A young Co Kildare couple have called for new legislation to prevent builders from raising the price of houses after deposits are paid. The call follows a Circuit Court ruling that a developer had not acted illegally when he increased the price of a house by £20,000 after accepting a deposit.
At Naas Circuit Court yesterday Judge Jacqueline Linnane dismissed a civil case against Greenhills Construction Ltd and Loughlion Developments Ltd.
Stephen and Annette Butler, O'Higgins Terrace, Curragh Camp, took the action against both companies over a house at the Curragh Plains, Kildare town.
Judge Linnane said that although she had "considerable sympathy" for the couple, she had no choice but to dismiss the case. She agreed with a High Court decision by Judge McCracken in a similar case, in which he said that although he did not morally agree with the builder's action, legally the defendant was entitled to do what he did.
Judge Linnane ruled that the Butlers did not have a binding contract with the builder. A booking deposit did not constitute an agreement. The couple paid a £1,000 deposit on a three-bedroom semi-detached house on September 12th, 1997. The house was one of six being offered at a "special" price of £69,900. The site foreman, Mr Tom O'Doherty, issued a receipt and marked the site "sold" on the plans.
Mrs Butler asked him to confirm the house would be sold at £69,900. Mr O'Doherty wrote "House price £69,900 - fixed" on the receipt, which also contained the phrase "Subject to contract". It was only when the contracts were issued to the plaintiffs' solicitors, Boyce Burns and Company, the following May that the couple discovered the price had been raised by £20,000 to £89,900. Mr Sean Melia, managing director of both Greenhills Construction and Loughlion Development, said he decided to increase the price just before beginning construction on the houses. This was due to rising building costs and changes in the market, he said.
Plaintiffs' counsel, Mr Ruairi de Briuir, claimed the defendant had reneged on a verbal agreement and had gazumped an "unsuspecting" young couple.
Defence counsel Mr John Aylmer said his client had acted within the law. There could be no binding agreement until the legal documents were signed by both parties. Judge Linnane made no order as to costs and was "happy" to learn that the booking deposit had been returned.
Following the decision, Mrs Butler said she and her husband now had little or no hope of owning their own home. The legal costs would virtually wipe out their savings and they would "have to start all over again". "It's now up to the Government to change the law," said her husband. The couple indicated they would not be appealing the decision.