Developer sues homebuyer for failing to complete. A property developer has won a landmark case giving him the right to claim the full sale price of a flat from a buyer who could not raise the funds to complete his purchase due to the credit crunchMake Text Bigger
In a landmark case that could affect hundreds of similar actions waiting to go to court all over the country, Anthony Finlay was taken to court by developers AMA (New Town) for breach of contract.
He is just one of many property investors and buyers who were forced to withdraw from buying new build properties by the lack of mortgage funds arising from the credit crunch.
The cases awaiting court typically involve buyers who signed agreements before the banking crisis who then found they could not raise the funds to complete their purchase through no fault of their own as banks and building societies pulled mortgage offers.
AMA, a property developer, of Coates Crescent, Edinburgh, had sold Mr Finlay, of Newtownard, County Down, a new flat in McEwan Square, Edinburgh for £149,000.
Mr Finlay had already paid a non-refundable reservation fee and a non-refundable deposit.
They had exchanged missives (contracts) and Mr Finlay was due to move in to the flat in December, but failed to complete.
AMA sued him for the balance of the purchase price plus interest – a total of £142,489.
In Edinburgh Sherriff’s Court, Mr Finlay argued that a seller could not seek payment of the full price when retaining title to the property.
Sheriff William Holligan said: “Faced with an admitted breach of contract on the part of Mr Finlay, AMA are entitled to seek implementation of the contract by the way of payment of the price and that means seeking an order for payment.”
The court held that as Mr Finlay admitted breach of contract, AMA could seek full payment of the monies owed on the purchase of the flat.
A further hearing is due to consider costs.
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