Hi guys, Has anybody put a deposit on a property, waited until the place was about to complete, then done nothing? I am due to complete an apartment in Sandyford soon, I'm not going to complete...I know there are a huge amount of investors feeling the same way....Mortgage finance for buy to lets nearly impossible so I cant close. I imagine the developer will be on with letters, solicitor's letters etc. I would be very interested to hear people's experiences who have been unable to close a new off plan purchase in Dublin.
Has anybody pulled out of a contract to buy an apartment and been pursued??
- Thread starter frankor2
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There are a few threads about this topic and unfortunately no-one really knows in this climate what developers will do. The developer would be entitled to sue you for specific performance of the contract as you probably know but it is impossible to know if they will. If their bank put a lot of pressure on them they may be forced to issue proceedings against you. If the developer is in trouble then they may already be being sued by suppliers, sub-contactors etc.
How long has the apartment taken to build, you could look at how long they had to construct the apartment under the building agreement and see if they have gone over time. By no means an out but might give you an argument.
How long has the apartment taken to build, you could look at how long they had to construct the apartment under the building agreement and see if they have gone over time. By no means an out but might give you an argument.
Fascinating!
I see no actual breach of contract situation here - just a straight forward - I'm not going to complete.
I think it is hugely important that posters/viewers get a simple concept into their heads.
CONTRACTS ARE BINDING UNLESS THERE HAS BEEN A SUBSTANTIAL BREACH.
"ME NO LIKE" IS NOT A SUBSTANTIAL BREACH.
mf
just to add, there are sample cases pending decision in the courts for the past few weeks whereby Developers are bidding to take whole groups of buyers to court to force them to close on the houses they SIGNED countracts for.
To be fair, if the builder couldn't ask for more when things were booming and you had a signed contract; why should he ask for less when things tank.
To be fair, if the builder couldn't ask for more when things were booming and you had a signed contract; why should he ask for less when things tank.
They covered themselves by allowing three years to build the development and it is just two years since the deposit was paid.
I am aware of the potential for the builder to sue for specific performance however I am very sure that a large number of the purchasers are investors who now find themselves in very different circumstances since the day they queued for the apartments.
I think it would be very useful to get first hand experience from somebody that has been pursued. My own gut feeling is that the developer's solicitors will threathen up to the point of issuing proceedings but then may allow a discount on the price in order to coax the purchaser into completing. This is a much more favourable option for the builder as he will have closed a sale albeit at a lower profit.
The other option is that he secures judgement in the amount of his loss if this can be quantified as he may not be able to secure a sale in the current market. So he is left with another unsold unit in a large development with the knowledge that he can pursue the purchaser at some later date.
ubiquitous
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Of course when prices were going upwards any developer who tried to renege on a contract would have been boiled alive, and rightly so.
Its funny how the media don't treat gazundering as seriously as gazumping
Its funny how the media don't treat gazundering as seriously as gazumping
Hi mf,
I know that there is no breach on the developer's side...He has built an apartment for me at the price I agreed to pay, in the specified manner within the correct time frame. I know what i propose to do is not in the spirit of the contract however I cannot get buy to let finance. I know that the developer can pursue me because I will breach the contract but will he?? And what will he get if he does....This is the $64000 question.
I know that there is no breach on the developer's side...He has built an apartment for me at the price I agreed to pay, in the specified manner within the correct time frame. I know what i propose to do is not in the spirit of the contract however I cannot get buy to let finance. I know that the developer can pursue me because I will breach the contract but will he?? And what will he get if he does....This is the $64000 question.
M
mercman
Guest
I think you will find that depending on the individual circumstances, Banks are lending for Buy to Let purchases. The courts system is to adjudicate on the law - not on personal circumstances. Investors can't simply walk because they don't see short term profit or because they have lost an appetite for the property in question.
Hi Frank, as I said above, what the developers are doing in these cases is persuing multiple people from the same development in a single case (a sort of Class action), as opposed to persuing everyone individually. If the judge rules in the sample case before him that the developor is free to take the case, there are a flood of cases waiting to be added to the courts.
How do you know there are cases being taken?
From what I've heard developers (in conjunction with their backers) are doing their due dilligence on those in breach of contract to guage the merits in proceeding against them. This is being done on an individual basis.
They're also looking at family money here.
They're also looking at family money here.
thats exactly correct. the initial ruling i would guess is to ensure everything is constitutional
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"They're also looking at family money here."
Now thats the interesting bit - well to me anyway.
I have had clients plead abject poverty ( matrimonial/debt collection/stamp duty evasion ) as a defence ( its not!) to a claim against them. Amazingly, 90% of them could find the money when push came to shove.
mf
Now thats the interesting bit - well to me anyway.
I have had clients plead abject poverty ( matrimonial/debt collection/stamp duty evasion ) as a defence ( its not!) to a claim against them. Amazingly, 90% of them could find the money when push came to shove.
mf
I think that the OP's ultimate question is what will the developer do to try and get people to complete. Regardless of there being a binding contract they may well offer to complete for a lower amount (I have bought propeties for lower amounts for people as the developer wanted rid of them).
I wonder if a developer can sue multiple buyers in one go and it will be interesting to see what the court thinks. There could be different defences raised in each individual case and I am not sure how feasable it really would be.
What Mrs. B. says is interesting about looking at individual purchasers to see if it is worth going against them. Don't see the relevance of family money as if the person who signed the contract is broke then there's no money.
I suppose the point is that you can't force specific performance if the buyer cant get finance and would then have to look to re-sell the property and look for damages for any shortfall if the ex-buyer had the money.
I wonder if a developer can sue multiple buyers in one go and it will be interesting to see what the court thinks. There could be different defences raised in each individual case and I am not sure how feasable it really would be.
What Mrs. B. says is interesting about looking at individual purchasers to see if it is worth going against them. Don't see the relevance of family money as if the person who signed the contract is broke then there's no money.
I suppose the point is that you can't force specific performance if the buyer cant get finance and would then have to look to re-sell the property and look for damages for any shortfall if the ex-buyer had the money.
Developers and their backers (who remember will have access to privileged financial information on many third parties) may consider pursuing little Johnny if it is felt that a) little Johnny's wealthy folks assisted little Johnny in stumping up a down payment or b) little Johnny's wealthy folks would prefer to keep little Johnny and the family name out of the bankruptcy courts.
It is in the banks interest to assist developers in clearing idle stock.
All hear say mind.