Just when I think there isn’t anything else this industry can shock me with – coverage in the national press has revealed that Bovis Homes offered “bribes” of up to £3,000 to their buyers if they legally completed or moved into unfinished new homes on or before 23rd December 2016. This was done in a vain attempt to meet the City forecasted target of 4,170 completions for their financial year-end.
The “incentives” were offered to buyers just days before Bovis issued a profit warning, stating that 180 homes were “being deferred into early 2017” resulting in profits lower than previously expected. Equity analyst Anthony Codling at investment bank Jefferies, told The Times: “This will be where they are trying to make their targets. They would have been trying their hardest to complete those homes to get people moved in before Christmas. There is pressure from an investor perspective to meet the volume target and they will do what they can to meet those targets.”
Other analysts said that the cash incentives from Bovis were part of a failed attempt by the FTSE 250 company to meet City targets saying Bovis’ share price had “substantially underperformed the sector over the last seven years.”
Have Bovis Group attempted to deceive investors and the City as to the true year-end results of the Company, by pushing through legal completions (sales) on new homes that were not 100% finished at year-end? I am no expert on financial reporting regulations but more is here. Perhaps this is something that the Financial Conduct Authority [FCA] should be investigating.
All housebuilders pay compensation eventually if it is justified!
When they say, “We don’t pay compensation” they’re lying – they all do!
Is compensation justified? Well the answer is a resounding yes for many new homebuyers that have experienced the inevitable issues with their new home. This often requiring buyers to take time off work, or use paid leave to be at home to give builder’s sub contractors access to fix fully preventable defects with their new home. The general law also compensates new build homebuyers for distress and inconvenience related to defects in their homes.
When new homebuyers bring up the subject of compensation, I can guarantee the initial response from the housebuilder, be it the sales staff, site manager or the housebuilder’s customer care department will be: “it is not our company policy to pay compensation under any circumstances”.
A recent report released by the Legal Ombudsman shows a high rise in the number of complaints against solicitors – in particular against conveyancers. One of the most serious issues that has grabbed the headlines were reports of solicitors not paying the stamp duty on behalf of their clients. Whilst rare, this is fraudulant. HMRC, often many years later, are coming after homeowners for payment of the original stamp duty due with interest charges added on top.
Of the 7,500 complaints received by legal ombudsman in the survey, around 18% were concerned with residential conveyancing. It is thought that this due to a large extent, by the growth in the number of online conveyancers and so-called “tick-box, bucket shop style, call centre conveyancing services” often offering a conveyancing service for as little as £300.
Buying a home is almost always likely to be the largest purchase most people will ever make. It is a legal transaction and buyers and sellers need professional and qualified legal representation. Yet despite this, after looking at the other costs involved in moving home, many choose ‘cheap’ rather than ‘best’ when it comes to appointing a solicitor – a decision as the report highlights, many often deeply regret.
It is always best to have a solicitor who is local to you so that when there are issues they can be discussed face to face. They could be complex and if there is a problem you need a professional on your side to solve the problems on your behalf, not just part of a box ticking exercise. You may find there are issues years later when you come to sell the house that were missed by the conveyancer when you bought.
The advice is always to get a recommendations from people who have just bought or sold. Speak to them. Then ask yourself: Does the solicitor sound competent? How well do they communicate? Will they protect your interests? Feel free to negotiate on their fees but don’t skimp.
Finally, if you are buying a newly built home, never, repeat never use the solicitor “recommended” or “suggested” by the house builder. They may claim it will be “quicker” and “easier” but you can be sure there will be a conflict of interest. In addition, under the Consumer Code for Home Builders, Requirement 2.5 states that house builders cannot restrict your choice of legal representation.
After a a few problems and issues with his new home, despite the completion date being postponed by a month (6th December 2013), one unlucky buyer recently told us that Taylor Wimpey had constantly threatened him with legal proceedings on a daily basis. Amazingly Taylor Wimpey and both the respective solicitors allowed legal completion on his new home without the Help to Buy funding in place and later transferred to Taylor Wimpey – an underpayment shortfall of £44,000.
Mr K told us: “In the first week of January, we learned that our solicitor had not sent us the Help to Buy equity release form to sign. He played this down claiming it was a simple paperwork mix-up or oversight. Two days later, we received a call from Taylor Wimpey informing us that they are going to take us to court because for breach of contract as we have not provided the full funds on completion.”
“It transpired that the Help to Buy money had not been released to Taylor Wimpey and they cannot take our solicitor to court, they can only take us to court. The lady from Taylor Wimpey said that even if they did get the balance of the money, we had still breached the terms of our mortgage and they were going to report this to our lender and the mortgage would be revoked.”
“Next we then get a call from the lady who deals with Help to Buy (Radian homes) who inform us that the mortgage offer is incorrectly worded and needs to be changed, otherwise they cannot release the money to Taylor Wimpey. Our solicitor insists the mortgage offer doesn’t need to be changed, Help to Buy insist it does and in the meantime, Taylor Wimpey continue to call us on a daily basis threatening to take us to court.”
“Both Taylor Wimpey and Help to Buy say that our solicitor is incompetent. Our solicitor then suggests that they are both partly to blame as well. We are considering appointing a professional negligence solicitor to take over the file with Taylor Wimpey saying that if we did, that they would take us to court straight away.”