UKC

Private sales and deposit refunds / disputes

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 Climber12345 08 Jun 2021

I’m a regular poster using a separate account due to the questions I’m asking.

We sold a boat recently and generally when buying one you have a survey completed to make sure the Hull is sound (buyer foots the cost of the survey and taking the boat out of the water). A deposit is paid which is refundable if the survey comes out with major problems not known at the time of offer. If it doesn’t then the sale either goes ahead as planned or the buyer leaves the sale and loses their deposit (though they own the survey).

The buyer had to self isolate and didn’t want to go ahead with the survey which we had booked for him. He wanted to delay completion by 2-3 weeks and see if he developed Covid and if he would be still okay to purchase the boat (I.e. didn’t die - though he was fully vaccinated prior to this) which didn’t work for us for various reasons, not least because it wasn’t going to end in a definite sale and we had other costs which we would incur over that period.

We had already committed to the survey which was going to cost approximately £700 to have done (we only had 1 days notice of cancelling on a Sunday) so we paid for this. We probably could have pulled out but the evening before would be very late to do so. The buyer advised us to try and find other buyers given he couldn’t commit to the purchase and we were in a rush. He also said (on the phone) he understands he would lose his deposit and was okay with that.

We booked last minute viewings which he was aware of and didn’t manage to sell it before the survey. If we did manage that we said we would refund the deposit as the new buyer would cover any costs.

The survey went ahead as planned and was great. We let the original buyer know but never heard back. We later found new buyers and let the original person know. He said that’s fine but let him know if it falls through.

All completed as planned. But the original buyer is now getting solicitors involved to get his deposit back (£1000).

We had no formal contract in place but I do have written evidence of:

1) agreement of purchase price

2) agreement of deposit amount

3) agreement that deposit was refundable only if the survey was unsatisfactory 

4) agreement that the costs of survey would be met by the buyer

5) agreement that the remaining balance would be paid on the date of the survey (if it didn’t fail)

6) message from him the day before survey saying he is going to ask us to delay (details were talked about on the phone)

7) message letting him know the results of the survey out of courtesy (he may have wanted to go ahead)

8) message said that as we hadn’t heard back we have found other buyers (1 week later)

9) message from him (4 days later) saying that’s fine but to let him know if it falls through as he would go ahead with the original purchase

10) few weeks of silence and then messages demanding the money back and that his “professionals” are sending us a letter

His view is that as we sold the boat we should pay him back. 

My view is that I accept its bad for him having to self isolate (track and trace) but we had to foot a lot of bills which he was going to pay for. We took the boat significantly further than we wanted to for him (3 full days travelling) as he didn’t like the boat yard we suggested. We had to spend another few weekends and lots of evenings dealing with viewings and enquiries (20+ hours of our time) when he Backed out. To me that’s the entire point of a deposit - to show you’re serious and to protect the seller from incurred losses.

I’ve contacted citizens advice and have some things to follow up on tomorrow, but I wondered if anyone could offer any advice.

We guess that this would go to small claims court if he did indeed follow up which could result in higher costs if we were to lose?

I've no idea on the legal standing but I feel like we’re in the right legally. However I would have no idea how it would actually go in a court - and don’t really have a desire to find out!

My work means that a CCJ would mean I could no longer work. Does small claims do anything similar?

Is it worth the hassle? We could pay him back and chalk it down to experience, but he was trying to be so manipulative and bully like in our dealings with him we think this is just another example of him trying to get his own way whilst in the wrong.

Could we pay him in coins if we did so?

Post edited at 17:42
 Jamie Wakeham 08 Jun 2021
In reply to Climber12345:

> We guess that this would go to small claims court if he did indeed follow up which could result in higher costs if we were to lose?

Not very much higher - the point of the small claims process is to keep costs to an absolute minimum.

> I've no idea on the legal standing but I feel like we’re in the right legally. However I would have no idea how it would actually go in a court - and don’t really have a desire to find out!

It's surprisingly informal.  If you have written evidence that he agreed to a non refundable deposit then I would guess your chances are pretty good.  IANAL.

> My work means that a CCJ would mean I could no longer work. Does small claims do anything similar?

You only get a CCJ registered against you if you lose and then do not pay up within a reasonable time period (IIRC, 30 days).

