Off plan buyers who can't complete
April 21, 2010
Posted by:Stephen Hill
The recent dramatic change in lending conditions and the collapse in the values of newly built city flats have combined to expose buyers off buy off plan properties to huge financial loss and many are looking to make compensation claims for professional negligence. These buyers would typically have paid a deposit of 10% in 2007/20008 with completion due to take place in 2010. Now that the flats are built they are contractually obliged to complete the purchase but many are unable to do so because they are either unable to obtain a mortgage, or their existing offer has been withdrawn because the lenders has exercised a "revaluation clause". Most of the people I speak to are reconciled to the loss of their deposit but have been shocked to discover that they are also liable for any further losses incurred by the developer if they sell the property for a lower price and incur further loss. Many have been sued by developers for six figure sums. They are coming to us as professional negligence solicitors because most - but not all - conveyancing solicitors have failed to advised them that they would be liable for losses that exceed the amount of their deposit. Because prices have been rising for so long, this particular kind of professional negligence has not arisen for over 15 years and there is almost no case law on the subject. If you have find yourself in the situation then feel free to contact me to discuss a compensation claim. The claims are very difficult and the strength of your claim will depend on your precise circumstances.