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When buying off-plan doesn’t go to

What happens when you buy off-plan, and then your developer goes bust?

This was a question that was recently considered by the High Court over an ambitious development on Liverpool’s Old Hall Street.


Signature Living Residential Limited (in Administration) (“Signature”) bought a building on Old Hall Street, Liverpool (the “Property”) in 2015 with a plan for a mixed-use development to include 123 apartments. Some of these apartments were sold off-plan under agreements for lease.

Signature went into administration in 2020. The joint administrators agreed the Property for sale, subject to it being “unencumbered by security interests”. They applied to the High Court under the Insolvency Act 1986 for orders to allow them to do this.

The first respondent, Alter Domus Trustees (UK) (‘Alter Domus’), is a secured lender with a mortgage over the Property registered in 2019.

The second respondents (the ‘Purchasers’) had each contracted to purchase apartments in the Property. This included those who registered their interests with the Land Registry (A) before Alter Domus, (B) after Alter Domus, or (C) nor registered their interest at all.

The third respondent, ION Insurance Group, SA (‘ION), entered a bond in 2016 to guarantee the repayment, in certain circumstances, of deposits to the Purchasers.


The High Court was not asked to make any determination in respect of the category (B) and (C) Purchasers.  Mr Justice Miles responded to the specific questions raised by the category (A) Purchasers:

(a)      Were there binding agreements for sale between Signature and the (A) Purchasers?


(b)      Did the agreements between Signature and the (A) Purchasers implicitly exclude or postpone the priority of any equitable lien on payment of their deposits?   


(c)      Do the equitable liens attach to Signature’s (i) entire interest in the Property or (ii) only the subject matter of each contract?


(d)      Do the notices registered by the (A) Purchasers to only reflect the land in their individual contracts mean that the equitable lien is unregistered against the Property as a whole?



The joint administrators were entitled to sell the Property as a whole “unencumbered by security interests”.  The Purchasers may now wish to look to ION to recover their losses.

For more information about this article or any other aspect of commercial property disputes, get in touch with your Napthens Solicitors in Liverpool, Preston, Blackburn, and across the North West, today.