 Climber12345 08 Jun 2021
In reply to Jamie Wakeham:

> It's surprisingly informal.  If you have written evidence that he agreed to a non refundable deposit then I would guess your chances are pretty good.  IANAL.

thanks for the reply. Good to know about the CCJ.

I think the thing is is that he thinks it should have been his sale as he still wanted to buy (just with a delay) assuming he was okay. 

To me you either meet the original terms, successfully negotiate something else, or risk losing out.

But also IANAL…

In reply to Climber12345:

This has no legal basis at all but it is how I would deal with it and take my chance if it goes to court.

Did you increase the final sale price because you had a valid survey or did you sell it for the original price?

If you got the survey cost back by increasing the sale price the I would give the guy the money back, if you paid the money yourself then I would tell him to do one. 

In reply to Climber12345:

I am also not a lawyer and indeed totally inexperienced in this so maybe what I am posting is a question for Jamie. 

Which is

What happens if the OP simply does nothing at all? No response to the guy or his solicitors? 

 Jamie Wakeham 08 Jun 2021
In reply to Blue Straggler:

Well, a solicitor's letter is simply that - a letter.  Nothing will happen to you if you ignore them; at the very worst it could be used to show that you refused to engage, which, if the case went to court and you subsequently lost, might not dispose the judge kindly towards you when it came to setting costs. Exactly the same is true of any debt collection agency's letters prior to a court case.

The ball is very much in their court.  They would need to issue a claim, and once you receive a genuine letter before claim then it is best to respond - in this case simply to deny the debt.

If you are sent actual court papers and don't go then the case will be heard in your absence.  If you lost and then did not pay then in 30 days they could obtain a CCJ.

In reply to Jamie Wakeham:

Thanks. There was an ulterior motive to my question and I was not going to detail it as it is a distraction from the OP, yet it feels rude not to. Due to corporate bureaucratic nonsense, my office has a massive outstanding overdue bill to pay to British Telecom, which has been handed to a debt collection agency (we are a multi billion dollar multi-international - the money itself is nothing - but our labyrinthine processes in tandem with BT's intransigence regarding re-issuing past invoices, means that it's just been allowed to escalate ridiculously). So, with a debt collection agency being involved, there is a possibility of court action. The weird thing is that only British Telecom have the name of the (token) account holder at my end! But they have my name and my office address which is the only reason I know what is going on, as I get all these paper invoices. 

Anyway, just a courtesy explanation there with apologies to the OP for going off topic. 

In reply to Climber12345:

I think you would be better off genuinely totalling up your additional incurred costs (I'd say your time doing viewings was not the buyers fault, you'd have had to have done that had the initial buyer never existed.).

Subtract yours costs from the deposit and offer the rest back. Seems more fair to me. 

2
 artif 09 Jun 2021
In reply to Climber12345:

Its a boat, if he can't afford to lose the 1k deposit he can't afford a boat.

Unless you get a letter from the court, forget it. 

3
 gazhbo 09 Jun 2021
In reply to Climber12345:

How did your actual buyer get hold of the survey, or did they pay for a separate one (or proceed without)?

Post edited at 10:38
 Philip 09 Jun 2021
In reply to Climber12345:

I think you should pay him back.

You sold the boat, which means someone else paid the survey costs. What are you keeping his deposit for? A deposit secures the option to buy - it didn't secure the option for him, regardless of whether he accepted what was being said to him.

I think you need to look at it objectively. He got nothing for his deposit, you sold the boat.

2
 Climber12345 09 Jun 2021
In reply to gazhbo:

> How did your actual buyer get hold of the survey, or did they pay for a separate one (or proceed without)?

We commissioned a transferable one and got some additional work (recommended on the survey) completed on the boat whilst it was out of the water.

The new buyers came once this was all completed and made an offer accordingly knowing that it was ready to cruise away and nothing additional needed completing.

Prior to this any interest had an unknown element along with some work that they knew would need completing.

 Climber12345 09 Jun 2021
In reply to Philip:

I personally wouldn’t say he got nothing. He got the option to buy the boat which he chose not to, he got 3 days of cruising from us as he wasn’t happy with our preferred place (no real reason for this), he got us to cancel a large number of viewings based on the fact he committed to buy and complete by a certain date. Amongst this we also rejected other offers including some who didn’t want a survey and would have paid instantly.

