Jump to content


property investment


roro
 Share

style="text-align: center;">  

Thread Locked

because no one has posted on it for the last 5538 days.

If you need to add something to this thread then

 

Please click the "Report " link

 

at the bottom of one of the posts.

 

If you want to post a new story then

Please

Start your own new thread

That way you will attract more attention to your story and get more visitors and more help 

 

Thanks

Recommended Posts

can anyone help . i reserved 5 properties from a developer and the terms of the contract was that i have to do exchanges in 28days or else i loose my deposit which is £5000 . the problem i got was that his propertis are not valueing up after evaluations were carried out . i have done evaluations twice ,which has costed me £1750 each time i do it . i then approached him and told him that his properties are being undervalued but he told me that it has nothing to do with him . secondly i also got told by the lenders that the same properties did not have building insurance or rather he put some fack insurance which is not recognised by any lender . i cannot spend any more money on this deal and would prefer to have my money back . how can i legally claim my money back from this fack developer who uses this scheme to legally take money from people . i have gone over the 28 days and he was okay with that only that we did not do new contracts but verbal agreements.

Link to post
Share on other sites

I'm no expert on this. Were your offers "subject to survey"? Were they in writing?

 

If they were, and the survey is coming back with a lower price than you'd offered, I'd have thought this should then be negotiable.

 

If not, and you agreed to pay X for the properties, and the Bank is valuing them at X - 10% then I'd guess you're still obliged to pay X whether you can raise the funds or not: you offered to pay X, they accepted.

 

It is the Developer's problem in so far as this would then theoretically happen to everyone who went to view these properties, so nobody would ever actually buy them except for cash.

 

Are they newbuild flats by any chance? These are frequently overvalued by the developer especially in today's market, there are flats round here which have been on the market for years priced higher than a four bed detached house would cost, there just isn't a market for them.

 

In any event, if the true value of the properties is less than you'd believed it was then it sounds like all efforts should go to getting out of the deal even if you lose out, so you're not in instant negative equity.

 

If everything was done verbally, and there is nothing in writing, is there anything to say that you didn't make it subject to survey?

Link to post
Share on other sites

the offers were subject to valuation yes and there was a contract done . the surveys were done and yes its true his properties are overvalued and have got no NHBC or building insurance . i made up my mind already that i want my money back but the problem is that as far valuetion is concerned he can turn up and say its not up to us if they do or not because they have comparisons from valuers in there pockets . at the same time the 28days is gone even if we have cont business after that . as for insurance he can also say he is not obliged to take certain insurance so if my lender does not accept it its not his fault. as per your last line , no there is nothing to say that but the fact that there were no exchanges is what he will base it on. he will refuse to give my money back and going to a lawyer will cost me £2 to £3000 yet am trying to recover £5000. so the isssue is to try and get my money on my own .

Link to post
Share on other sites

OK. To see if I understand correctly:

 

1. You agreed to pay X for five properties and reserved the properties by way of a deposit.

 

2. When arranging your mortgage the companies have told you they will only lend X - some % because they do not value them as highly as you had offered.

 

If you proceed with the deal and manage to find the funding from somewhere else to make up the shortfall, that shortfall will in theory represent your immediate negative equity on the properties because if you then sold them on, you might well have to sell they for what they are worth which is less than you'd paid.

 

Therefore you don't want to proceed. The problem is, you've formed a contract where you agreed to buy them at X price subject to survey and the Developer has this in writing and is saying that the valuations "on your side" are too low.

 

If the Developer lets you pull out, he or she then has to find one to five more buyers for those five properties, and probably realises that he or she will only get the lower amount. So given that he or she has a signed contract with you it's in their interest that you proceed and exchange.

 

If the contract has no pull-out clause, then in theory I'd imagine the Developer could sue you for losses due to breach of contract. Whether the properties are worth what you offered or not is not relevant: you agreed to pay that much for them. Therefore if the Developer allowed you to pull out of the deal and lose your deposit then he or she might well lose more than the £5k you'd stand to lose.

 

One trick Developers use is to sell the first few properties in a new development to, shall we say, associates. This then registers higher sold prices for the properties so that when they are then sold "to the public" the developer can point to those previous sold prices representing their market value. Have a look at Free UK House Prices - nethouseprices.com to see if there are any actual sold prices registered for this development and what they are - your valuer will have done so (data based on Land Registry recorded data, does not show very most recent sales)

 

This all seems to come down the the 'subject to survey' line and the definition of whose survey it is which is what it would come down to in Court unless something in the contract overrides it.

 

Is there anything else about the properties which you could point to in order to back out: for instance, compare the dimensions of the properties to those quoted in the original brochure. It isn't unkown for a bit to be shaved off the actual dimensions when the properties are built and people have in the past walked away from contracts due to proving this.

 

If they are off plan: are they finished yet? When were they meant to be finished? Was any kind of quoted yield (letting) given? Ask local EAs: does it stack up? And so on. You may find some other leverage which enables you to pull out.

Link to post
Share on other sites

the properties do not have a valid building insurance and there is nothing that was put in place after the intial 28days which is what the contract is based on , instead we contuied with business as normal after he granted me extension to do exchange and completions . all his properties have building faults and cannot be completed as of now . the fact is that he alraedy knows the tricks he is playing. he has kept the properties on the market even after taking deposits from me which nulifies the agreement we had . he has no building insurance that is recognised by the lenders . and the properties are overvalued which is all i have against him.can i contact the office of fair trading . will that help

Link to post
Share on other sites

the properties do not have a valid building insurance and there is nothing that was put in place after the intial 28days which is what the contract is based on , instead we contuied with business as normal after he granted me extension to do exchange and completions . all his properties have building faults and cannot be completed as of now . the fact is that he alraedy knows the tricks he is playing. he has kept the properties on the market even after taking deposits from me which nulifies the agreement we had . he has no building insurance that is recognised by the lenders . and the properties are overvalued which is all i have against him.can i contact the office of fair trading . will that help

Link to post
Share on other sites

 Share

  • Recently Browsing   0 Caggers

    • No registered users viewing this page.

  • Have we helped you ...?


×
×
  • Create New...