A group of property investors who lost their deposits after a developer succumbed to the recession before even starting work on a luxury block of flats have had their hopes of getting their money back boosted by a High Court ruling.
The 23 private investors, who had agreed to buy flats between 2005 and 2007, were left £357,800 out of pocket when the developer was first placed in administration and then dissolved, effectively ceasing to exist. They claimed under an insurance policy which had been put in place by the developer to protect 'off-plan' purchasers.
The investors sued the insurers after they refused to pay out under the policy, which was stated to protect them if the developer went into liquidation. The insurers argued that the technical wording of the policy relieved them of liability but, following a preliminary hearing, the Court in most respects preferred the investors' reading of the policy. Remaining issues in the case were adjourned for hearing on another day.
Buying off plan carries risks that a purchase of an already existing property does not. If you are intending to do so, we can assist you to make sure your financial and other risks are controlled. The existence of an insolvency insurance policy does not mean that a claim under the policy will be met without argument by the insurer.