Q&A - Can we get out of contract with developer on grounds of completion delays?

Q: We signed a contract to buy a house being built by a local builder on a single plot of land. We paid a deposit and were told the house would definitely be completed by the end of April 2019. On that basis we put our current house on the market and found a buyer. However, it is now the end of June, the new house is nowhere near completion and our buyer is pulling out because of the delay. We could just move out and rent but, in honesty, we have lost faith in our builder. We have told him we want to pull out but he says we can’t as we have signed a contract.

A: If you didn’t have a firm completion date you will have signed an ‘open contract’. In order to pull out of such a contract you would need to prove that you have been deprived of ‘substantially the whole benefit of the contract’. And whilst the delay in completion has clearly been inconvenient it is still possible that you could progress to completion and move into the property. Further, the fact that you have paid a deposit means that you have ‘affirmed’ the contract and once such a contract has been confirmed it cannot be reversed.

Your only hope of freeing yourself from the contract would be to prove misrepresentation on the part of the builder, in so much as he gave you an estimated completion date and then failed to complete within the stated time frame. The success of this would depend though on whether or not the contract contained a ‘non-reliance’ clause.

What is certain is that you need to take legal advice as soon as possible. You should therefore make an appointment to see a solicitor who specialises in civil litigation.

Article 01/07/2019