# Can Developer force me to close contract?



## Rolaga

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?


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## kkelliher

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


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## Rolaga

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.


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## Rolaga

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.


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## Mr DT

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!


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## Steve D

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.


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## rmelly

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.


 
Plus costs, don't forget.


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## Steve D

Mr DT said:


> Must admit the contracts are so unbelieveable in favour of the developers in this country!


 
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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## Complainer

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.


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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## Bronte

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.


 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.


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## MrMan

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.


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## Rolaga

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.


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## foghorn

> I still think the apartment is a good long term investment


 
You really think that an apartment bought at 2006 prices will be a good long-term investment?


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## tiger

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.


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!


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## mf1

"and people seemingly do not really know what they are getting into."

Its called people taking responsiblity for their own actions. 

mf


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## Bronte

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

"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


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## MOB

".........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.


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## Bronte

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.


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## Rolaga

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.


 
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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## foghorn

Rolaga said:


> 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.


 
Sorry, but plenty of people warned about the fact there was a housing bubbles and that, house prices being at 12 times the average industrial salary, they were way overpriced. Not everyone was hyping them. Though admittedly on this forum, they were hyped more than in other places.


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## MOB

"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."

Hi Bronte.  Not really, I'm afraid.   The Law Society rightly took action to stamp out contract terms which were so unfair as to be unlawful, even though many consumers were prepared to go ahead and accept these terms rather than miss out on the property investment mania.  But there is no way that you can stop people from being merely unwise.  It is only obvious with hindsight that a long-stop closing date was doing a disservice to the buyer.  Many buyers who signed contracts in 2002\2003\2004 and completed in 2004\2005\2006 must have been delighted and relieved to have 'got in' at a lower price.  Indeed, many people in this situation 'flipped' their contracts for instant profits of three or four hundred percent (on their deposit) without ever completing a purchase.   And if you think about it for a minute, the 'contract' you suggest would not be a contract at all: a buyer who wants out can always make sure that they are refused a mortgage.  It would be more in the nature of an option in favour of the purchaser: no builder with any common sense would commit to building houses in such circumstances.

Where a particular consumer contract term is clearly unfair (no matter how the market goes) then it is possible to challenge it in court.  

But you cannot really have a free-market economy without people also enjoying the freedom to make unwise decisions.


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## Rolaga

The part I find particularily unfair is that I signed the contract in April 2006 but the developer didn't sign it until June 2006.  My solicitor says that the contract is dated from the date of the sellers signature, so they have until June 2009 to complete the building.

I don't expect any sympathy, what I would really like is some practical advice as to whether or not I have any options.  Has anyone heard of developers negotiating with purchasers?  After all if I cannot secure a mortgage they would have to sue me.  This will involve costs (for me also, I know) and delays.


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## Robin Banks

Rolaga said:


> Now the economic situation appears to be getting worse by the day. At this rate my family home is now at risk.


 
Why should the developer give you even 1 cent off the contracted price?

If you already have a "family home", why were you buying the apartment? If you were buying it as an investment you possibly denied someone else the chance of a modest family home by using the equity you accumulated in your own family home as leverage against people without that advantage.

The developer has done absolutely nothing wrong here, assuming they complete by June 2009, and you are not worth one iota of sympathy.

Man up and start figuring out how to pay the developer what _you_ agreed to, instead of trying to weasel your way out of _your_ legal obligation.

Of course, if property prices had continued on their upward spiral, we wouldn't have this thread. The sheer brassneck cheek of people who _deliberately entered into a futures contract_ by buying off the plans - then want to renege on that contract when it doesn't work out in their favour is mind boggling.


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## brigade

Find the last reply overly harsh on Rolaga!

Granted, it probably wasn't the wisest move to buy off plans at such inflated prices 2/3 years before the apartment is built but does that justify having a go at someone who seems to be worried about being left homeless!!


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## Complainer

brigade said:


> Granted, it probably wasn't the wisest move to buy off plans at such inflated prices 2/3 years before the apartment is built but does that justify having a go at someone who seems to be worried about being left homeless!!


The OP stated that this purchase was an investment property, and was not to live in.


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## adonis

Complainer said:


> The OP stated that this purchase was an investment property, and was not to live in.


 
He said his family home is now at risk.


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## Complainer

adonis said:


> He said his family home is now at risk.


I missed that point, but to be honest, I'd take it with a pinch of salt. If the OP would like to post details of his overall financial situation (family home, outstanding mortgage, other assets, other mortgages) etc, then we might see if this is a serious claim.

If the OP was foolish enough to use his family home as security for an investment, then he really needs to deal with the problem himself.


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## simon44

If the contract was for the place to be finished a year earlier than agreed and you've lost your mortgage approval then it sounds like they've broken the contract and your scott free. At the very least you'll have the back-up of being able to say how you've lost your mortgage approval and that you've been forced to spend money on rent etc in the mean time. I'd bring them all the way to court if I had to.


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## Steve D

simon44 said:


> If the contract was for the place to be finished a year earlier than agreed and you've lost your mortgage approval then it sounds like they've broken the contract and your scott free. At the very least you'll have the back-up of being able to say how you've lost your mortgage approval and that you've been forced to spend money on rent etc in the mean time. I'd bring them all the way to court if I had to.


 
You have missintrepreted the situatation entirely. If you look at post 4 you will see that the developer has until 9th June 2009 to complete the property.

It is just another situation where an "investor" thought that he was on a one way bet with properties only going to rise in value forever and then he tries to wriggle out of the contract when he find out that his investment will be worth less than he has contracted to pay for it, if it completed on time.


