as you did, and I argued repeatedly that the apartment nor development was complete, but all PLS would say is that according to the terms of the contract, contractual completion has been met. I was presented with the documentation from the apparent third parties and even called NHBC to establish that what I had seen was not in fact fraudulent as I could not believe that they would sign off with the condition it was in. Much to my amazement it was all legit. After arguing my point for ages, the Developer then threatened to force me to cede the right to the apartment, despite having paid 50% up front. Having spoken to the PLS Litigation team I was told that it would likely cost 5k-10k to even get a lawsuit off the ground, with a low probability of winning as they had met the conditions for completion per the contract.

It has been a disaster since the get go, and they keep telling me that the valuation is higher now when I first bought it, but of course something only has value once it is complete and in a salable state. I was there again last week, and incredibly the unit is STILL not complete, 6 months after having received the completion notice.

My question to you though is whether you have now actually seen any of this "guaranteed" rent. I have subsequently discovered that these "guarantees" have very little legal standing and so I would not at all be surprised to learn that this has become an issue too. I only made my completion payment in mid-March so I am not due a payment for a little while yet.

It has also been very surprising to me that there is virtually no mention of this mess anywhere to be found on the Web.

I have certainly learned a number of lessons through this process, and will be very pleased to just sell up and move on. Honestly though, I am scarred for life and I will never go near a new build again!!

Ian Narbeth

15:51 PM, 7th May 2019
About 2 months ago

Reply to the comment left by Richard at 07/05/2019 - 14:44
Richard
Depending on your contract you might have a claim against the developer or NHBC for loss of rent, assuming you cannot rent it out. However, the cost and complexity of bringing a claim are likely to be disproportionate.

You could contact trading standards at the Council.
You could post on Twitter/Instagram/Facebook with #[NAME OF DEVELOPER sucks] (or other suitable epithet).
Send photos of the uncompleted unit to the national press and see if they are interested. Local press are useless as they rely on house builders and estate agents for revenue.

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