De Trafford Third Party Recovery: An Update

The recent financial collapse of multiple DeTrafford property development companies has
significantly impacted purchasers. As they navigate the consequences, a glimmer of hope arises as
the wheels of the third- party action is firmly in motion. Read our previous articles here and here for
the history of this case.

The Rise and Fall of DeTrafford:

Over the past couple of years, DeTrafford has experienced a string of issues. These have left the
future of the developments in administration, and remaining trading companies, hanging in the
balance. The troubles began with the news that the proposed 421-home development at Salford
Quays, known as Wavelength, had fallen into administration. This left purchasers with nearly £11
million in unpaid dues. With many of them questioning the financial mismanagement that plagued
the project.

Further turmoil followed as other DeTrafford companies faced similar fates. DeTrafford Sky Gardens,
responsible for a 13- floor development in Chester Road with 166 flats, went into administration in
early 2023. Alongside it, sister companies such as St George’s Gardens, City Gardens, and
Wavelength also found themselves in dire straits, leaving a trail of unpaid debts.

Third-Party Recovery in Motion

While the Administration process is expected to be lengthy, spanning approximately 3-5 years, the
third-party recovery offers a more immediate opportunity for purchasers to safeguard their
positions. It is crucial for affected parties to act promptly to secure their funds outside the
Administration process, as dividends are expected to be minimal.

NHBC Deposit Protection Update

The NHBC deposit protection has been addressed in the Administrators Progress Report. NHBC
clarified that: “investors will only be covered in the event that they signed up to the policy
individually, cover is not automatic and that no claims will be processed by NHBC until such a time as
the outcome of the Administration is confirmed”.

Additionally, the maximum coverage is capped at 10% of the purchase price. This update emphasises
the importance of understanding the NHBC position, as it likely applies to other developments in

Time Barring Concerns

Time barring is a crucial legal consideration for purchasers. Generally, there is a 6-year window from
the date of the breach of contract to bring about a third-party claim. As most purchasers signed
contracts from 2018 onwards, the risk of being time-barred from taking future action becomes real
from 2024. Waiting for dividends from the Administration process, which may take 3-5 years, could
jeopardise the ability to take further action.

CS Conveyancing and Versus Law

CS Conveyancing and Versus Law, among other conveyancers, were recommended by De Trafford to
purchasers for the acquisition of their apartments in various failed development schemes.
Substantial evidence indicates that both CS Conveyancing and Versus Law were negligent and
breached their duty to clients by committing a material breach. We encourage purchasers,
particularly those who engaged CS Conveyancing and Versus Law as their conveyancing solicitors, to step forward. We stand ready to assist them in the recovery of their deposits based on the evidence
at hand.

As the aftermath of DeTrafford’s financial collapse unfolds, affected purchasers are faced with
challenges and opportunities. Moreover, by staying informed and taking proactive steps, purchasers can better position themselves to recover their funds and move forward.

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