Nothing physical, no. But he got everything that was agreed.

We then lost out on significant time, additional insurance costs, additional mooring costs.

Though I do largely agree with your post, but I don’t like being threatened with legal action either by someone we bent over backwards to help before the sale. Especially as this was the first we have really heard from him after he told me on the phone that he accepts he dropped out and would lose his deposit…

 Climber12345 09 Jun 2021
In reply to Climber12345:

I know this is irrelevant to the argument really too, but he was also trying to pressure us to take the boat down south for him so he could use his preferred surveyor which happened to be where he wanted to keep it (14 days cruise) and after agreeing to a deposit and us cancelling other viewings, he tried to back out of paying it saying we should just trust him that he would turn up and pay on the day.

Also getting annoyed when we weren’t happy for him to attend the survey due to quarantining and the fact he would put all the staff at risk.

It’s things like this that make us feel rather strongly about him trying to bully his way to his desired outcome once again.

 BennoC 09 Jun 2021
In reply to Climber12345:

You could write back, agree with them that it's unfortunate, but say that you think you do not need to return the deposit. Also say that you'd be prepared to defend your position in court, and that you've taken legal advice.

 elliot.baker 09 Jun 2021
In reply to BennoC:

> you've taken legal advice.

Yes from UKC & Partners LLP

🤣

 Philip 09 Jun 2021
In reply to Climber12345:

The way I see it you have 3 options:

1. Low stress, give him his money. Optionally include a shitty letter telling him what an arse he is and that you're out of pocket by £X as a result of this.

2. Calculate how much you are actually out of pocket vs expected selling costs. If he had pulled out earlier and had his deposit back would you have still had costs. Document them fully, write him a letter detailing the amounts you have kept and refunding the difference of his deposit. Prepare to then have a subsequent battle.

3. Write a short note saying you have all the details of the agreement, he agreed that he forfeited the deposit and this has been used to cover the additional costs associated with relisting the item. Again, prepare for it to go on.

Remember if it goes to court it won't be as clear cut as your one sided view we see. Is it worth your stress.

In reply to Philip:

There are, of course, infinite options you could pursue, but covering yourself in jelly and calling yourself Susan may not be very helpful.

I’d be tempted to do nothing and see what he does next. The key thing mentioned above is the stress in all this. Once you get on the path it’s hard to get off. 
Read bleak house
 

 Jamie Wakeham 09 Jun 2021
In reply to Climber12345:

How much did the survey actually cost, and was it re-used for the eventual buyer or did they commission their own?

In reply to Climber12345:

I'd keep a detailed breakdown of the time line and costs, along with any supporting evidence (receipts, dates, times, distance travelled.)

You mentioned 3 days cruising. You could look at the price of a narrow boat hire for 3 days and include that as a cost. You can also estimate the time cost to you, e.g. use the minimum wage as a rule of thumb for your free time. I'd see what citizens advice have to say and be prepared to take additional legal advice from a professional. This is where all your carefully collated evidence will come in handy. Then if he does take you to court, you can present that documentation, against his vague 'I want my deposit back' claim.

There is a saying that goes along the lines of: 'both sides go into court as pigs and come out as bacon.' You may win, but it will still cost you.

 wintertree 09 Jun 2021
In reply to Philip:

> 2. Calculate how much you are actually out of pocket vs expected selling costs. If he had pulled out earlier and had his deposit back would you have still had costs. Document them fully, write him a letter detailing the amounts you have kept and refunding the difference of his deposit. Prepare to then have a subsequent battle

Putting aside annoyance at the person who apparently reneged on their word - but no written agreement - this would be my preferred option.  I would have a solicitor write a brief contract for the aggrieved to sign that notes that by signing the contract they agree, upon receipt of the partial refund, that they relinquish any and all right to bring further action against the OP.  I would not be generous towards the aggrieved when estimating costs to subtract from the deposit - incidental costs would be included - eg lost time at my effective hourly rate.  I wouldn’t include the costs of repairs as they are effectively covered by the later sale based on a value agreed after those repairs.  Survey cost - it was of use to the aggrieved in making their decision, as evidenced by placing their deposit (assuming it went survey > deposit, if it was the other way around, discount this sentence and the next).  If the survey was also used by the actual buyers, charge the aggrieved half the survey cost.


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