Legal problems with building development

[greeneyedmonster]

We bought a house on a new development from a small firm of builders and to cut a long story short, they have left us all high and dry claiming they haven't the funds to finish the project to the standard we were promised. Amongst other things we were promised landscaping but instead we are left with a road that is in such bad repair it's virtually unusable and the rest of the development is like a deserted building site. The company are, on paper at least, deeply in debt, but also have assets (property) amounting to millions. They will not reply to any correspondence and we are all very worried that the development is going to slide even further downhill unless we pay for everything to be done ourselves. As some people who bought early on have already lost money to the tune of £100,000 (partly because of the recession) this is out of the question and we are at a loss what to do next. Some suggestions have been to force them into liquidation or to picket their latest development, but we really don't know which way to turn. I would really appreciate any advice or info anyone could provide? It's a bit of a long shot but we are all getting rather desperate.

[Buenchico]

Get a court order behind you first:

Step 1:
Get several quotes, from other firms, to bring the work up to the required standard.

Step 2:
Send a formal written demand to the company for the relevant sum.

Assuming that it's a limited company, the letter must be addressed to 'The Company Secretary' (and not to any named individual), using the registered address of the company (which should be on any paperwork you've got from them; otherwise you can find it here:
http://wck2.companies...ame=accessCompanyInfo )

The letter must clearly how your name and address, and the name and address of the company. It must also be dated and clearly indicate that it's a DEMAND for money, stating the sum demanded and giving the reason why the demand is being made.

Further, the letter must indicate that if the money isn't received within a specified time-frame (I suggest 28 days) you will commence legal proceedings.

Send the letter by recorded delivery, retaining a copy of the letter and proof of posting. (Use the online tracking system to note the time and date of delivery, together with who signed for it).

Step 3:
After the specified period of time, commence legal proceedings, using the Money Claim Online service:
http://www.direct.gov...aimformoney/DG_195688

Step 4:
Wait for the court case to be heard, and your Order to be granted.

Step 5:
Await payment.

Step 6:
If payment isn't forthcoming, ask the Court to enforce judgement:
http://www.businessli...791108&type=RESOURCES

Chris

[tonywiltshire]

Excellent advice, as usual, from Chris.
The danger of the legal route, which I suggest you should consider, is that the company is in financial trouble and goes into liquidation, administration or receivership, before your court action, companies in administration cannot be forced into liquidation. I suggest you find out as much as you can over the company’s current financial position and obtain professional advice; it may help spread your risk and give you more power if you combine with some of your neighbours who are in a similar position.

[greeneyedmonster]

Thanks very much to both of you. We are meeting with our neighbours very soon so the info will be invaluable. My worry is that taking legal action will be costly and we may not get everyone on board-but I'm going to think positive!

[cassa333]

You could also find out if the roads and landscaping were bonded with the LA.

If it was then there should be insurances to pay for the works.

If there is NO money in the company and it goes into liquidation or a bankruptsy then you've got diddlies regardless of how much legal power you chuck at it :(

[Eve]

Have you exchanged only or completed as well? Is there any insurance or warranty/guarantee scheme on the building such as NHBC?

Did you manage to check whether there are any bonds in place eg s.38/104 agreements for highways/drainage adoption?

[greeneyedmonster]

Thanks very much for your replies but things unfortunately have gone from bad to worse. The houses were built over 4 years ago (we bought ours 2 yrs ago) but due to the recession and the fact that they appeal to a niche market, there are still two to be sold and we have found out today that they are to be sold by auction with a starting price of £140,000 less than the current sale price. Wonderful eh?
As far as the road is concerned one of the conditions for the council granting planning permission was that they maintained the road but I have been told that no time limit was put on that. I'm going to chase the council up about this but am not holding out much hope.
I am absolutely disgusted that these people are allowed to do this. I think they just want rid so they can move on to one of their other projects and con another lot of unsuspecting people. Our best bet would really be to take them on legally but I have been told it would cost thousands-so sadly they have won. I just hope Karma will sort the $%^&£* out!!!

[tonywiltshire]

Do not give up GEM; take the advice given by Chris. If you are able to link-up with others it will increase your strength and reduce your exposure, you may be surprised of the effect proposed court action has on the other side. First make sure the building company have some funds.

[bushbaby_de]

Ask to see the decision notice from the planning department, there are likely to be lots of conditions for things that have to be finished either before the development is occupied or within a certain timeframe. There may also be linked s106/s38/s278 agreements to secure works. If they are in default the Council can take enforcement action against them.

[greeneyedmonster]

All of the neighbours are together in this already. We have meetings but don't really get anywhere. We sent a solicitors letter last year which had no effect other than them sending us all a rather churlish letter saying they are basically skint.
We are worried now that maybe they are selling all of their assets ready to go into administration or something which will be a disaster for us. I will chase up the council but to be honest I've lost the will a bit as it seems we are in a no-win situation, and whatever happens it seems we all are going to be severely out of pocket.