Has my reservation fee gone for good?
Question: I paid a reservation fee of £2,000 to the developer of a flat. The terms were to exchange contracts within 28 days of receipt by my solicitors of the draft contract papers, and that failure to do so would result in the retention of the fee by the developer towards administrative costs.
My solicitors said if I didn't exchange contracts by a certain date my reservation fee would be forfeited. The estate agent said not to worry about the date and arranged my lender's valuation for the day after. The valuer was denied access.
The developer withdrew and retained the reservation fee. The company providing the new home warranty is not a participator in the Consumer Code for New Home Builders. What can I do?
Answer: The reservation fee gave you the option to purchase the flat for the price agreed, with the developer not selling to anyone else or raising the price provided you exchanged on time. You failed to do this and so the developer should return your deposit less administration costs. These costs do seem excessive.
Your solicitors should have advised you as soon as they received the contract papers that time was running out and informed you of the due date for exchange, and agreed that date with the developer's solicitors. Inform them you are unhappy with their service and ask them to recover your deposit. If your solicitors are unsuccessful, consider making a complaint through their designated complaints handler and if you are still unhappy contact the Legal Ombudsman.
The developer's selling agent misjudged the situation entirely. You could pursue a claim in the small claims court but you will have to prove that the administration costs of the developer were excessive.
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If you have a question for Fiona McNulty, email email@example.com. We regret that questions cannot be answered individually.
Fiona is a partner in the residential real estate team at Thring LLP (www.thrings.com).
These answers can only be a very brief commentary on the issues raised and should not be relied on as legal advice. No liability is accepted for such reliance. If you have similar issues, you should obtain advice from a solicitor.