Q: My daughter recently embarked on the purchase of a £330,000 new flat from an NHBC-registered builder, in the process spending £1,500 on a nonreturnable reservation fee and £2,500 in legal costs and other sundries. After examining the proposed lease, her solicitor advised her not to proceed unless a clause relating to damage or destruction of the property was altered. The housebuilder declined to do this (it says the solicitors of all other purchasers have accepted the lease) and my daughter refused to exchange. The builder will not refund her money or compensate her for her losses. What can she do?

A: Your daughter cannot force the builder to grant a lease in any particular form. The law in England and Wales is firmly based on the principle that until contracts are exchanged, neither side is bound to enter into a lease at all. In theory, when negotiating a new lease, either party can ask for whatever terms it wants; but in practice housebuilders impose standard-form terms. Indeed, the housebuilder will usually be required by the leases of other flats to grant your daughter a new lease in the same form as the rest. The remedy of a proposed leaseholder who doesn’t like the proposed terms is simply to walk away. Whether your daughter can get back her reservation fee depends largely on the terms of the agreement she signed at the time. It may be that the agreement allows her to get back all or part of the £1,500 or that you can imply a term into the agreement that the builder had to offer reasonable terms.

If the housebuilder said anything that was untrue, your daughter might be able to recover the £2,500 in legal costs and sundries as damages for negligent misrepresentation. Obviously it’s unlikely the builder or the estate agent mentioned this particular obscure clause; but you should carefully check the sales documents to see whether anyone said anything in more general terms about the form of the lease.

Mark Loveday is a barrister at Tanfield Chambers (020-7421 5300). E-mail your questions to: property.consumer@thetimes.co.uk

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