How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Alex J. Your Own Question
Alex J.
Alex J., Solicitor
Category: Property Law
Satisfied Customers: 3844
Experience:  Two years conveyancing experience.
Type Your Property Law Question Here...
Alex J. is online now

We signed a reservation agreement with Persimmon new

This answer was rated:

We signed a reservation agreement with Persimmon for a new build. We are at the point where we can exchange contracts. The problem is the reservation agreement stated service charges of £116, but recently we discovered and confirmed that this is £116 + £164. Persimmon is unsympathetic and refuses any form of compensation as a show of good will. We have not had any discounts and paid full price including extras. We are uncertain if we want to do business with Persimmon and are afraid we might loose a lot of money if we decide to back out. We feel that we have been lied to and treated unfairly. What can we do?
Thank you for your question and welcome. My name is ***** ***** I will assist you. Have you exchanged contracts? How much have you paid? Do you still want to proceed with purchase even with the increased service charge? Kind regards AJ
Customer: replied 1 year ago.
Hello. We do want to proceed. We have paid £500 reservation fee, £1860 upgrade extras (stove, lighting etc.) We have not exchanged yet, although everything is in place to exchange. The problem is that we were lied to about the charge, and as a result dedicated funds and time to buying this property. Now Persimmon is saying we should just pay it or cancel, in which case we loose a lot of money. Both options seem unfair.
Customer: replied 1 year ago.
Is there no consequence to the fact that they provided false information on the reservation agreement. The service charge is 2.5x more than they stated.
Hi, Thank you. I would suggest you write to them as follows:- Say they have clearly misrepresented to you the facts upon which the purchase was to proceed, and the sums payable for a service charge;- This misrepresentation has induced you into signing something you would have otherwise signed;- Say that if they do not immediately return the deposit you reserve the right to:(i) Recover the sum in the county court;(ii) Complain to the Financial Ombudsman​(iii) and/or complain to Trading Standards.- Say that their conduct has been nothing more than a sharp practice and you have no doubt that have deliberately misled you into signing something on which they cannot deliver.- Say if you do not hear from them within 7 days you will take further action without notice.If they do not offer compensation you will have to consider suing them or complaining to the Ombudsman.Do you known anyone that has had the same issue? Kind regards AJ
Customer: replied 1 year ago.
I do not know anyone else who had the same issue. I am just afraid that we loose the house...we searched for over a month to find something workable. If we write a threatening letter can they decide to just not sell to us?
Hi, Thank you. Working on the basis that you want to complete on the property, if you sent them a threatening letter, they could refuse to exchange but it depends what the reservation agreement says. Clearly they have made an error, and if they are charging you this service charge, presumably it is the same for everyone? You may be able to negotiate a discount, but going forward you would have to accept eventually that this is what everyone is paying. What figure would you accept as a discount? You could register your grievance in writing, if they do nothing about it, you can always bring it up again once you have exchanged.
Customer: replied 1 year ago.
We have already sent a polite email explaining the issue and provided them 4 options which we would be happy with. Each about the same cost to them as 2% of the sale price. The reply was an admission of guilt but 0% movement on any type of compensation.Ideally we would want an apology some amount of compensation (even 1%) of the sale price. I am trying to figure out the best way to achieve this goal without loosing the house. The reservation agreement has already gone past the due date, party because we waited 2 weeks for a reply from Persimmon.The plot we are looking at is unique because the parking is located on the same area as the block of flats next to us. So our plot has 2 service charges £116 + £164.
Hi, Thank you. Do you have a copy of the reservation agreement you can send to me? Kind regards AJ
Customer: replied 1 year ago.
Customer: replied 1 year ago.
I hope a zip is ok...else I can send them individually.
Thank you. I will review this and revert to you. Please do not be concerned if you do not hear from me right I away, I will respond as soon as I can. Kind regards AJ
Customer: replied 1 year ago.
OK. Thanks.
Thank you AJ
Customer: replied 1 year ago.
Hi, till what time do you work today? Should I expect the reply tomorrow?Thanks.
Hi, Thank you. I online sporadically throughout day. I will respond by tonight. Kind regards AJ
Hi Thank you. There is nothing in the reservation form that gives them the right of termination. I would note that it does say the service charge information is only an estimate. How realistically how much compensation would you be happy with?
Customer: replied 1 year ago.
About 1% of the sale price, which is a little less than £3000 and would cover the extra service charge for about 10 years leaving room for service charge increases.
Thank you. You are not going to be able to force this price reduction without putting the whole sale at risk. The reservation is still just a reservation which is "subject to contract". When you paid the initial deposit, did they put in writing anywhere that the service charge would not be likely to change?
Customer: replied 1 year ago.
Explicitly no, but the consumer code for home builders has a section stating that there must be a description of service charges and an estimation of their cost for those services in the reservation agreement. The description on the reservation stated (N/A Not Apartment) with no cost as it apparently was not applicable. So I think there is a case here to argue, but as you say, nothing seems to stop them from just backing out. Do you think I could take my case to the consumer code for home builders? They seem to have some tribunal but am uncertain if that means we can still loose the house. Do you know anything about it?
Hi, Thank you. The problem is the consumer code, is not law it is just a code and guideline to protect consumers. You have not actually had a breach of contract and if you push this issue they may decide not to contract with you on the sale. That is why my suggestion is to exchange contracts and then pursue this through the financial ombudsman (or Trading Standards). It is a risk but both these organisations can award compensation and have the power to protect consumers.
Customer: replied 1 year ago.
I see, thanks for talking me through it. Will have a chat with the wife and then make a decision.
Hi, No problem. If I can assist any further please do not hesitate to contact me. If you could rate my answer in the mean time I would be most grateful. Kind regards AJ
Alex J. and 2 other Property Law Specialists are ready to help you
Customer: replied 1 year ago.
OK, Kind Regards