Cancel buying a new-build property

Hi All,

It is not directly relating to renting but more for Landlord’s investment plans hope i can get some advice on from you guys :).

Basically, there was a property that is off-plan exchanged but will complete in the coming year.

There is a term in the contract that if it passed long stop date then i have the choice of cancel the contact get all the money back including the reservation fee.

I exercised that right to cancel but despite my solicitor’s effort contacting the agent’s or developer’s solicitor they won’t response to the refund on the reservation fee/

I have personally calling them but they always refer me to their solicitors.

Could I ask if there is anything the can do? It is a big amount for a reservation fee.

Any suggestion helps!


Bit late now sorry but buying off plan is a huge risk ,They can promise the world. Are their offices in this country? Can you go to their office? . How much checking on them did you do?

It was a local/small one for just one development that has only a few dozen flats.

are you in contact with any other buyers/

as soon as the extract was cancelled, this flat is already sold to some one in the waiting list. the 10% exchange amount got refunded but the reservation fee wasn’t where the contract states any must be refunded. the agent just kept avoiding responding to anything.

what checking do I need to do? i can see their company house it is a very small agency almost like a contractor 2 people in this company. They have an address that i’ve never been to, but not sure seeing them in office will help

are they still in that office? Is it open? go to the builders offices? Have they been wound up/

gov website companies house should tell you if they are active

what do you mean by wound up? Basically they picked up a call once and said they will get the accountant to sort this out for me but then the number becomes unreachable. Called someone else again, they said refer to their solicitor who is avoiding as well.

they didn’t say we are not eligible for the refund but just deliberately ignoring us.

They are active so don’t know why they don’t get back to me, just tell me either they can give it or not, obviously it doesn’t do them any good to bury their head in the sad.

I think that PropertyTribes might be the best forum for this question as it deals mainly with purchase and development issues and there are specialist solicitors who also post there. I suggest you join and post the question there.

By wound up I mean has the develpoment firm gone bust , been wound up that is, if its a limited company

How much was the reservation fee?

If less than £5,000, issue a claim in the small claims court, assuming you are 100% entitled to the refund, then there’s no contest. Try writing to them and their solicitor first, making clear this will be your next step if they do not make arrangements for the refund within 14 days.


The reservation is 3000 and spend 700 on solicitor sending e-mails and give warnings. Before the Solicitor moving to the next step which is bill me for another 1000+ moving to their litigation team i stated the elephant in the room that obviously it is not worth the cost. So my solicitor gave a genuine advise either just physically meeting them up and try to get it or go through a small claim court which might cost maybe 200 pounds?

although the reservation states it is none refundable but the contract stated anything should be refunded if the contract is cancelled. So contract should over rule this and also “refund” in that sense probably is when you changed your mind right after reservation the refund will be lost.

You said previously that you were entitled to a refund, but from what you’ve written it’s not so clear cut. I’m afraid I cannot now advise any action without seeing all the conditions of the contract.

Does your solicitor state, with all confidence, that you have an ironclad case?

Is building proceeding or is it still an empty plot ?

to correct myself, when i have paid the reservation fee at the very beginning, there was a small form to sign that i have paid and the reservation fee was non-refundable. Later comes the contract that was exchange and it has clause to refund the reservation fee if they passed the long stop date and the buyer want to cancel it. So my solicitor still thinks contract is above the form I signed and thinks that small claim court would work.

Not sure how strong the signed reservation form at the beginning would affect the case, hence i am here to see advice on this matter.

Any thoughts?

I’m no expert but if your solicitor thinks you have a case then for the sake of another (relatively) low fee for a small claim you might think it’s worth a shot to go for it. Manage it yourself so you are not paying even more to the solicitor.

I’m not a lawyer, but I would agree with your solicitor, being that the full contract terms take precedence over a preliminary reservation fee agreement since, as you say, the contract makes provision for the refund against the companies failure to meet its contractual deadlines.

A small claims court action is relatively cheap, assuming your claim does not exceed £5,000, so you have almost nothing to lose by pursuing it.


Much appreciated for your confidence Chris, I am in the process of submitting the Small Claim Court form. Although it has been 4 months due to a few personal things to do in the meantime. I hope returning to this at a 4 month delay is not too late.

If I assume everything you have said to be true and the contract states your fee should be returned, then you have 6 years from the date of the breach in contract to make a claim for contract disputes.

So 6 years from the date they should have (or you believe they should have, as this case has not been adjudicated) refunded you the reservation fee.
The 4 months you have waited will not impact your ability to persue a claim, however, you should send a ‘letter before action’ to the company detailing your intention to use the court system should the matter not be resolved in (at least) 14 days.

It is not wise to start your claim if you can’t evidence to the Judge that you tried to resolve this informally and gave the respondent fair notice of your intentions.