Developer has torn up reservation and still holding deposit?

by Readers Question

9:33 AM, 5th March 2019
About 6 months ago

Developer has torn up reservation and still holding deposit?

Make Text Bigger
Developer has torn up reservation and still holding deposit?

In September 2018 we paid a substantial reservation fee to a Property Developer through a well known Property Investment Group to secure a new build apartment in Sheffield. The agreement we had with the developer and all the agents is that exchange of contract and stage payment would be made upon start of construction and final payment upon completion.

A couple of weeks ago we were informed by our solicitor that the developer had withdrawn papers and in effect torn up the reservation form despite having held the deposit since September and not returned the payment to us at the time of writing.

Does a reservation form and deposit mean nothing to these developers and agents?

What is the point of committing to a development signing up the reservation forms making a deposit if this can be torn up by the developer at will with no apparent consequences for them or formal mechanism to compensate our goodwill.

Is this acceptable behaviour from well known companies in the industry? In our mind this is very unethical and these unprofessional people need exposing. Is there any recourse open to us other than alerting? Perspective buyers through media etc. that they should not rely on reputation and to stay well clear of these organisations

Advice on how to take this forward to satisfactory closure is appreciated.

SG



Comments

Ian Narbeth

9:48 AM, 5th March 2019
About 6 months ago

Dear SG
Check your paperwork. It sounds as if the developer was not committed until he decided to "exchange" contracts. Sounds unethical. Did you have a solicitor vet papers for you or did you rely on the patter of the "well known Property Investment Group"? What did your solicitor advise?

Your best option is to get out. If this is what the developer is like now, what happens if there is a problem with the building?

Demand your money back together with interest. If not paid immediately take legal advice and threaten to wind up the developer.

When you have your money back, report the developer to trading standards. You can try to interest the local press but they are usually reluctant to run adverse stories about their biggest advertisers.


Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

Police blamed for allowing Anarchy to rule in the PRS

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More