Consumer rights: 'I was left out of pocket when an estate agent jumped the gun'

The potential buyer of a new-build flat had to pull out after the completion date dragged on
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The Independent Online

Q. I decided to buy a small flat closer to work. After searching the Rightmove website I found a suitable flat in a development of 38 studio apartments and first viewed the property in October 2010.

The flat was perfect: it was low maintenance and the service charge was £500 a year. The estate agent told me it would be ready in about four weeks. I applied for my mortgage and paid an application fee of £325. I also paid a £300 holding deposit, a survey of £325 and £350 search fees. In November, I told the estate agent I was ready to move in but was told he couldn't give occupation until the new staircase was completed. After that there was a range of excuses for the flat not being ready.

Time delays have been just one area of frustration; another has been misleading information. On 25 January 2011, I got in touch with my solicitor and asked for an accurate cost for the service charge. She dropped the bombshell that the figure was in fact £1,737.54, plus an extra £500 payment for completion of the management fee. I have now pulled out of the purchase.

I told my solicitor, who she said she completely understood. The flats were marketed far too early, but I would have to pay an abortive purchase fee of £395. She also discovered from the seller's solicitor that an application for a certificate of lawful development made in December 2010 had been refused. This has now put the completion date back another 12 weeks at the earliest. I looked at Rightmove today and the flats are still being advertised, now with another two estate agents. I phoned them and was told by both that the flats are complete and ready to move into. I was hoping to move in at the end of November. Since then I have spent £1,695 on fees and £1,600 on commuting.

CL

Kent

A. This is a cautionary tale. Sites like Rightmove just take the details from the estate agents who have the contracts to sell the properties. The sellers and developers instruct the estate agents albeit with their guidance.

Housing expert Luke Doonan, of propertyexpert.tv, tells me this is a very common problem. "Most new developments are sold with an open-ended completion date. Developers will never commit to an exact date and in most cases would say something like "completion date expected spring 2011", giving no date and in most cases leaving the purchaser just hanging around waiting. They then are obliged to give a 10 or 12-day window for the purchaser to inspect the property and complete on the sale when the property is ready.

"It sounds like a case of an agent just wanting to do a deal with no client aftercare. The agents will normally get paid their fee on exchange of contracts and not the actual completion, meaning that the agent is paid in full and therefore feels like their work is done. In some cases when buying off plan or buying unfinished units, it can be a couple of years between exchange and completion. This does leave the client rather lost."

Sadly I don't think there is any recourse here. Mr Doonan's advice is to write to the developer directly laying out everything in the hope of a sympathetic ear.

On the service charge figures, Mr Doonan says: "The developer will always employ a management company to run the development and look after the service charge collection. In most cases, the developer and management company will set it quite low for the first year as this will be attractive for homeowners and investors. Service charges often at least double after the first year. A warning to anyone buying new build homes: ask to see the estimated budget for the running of the development."

Mark Hayward of the National Association of Estate Agents says: "I would always advise reading the small print as developers are often unable to give a fixed completion date. Usually, if the construction is nearing completion, the move-in date is likely to be more specific. However, I would always recommend building in a degree of flexibility and ensure that all fees paid, where possible, are dependent on timely completion."

No one I've spoken to feels you have much chance of getting your money back. Your only recourse might be to sue the developer and/or the estate agent if you feel you can prove either or both caused your losses by misleading you. A claim using the procedure for small claims in the county court would be the cheapest way to go about that. But you should take legal advice first and are likely to be throwing good money after bad.

www.moneyagonyaunt.com

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