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Having bought my first ever off-plan property in September 2015, the project ( Adelphi Wharf Manchester/Salford) is finally nearing completion (20 months late!)
However, after hearing no worthwhile updates for months, the developer two weeks ago demanded that the final payment had to be made yesterday (was only 10 days notice). This is based on having received a Certificate of Practical Completion from some relevant survey company.
Last week then I went to inspect the building and my apartment. The building is absolutely uninhabitable, as is my apartment. We needed hard hats, steel-capped safety boots to access the site and we were constantly stepping around construction vehicles and over obstructions.
My apartment has no flooring on either terrace and the terrace has not even been built yet. There is no carpeting in and the tiling isn’t finished either.
The developer though is saying that the contract requires final instalment to be paid once that Certificaye has been issued, and that the guaranteed rental (12 months at 6% net yield) will now start. I would rather have a finished apartment when paying 100%, rather than some rental income.
Has anyone out there had any similar experiences? When buying off-plan, has anyone else been forced to pay at what they consider an inappropriately early stage? What happens if I pay and then they never finish properly?
Check your contract payment is triggered on practical completion not actual completion. Builders focus on practical completion but occupiers want actual completion.
Chartered Accountant, Tax Advisor and Mortgage broker
(and BTL portfolio owner)
Sounds like the developer is running out of money to me. But the items you have specified would count as finishes... practical completion is for the structure and electrics and gas passed off if I remember correctly
Classic reason to be careful when buying off plan.Alarm bells should have been ringing months ago well before the 20 month delay. As mentioned it all depends upon the contract.Once again its important to understand the contracts and do the due dilly on the developer. Sept 2015 was when every one was jumping on the property band wagon, but they forget building takes time and with over runs you now face falling property values and probably paying over the odds.If you pay and it never gets finished probably means the developer goes bust and you will have to pay another developer to finish it off if you are lucky. These guys have you over a barrel as you are contracted to pay when requested and if you do not you could be sued anyway. Get legal advice to see if their are any loop holes in the contract.
One further bit of unwelcome news as well. The scumbags at the Local Authority will now, almost certainly, start charging Council Tax, and unless the legislation has changed its no use fighting them. We did, and its not worth the effort. As our solicitors said, " they do it because they can, because the crap legislation allows them to"
If the council try charging council tax on an uninhabitable property, challenge it, explaining why the property is uninhabitable and cc the local MP. Worked for me.
When I refurbished my own house I took the roof off, no water or electricity it was uninhabitable applied to have council tax suspended. An inspector came out and paid no council tax for 6 months whilst work was done. Was a pretty simple process.
Look up "practical completion" - it just means compliance with building regs, not actual completion.