Can Developer force me to close contract?

R

Rolaga

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I signed a contract to purchase an apartment as an investment in April 2006 when times were a lot different to doday. It was supposed to be completed in 'early 2008'. Now it looks like it will be completed sometime in 2009 as work is eventually progressing at a fast pace.

How can I get out of the purchase as it now makes no sense and my mortgage approval has lapsed. I see no chance of the bank lending to me on a 5 year interest only basis as originally approved.

Is there anything I can do?
 
if you signed the contract yes you can be forced

you will deffinately loose your deposit and if the builder cant sell the apartment he may try and force you to close.

check your contract to see if there was a built in timeframe. Sometimes contracts have a timeframe beyound an agreed date. if this has lapsed you may get out that way but your options are limited
 
Thanks for reply, I have been on to my solicitor this morning and am waiting for him to get back to me. He also said there should be a timeframe when the apartment should be completed and he'll look up the contract.
 
The solicitor just got back to me and said that the contract allowed the developer 3 years to complete the building from the date of the contract.

I signed the contract on the 19 of April 2006, however the developer didn't sign until the 9th of June. So they have until 9 June 2009 to complete. This seems unfair as this gives them another crutial 6 weeks.

In the meantime I have 6 months of sleepless nights to look forward to. I would love to just walk away from my €30k deposit but the solicitor says they will sue me for the difference between market value and the contract price.
 
If you are financing this by mortgage you should make sure the banks are still happy to lend you money as things have changed SO much.

Sorry to hear of your problems. Its not worth having sleepless nights over if its a new home you are buying. Its a home, so you may be paying over the tops for it now but its a home.

If your buying for an investment then Whoops. You have been caught out by the bursting of a speculatrive bubble but hey ho you win some you lose some I guess.

Must admit the contracts are so unbelieveable in favour of the developers in this country!
 
You bought the property as an investment, when investing you always have to be aware that the value of the asset can fall as well as increase and that past performance of the particular asset type is not necessarily a guide to the future performance. Caveat emptor!

What would you do if the price of the appartment had risen to more than the contract price and the developer decided not to sell it to you because somebody else came along with a higher offer? I bet you would not be happy with that! You are trying to do the same thing but this time you are trying to avoid a loss by passing the loss on to the developer.
 
Rolaga said:
I would love to just walk away from my €30k deposit but the solicitor says they will sue me for the difference between market value and the contract price.
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Plus costs, don't forget.
 
Mr DT said:
Must admit the contracts are so unbelieveable in favour of the developers in this country!
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If this is the case why do punters sign them? They are not forced to sign these contracts with a gun to their heads and they all should have taken advice from their own solicitor.
 
Steve D said:
If this is the case why do punters sign them? They are not forced to sign these contracts with a gun to their heads and they all should have taken advice from their own solicitor.
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My own solicitor advised me that the standard 'law society' contract was extremely biased towards the builder, but there was really no other option - the only option was not to buy.
 
Complainer said:
My own solicitor advised me that the standard 'law society' contract was extremely biased towards the builder, but there was really no other option - the only option was not to buy.
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This is an issue the law society should have examined. These contracts are seemingly too biased towards the builder. I don't believe purchasers should sign contracts for something to purchase years hence when the banks may pull mortgage approval. I know there is buyer beware but this is not good enough in these circumstances when it is such a substantial purchase and people seemingly do not really know what they are getting into.
 
Talk to your bank first and see what approval you are ok for now and after that speak to the builder or his agent and explain the situation and look for a compromise deal. If the property has dropped in value by €100k he might meet you have way, even try for the current value. He would prefer to deal with someone who has cash ready than have to pursue someone through the courts although that does depend on his own financial security.
 
Thanks MrMan, that's what I was hoping someone would advise.

I just hope the developer will be reasonable, I still think the apartment is a good long term investment, but there is no way the bank will lend me to fund the contract price now.
 
I still think the apartment is a good long term investment
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You really think that an apartment bought at 2006 prices will be a good long-term investment?
 
Complainer said:
My own solicitor advised me that the standard 'law society' contract was extremely biased towards the builder, but there was really no other option - the only option was not to buy.
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Yes, not a good situation. Another option is/was to buy second hand. At least you see what you're getting, warts and all. With a bit of luck the area is a little mature so you can see what the neighbourhood is like, what facilities are available, and who your neighbours are!
 
"and people seemingly do not really know what they are getting into."

Its called people taking responsiblity for their own actions.

mf
 
mf1;767650 Its called people taking responsiblity for their own actions. mf[/quote said:
Yes of course, but you must agree things were just a wee bit too much in favour of builders. If the 'standard contract' did not allow anyone to sign without 100% mortgage guarantees then what would the builders have done. I know you'll say the builders would have gone to someone who would but if the Law Society stood up and said this is wrong/too far in the builders favour then the power of the Legal Profession would have been able to prevent this situation and would have made the builder back down. Amazingly I've never met anyone who didn't sign a contract because they were made aware that if they didn't have a job in 3 years time when the house would be completed that the bank would refuse to give them a mortgage. I don't think anyone should sign these contracts wherein the builder can delay seemingly forever and the purchaser has little or no rights of enforcement and meantime circumstances change for the purchase. Fair enough if it's a cash buyer. MF1 do you not think these contracts were unfair on would be purchasers in any sense ?
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"MF1 do you not think these contracts were unfair on would be purchasers in any sense ?"

Actually, no, I don't. The advice is real simple. Its a long term contract and there is risk. You take it or you leave it.

To take that risk away, buy a second hand house, close in a few weeks, end of story.
And don't forget, for every single person who opted not to buy a new property off plans for precisely that reason, there were loads more standing right behind them waiting to take their place - lemming like!

mf
 
".........then the power of the Legal Profession would have been able to prevent this situation and would have made the builder back down. "

The legal profession does not have the power to stop unwise buyers signing up to just about anything, seemingly convinced ( as many were) that they simply couldn't lose. However, when the market was at its giddiest, many developers did lose the run of themselves a bit with blatantly one-sided contracts.

The Law Society did sponsor and support a test case in the Irish High Court to have many of the most egregious conditions declared void\unenforceable as being contrary to an European Unfair Consumer Contract Terms directive. Technically, this is of no help to investors, as they are not Consumers. In reality, many of the most egregious conditions were simply stamped out - thsu benefitting all. So, while they might not always cover themselves in glory, I think the Law Society come out of this fairly well.
 
Thanks MOB so you agree that there were (some/many) "unwise buyers" and even the Law Society sought to have them protected. Which would lead one to the conclusion that they need to be protected. Couldn't the Law Society have insisted that the get out clauses of builders (eg. long delays in building) be curtailed and that the mortgage approval clause could not be deleted unless you were in a guaranteed job or were a cash buyer. The force on the builders could be applied because builders have lawyers too. MF1 I realise some people were idiots, but idiots need to be protected from themselves, in this a serious life committing exercise. I really don't think people understood the risk. Maybe you pointed it out to your clients but it seems to me an awful lot of young and naive people signed these contracts without knowing what they were getting into.

OP I'm sorry if I'm going off topic but you are not the first on here trying to get out of a contract and I'm trying to understand how come there are so many of you.
 
Bronte said:
OP I'm sorry if I'm going off topic but you are not the first on here trying to get out of a contract and I'm trying to understand how come there are so many of you.
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There are so many of us because the market was so hyped, I queued for Phase 1 of the development and missed out, then was encouraged by the agents to queue early for phase 2 and when I got there I was lucky to get one of the last ones. How could I loose!
Now the economic situation appears to be getting worse by the day. At this rate my family home is now at risk.
 
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