Buyers and sellers of land often want to avoid, or get out of, the contracts they’ve entered into. The circumstances are varied. However, two of the most common reasons are misrepresentation and a change in the market since the contract was made; sometimes the two overlap. A good example of this in recent times is off-plan sales and purchases of residential property. A purchaser may have contracted to purchase one or more flats off-plan only to find that the market values fall away before completion. This can be particularly problematic if the drop in value means that the purchaser is not able to obtain a mortgage offer they were relying on to fund the purchase. Another, more every-day, example is where a purchaser contracts to purchase in reliance on a statement he later claims to be false, eg in relation to a boundary issue or the threat of development. In such cases of alleged misrepresentation, the question arises as to whether the contract can be set aside and the deposit returned to the purchaser.
These issues are particularly prevalent in London at present because of the over-supply and falling prices of newly built homes. There is obvious tension between home builders and purchasers with the former intent on completing contracts and the latter keen to have them set aside and their deposits returned.
We advise and represent both sellers and buyers in claims relating to the specific performance and avoidance of contracts, deposits and damages.