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James Mather
James Mather,
Category: Law
Satisfied Customers: 22629
Experience:  Senior Partner at Berkson Wallace
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Hi, please could someone help me regarding an issue I have

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Hi, please could someone help me regarding an issue I have with a property please?
We were trying to get a mortgage to buy a property last year, it was taking such a long time that we handed over a considerable deposit to the owners/builders to show commitment. I have been paying council tax on the property since last August. We did not move in to the house as we did not want to until the mortgage was finalised. We have no contract and have not signed anything and I believe they probably have not declared the money either. We had the mortgage declined and would now like some if not all of the money back and wonder is there any way we can do this? They are saying we have essentially rented the property from them, but as we have no paperwork or contracts have they done wrong by not declaring the money? What can we do?
What type of tenancy agreement do hey say you have?
Customer: replied 5 years ago.

They have just said they are keeping the money as they rented the property to us but we have no tenancy agreement and no documentation. We gave them the money to hold the property until we got the mortgage and that money was to be deducted from the property value

Did you move in?

How much money? Who is arranging the mortgage?

Have you got a mortgage now?

Customer: replied 5 years ago.

No we never moved in as we didn't want to just in case the mortgage was not approved (which it hasn't been). They transferred the council tax into our name though and we have been paying that and any bills (elec and gas etc) even though we were not in the property. We gave them £32k. My husband has the mortgage company information, I will find out for you now. And no we did not get the mortgage hence why we would like the money back. They are saying we won't get it back as we essentially rented from them, although we have no tenancy agreement and never lived in it.

You are entitled, on these facts, to the full
amount of money back because there is no contract to you to buy the house and
this is merely a deposit.

Under the Law of Property Act 1925, there is no
valid contract and therefore you are entitled to full refund.

However, being entitled to it and getting it are
two different things. If you paid it to the builder and the builder is a
limited company and the limited company goes down the tubes, then you are
hanging out to dry for £32,000.

I assume that your Solicitor had no indication that
you parted with this money.

If they won't pay up, you are simply faced with
issuing legal against the company. You then have to enforce against it

That really is all there is to it. You are in a
very precarious situation if the company has no assets.

A mortgage should never take more than 6 to 8 weeks
to arrange in any event.

Can I help further?

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The thread remains open for us to continue this exchange

James Mather and other Law Specialists are ready to help you
Customer: replied 5 years ago.

Thank you so much for that answer and your help so far. I have a couple of questions more if possible too please? Would you say it was worth our while to find a solicitor to deal with this and that it would not take more than the money we paid to resolve? Also, my husband just said to me he transferred the money from his account into the builder's account (which is a well established company with good assets), if they are saying we have rented from them should they have declared that money to a landlord deposit scheme or something? Thanks

I am not at my PC at the moment but will get back to you asap.
Customer: replied 5 years ago.
Hi again, just wondering if you have had a chance to look at my questions from earlier please?

Sorry, this slipped off my radar.

There is no deposit scheme for this. There is for
landlords holding tenants deposits, but not for a purchase deposit. It would
have been good practice to place it on deposit in a separate account nominated
as a trust account for you. However, it is not a legal requirement.

I think it absolutely essential that you find a solicitor
because they may just take more note of the solicitor. If you'd had the
solicitor before he would have advised you not to part with this money under
any circumstances.

Can I help further?

Customer: replied 5 years ago.
Thank you so much for all of your help. I will try to find a solicitor tomorrow.

I do hope that you get sorted.