Developer wins £133,000 in landmark ruling on flats
THE owner of the city centre's £12million Zero 4 apartment block has won a landmark court case against one of the people who reneged on buying flats.
The High Court, in Bristol, has ordered the person to pay a whopping £133,282 in damages, costs and interest to Plymouth's Prestige Homes South West Ltd, after pulling out of a deal to buy two Zero 4 flats.
That person will have already lost a deposit, and does not have the flats any more because the contract was rescinded.
Prestige Homes, part of the London and Westcountry Estates Group, said the result was only what it had been expecting.
It is also dealing with about another 20 people who backed out of deals after buying off-plan.
They are among about 30 people who initially paid deposits, on 54 flats, but tried to walk away when property prices started to tumble in mid 2008.
Some people came to an agreement with the firm, but others are being sued.
London and Westcountry Estates finance director Matthew Hockin said another eight cases are on course for a court hearing in February.
But he said that, although cases can differ, the recent High Court decision sets a precedent.
"We have had several telephone calls to arrange a meeting for a settlement figure," he said. "We are trying to settle amicably. If they can settle it's in their interest. We don't want to go to court for anyone."
The Herald revealed in July 2008 how purchasers were getting cold feet and trying to pull out of contracts at the nine-storey Zero 4 tower in The Crescent.
The contracts should have been completed in June and when this did not happen it cost Prestige Homes cash.
Mr Hockin said the firm would never have started work on the building had it not first bagged 55 exchanged contracts.
He said the firm was going to court to secure 'loss in value from (the deals) not completing.
"We had to keep (the apartments), relet them and refinance.
"The cash we were expecting last summer did not arrive. We had to go through the court route to protect our position.
"A lot of people think you can lose your deposit and walk away. But once you have exchanged contracts you are obliged to complete. For them to walk away is unreasonable.
"We have been watching other cases, and the court has found in favour of the developers."
Mr Hockin said that many people made money when the property market was rising and should have 'bitten the bullet' when it fell. He said they could have rented out the flats and 'waited for the market to come back'.
Prestige Homes has let most of the flats in Zero 4, after selling just 18.
Only nine remain empty, which Mr Hockin said gives the building a 91 per cent occupancy rate.
He said the building was virtually completed now, with just some 'cosmetic' work to be done, and a 'couple of penthouses to finish'.
"We still have to fit out our ground floor retail space," he added.
50 Comments
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by anon, plymouth
Saturday, January 09 2010, 4:53PM
“Interesting story - why was the completion certificate not put forward at the start?”
by james, Yealmpton
Tuesday, December 15 2009, 9:58AM
“Perhaps you could call it "Sub Zero 4"”
by Nigel, Plymouth
Tuesday, December 15 2009, 9:43AM
“A book eh, can't wait for that .... I would put a deposit down for one, but only if you can guarantee that it will be ready in time ........ hopefully the cover won't fall off because it hasn't been secured correctly ..... maybe Waterstones could pile all the covers up in one corner until they can be put on correctly ............”
by Matt,, Yealmpton
Thursday, December 10 2009, 1:44PM
“Justifyingly, the actual truthful facts of this case will be told by the TV Programme ' New Homes From Hell ', which is due to be aired very soon, and the book currently being written by one of the purchasers who pulled out, and not by the Herald, who for some reason seem very biased with this case ?”
by sue greenwood, plympton
Wednesday, December 09 2009, 6:59PM
“You miss the point. It was not an agreement, it was a contract which clearly stated that if the flats were not fully ready for occupation by a date in mid-June then individuals were entitled to a return of their deposit. This is clearly the case and the individuals concerned have ample evidence to back this up. Don't think the judge will see this as mere fluff as he has already awarded to individuals in similar cases.
Fortunately, the case will rest on facts and not luck.”
by Winnall, Buckfastleigh
Wednesday, December 09 2009, 12:44PM
“These "London Based Experts" are on a two way bet.
They make whatever the result.
Oh, and I hate to correct you, but the issue is not if the developers stuck to an agreement but if they stuck to a contract. Anything else is mere fluff.
Good luck in court, you are going to need it.”
by sue greenwood, Plympton
Wednesday, December 09 2009, 10:49AM
“Several London based experts are happy that the investors are on solid ground. Whether they bought to sell on for a profit is not the issue. The primary issue is:did the developers stick to their side of the agreement. That is why we are going to the High Court to get a ruling.”
by Winnall, Buckfastleigh
Wednesday, December 09 2009, 10:08AM
“For those waiting for the court case in 2010 I think you will be disappointed. I also think you will get all you deserve.
BBC News. 8th October 2009.
http://news.bbc.co.uk/1/hi/business/8287828.stm
Quote:
"There is a worryingly widespread and entrenched belief among buy-to-let investors that if they decide to withdraw from a purchase for which they have exchanged contracts, that only their deposit is at risk," says Mr Raj.
"The legal position is quite clear. They are legally obliged to complete on the transaction.
"Damages are not even restricted to the difference between today's market price for that property and the price they contracted to purchase at."
The legal term of this process of forced purchase is an order for "specific performance" - an injunction granted by a court which has fairly broad discretion.”
by sue greenwood, Plympton
Wednesday, December 09 2009, 9:28AM
“For the information of greenarmy: The derogatory comments were actually started by David, at 0919 on 8 Dec. I followed on after countless others had commented on the material state of the building and also based on my own experience in mid-June last year.
I aree certain investors have been 'dealt a lesson' and have buckled under the pressure. The remainder are made of sterner stuff and are eagerly awaiting the High Court trial in Bristol in 2010.”
by GreenArmy, Plym
Wednesday, December 09 2009, 8:51AM
“Sue Greenwood you shall be unable to dish any dirt on myself as you don't have any. You started the derogatory comments regarding mine, and countless others, home. There are lots of students living in Zero 4, in apartments Mummy and Daddy have bough for them. If the building was so bad, why is it 91% occupied? There are only 9 apartments left to fill. As others, not me, have stated, once you have exchanged you're bound by contract. No one was compalining when they thought it was going to make them a buck or two. These are the risks you take and investors have been dealt a harsh lesson. Learn from it.”