Warning for NEW BUILD buyers as couple lose money and their dream home

As disbelief turned into fury David Moore and his wife Margaret contacted Crusader in a bid to recoup their losses and warn others about the pitfalls of buying off plan that had caused them such misery. 

And what a cautionary tale it turned out to be.                                      

It began in February 2018 after the Moores, as is typical of many these days, downsized into a retirement flat themselves and had £150,000 over they could use to top up their pension income.

They chose property, investing in a buy-to-let flat in a block being planned in Thetford, Norfolk, which they secured with a £500 fee, part of the payment procedure for new builds that first reserves the plot for prospective buyers. 

Their contract, subsequently described as “scrappy” by the legal experts Crusader consulted, was handled by local estate agent Lawsons who passed the payment directly to the developer, Belal Rouf, a director of local firm Rouf Homes Ltd. 

The couple followed instructions to keep the £150,000 in an instant access account, telling Lawsons and their solicitor they would pay it once contracts had been exchanged – expected in spring last year.

“But by November the property was still not ready. I had never dealt with the developer directly so called the estate agent almost every week to find out what was going on,” says David.

“In December we learned the flat had been sold to a third party. But our £500 had not come back, and we had also paid legal fees and lost interest on the holding account, altogether £3,132.”                      

Lawsons told David the sale had shocked it too and caused losses.

The Moores’ solicitor Rudlings Wakelam confirmed it had heard from the developer’s lawyer advising that the seller would pay towards costs.

But “as we have no direct contact with the seller it was assumed that the seller will contact you directly or through Lawsons,” it added.

But the Moores say they have received no formal response.

Their contract states however “the Reservation Fee shall be retained by the Seller and not repaid to the Buyer if the Buyer does not proceed”.

++ If you’ve been affected by this issue or feel you’ve been a victim of injustice, please contact consumer champion Maisha Frost on maisha.frost@express.co.uk ++

According to Jane Senior, property dispute resolution expert with law firm Lodders, “the agreement is lacking in detail.

But the Moores should be able to get their fee back because it says it is non-refundable if the buyers don’t proceed, whereas it was the seller”.

The case also raises the matter of how many contracts were issued at the same time and how the actions compare to what is laid down in the house builders (NHBC) consumer code designed to create a fairer deal for buyers.

“A seller of a property who wishes to issue two contracts to different prospective buyers must declare that there is a contract race,” advises Senior.

“Additionally, as the prospective buyers each paid a reservation fee, the seller is very likely to be in breach of an express term of the reservation contract.  

“Even if the reservation agreement does not expressly provide that the seller will not sell to another purchaser during the reservation period, that would in my view be an implied term.  This conduct on the part of the seller appears to be a blatant breach of contract and entirely unacceptable conduct.”

The NHBC’s Consumer Code for Homebuilders “is a code and only applies to house builders who are registered with NHBC or similar bodies,” she adds.

Crusader asked Belal Rouf why the reservation fee had not been returned, but received no response.

Lawsons also tried to get a better deal for the couple after Crusader contacted it. It has now told the Moores of an informal offer comprising £500 for the fee and £500 costs.

Managing director Matt Lawson said: “Until the Daily Express contacted us we were unaware that the solicitors dealing with the sale had not refunded Mr and Mrs Moore’s deposit to them. We take pride in looking after all of our clients and following this information we have offered to assist Mr and Mrs Moore and hope to reach a satisfactory outcome soon.

“This is the first we’ve heard. Yet they have had months. It has to be because of Crusader’s involvement,” responded David who has now decided to pursue their fight in the small claims court.   

Under breach of contract he could claim for the legal charges he paid his solicitor and loss of interest, both of which could be considered as damages resulting from the breach.