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## Bronte

MOB;769196 
But you cannot really have a free-market economy without people also enjoying the freedom to make unwise decisions.[/quote said:
			
		

> This is very true.  I'm trying to come to terms with people buying property at such a high value relative to a return on it and also with the amount of mortgages they could get relative to their salary.  Did nobody do the sums, it seems not.  I've been in the market for buying but still cannot find anything as it doesn't add up.
> This doesn't help the OP who will just have to do his best to negotiate with the builder.  I don't get the point about the builder signing two months later than you did.  This can often happen, would be quite normal I would have thought, and during those two months you could have pulled out.


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## FKH

Rolaga, I have dealt with developers who have dropped prices to complete with purchasers as they want to sell the property rather than spend years in court and maybe end up not getting a penny. If the property isn't built by the 9th June the next day I would have your solicitor send a letter saying contract at an end and asking for deposit to be returned. It won't happen but will give you a decent argument should the builder pursue you.


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## Rolaga

FKH, thank you so much for that positive and encouraging reply, it was particularly hartening to read after the comments from Robin Banks above.  I also wonder if the builder would be willing to defer payment of part of the purchase price until the sale or rental markets improve.

Bronte, my point about the date of signing is that I think I should be able to cancel the contract on the third anniversary of my signing not the third anniversary of his signing.

Robin Banks, I have not asked for your sympathy, I know I got myself into this mess, but before you make harsh comments in future you should consider that you know nothing about the person with the problem.  I am not willing to give any personal details except to say that I have a real problem.


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## FKH

In terms of the contract date it will always be when the second party signs as there is no binding contract in place until both parties have signed. 

I don't see the reason for such hostility from some posters. I would have sympathy for someone in your position (and would also have sympathy for the builder). Bottom line is that nearly everyone, FTB or investor buys with a mortgage and if the banks wont lend the amount that the purchaser thought their is very little that they can do as we are talking  about large sums of money and will usually not the money personally.


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## Optimist

FKH said:


> In terms of the contract date it will always be when the second party signs as there is no binding contract in place until both parties have signed.


 
This is the case in England as far as I know because their signing procedure is different than ours. 

Strangely that is not the case in this jurisdiction. In Ireland, a contract can be binding, in certain circumstances, against the party that signs even if other side has not signed yet. This topic has been the subject of much litigation. You should get independent legal advice on this issue.


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## FKH

Contract for the sale of land is governed by the Statute of Frauds in Ireland. For a contract for the sale of land to be legally binding it must be signed by both parties.


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## Optimist

For a discussion of when both parties become contractually bound (albeit under very different circumstances) see the Supreme Court judgment in Embourg Ltd v Tyler Group Ltd. There is some uncertainty here as to when the parties become bound to the terms of the contract.

Rolaga - I dont think that you would succeed in trying to have your signing date upheld as the date of the contract because technically you could have withdrawn your offer to buy the property up until the day that the developer signed....


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## Robin Banks

Rolaga said:


> I am not willing to give any personal details except to say that I have a real problem.


 
I have a real problem with people bleating about their self inflicted problems.

They'll cry and they'll whinge and they'll moan, and eventually either they, or their developer, or their developer's bank will be bailed out by the rest of us for _their _collective greed and stupidity.

€7 an hour is the difference between 2,000 and 10,000 jobs in Limerick today. Ireland lost over 16,000 jobs in December alone.

Maybe some day people will join the dots between forcing up the cost of living for ordinary workers with a disgusting property bubble, and jeopardising the competitiveness of an entire economy.

You have no idea what it was like for the people on the other side of your bet for the last decade. Best of luck to you weaseling out of your contract.


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## FKH

"€7 an hour is the difference between 2,000 and 10,000 jobs in Limerick today. Ireland lost over 16,000 jobs in December alone"

What does that have to do with the current thread? But seriously, are you telling me you would work for €3 an hour (or €80 less for an average week than social welfare would pay). I very much doubt it.

I think Embourg was booking deposits if I remember. Rolaga, the only date that matters is the date the developer signed and one part was returned to you. YOu could have pulled out up until they signed.


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## brigade

> You have no idea what it was like for the people on the other side of your bet for the last decade.


Please explain? 
Do you really think that the problems with our economy are solely down to the property bubble?
Are the jobs lost in Limerick just a result of the property bubble?


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## MrKeane

brigade said:


> Please explain?
> Do you really think that the problems with our economy are solely down to the property bubble?
> Are the jobs lost in Limerick just a result of the property bubble?


 
His point is that young people trying to buy their first home were tormented by contstantly being outbid by specuvestors who could leverage their existing property to buy investments, driving prices up and up and up.

The fundamental problem with our economy is the housing bubble, amoung many other things it gave the government loads of cash enabling them to constantly tweak the minimum wage upwards.

The jobs in Limerick are partly as a result of the property bubble because as well as the minimum wage issue all the services required by Dell, the cost of materials, putsourced labour etc. are greatly higher.

Everything is relatively overpriced in this country and the property bubble is one of the fundamental causes of this.


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## FKH

The problem is not the minimum wage which is circa €18,000 per annum but rather the massive amounts of money people made at the other end of the spectrum thus pushing up prices. If everyone earned €18,000 there would have been no housing bubble, but then that is getting towards communism which was a disaster in any country that tried it.


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## SteveW9

Robin Banks said:


> Why should the developer give you even 1
> 
> Man up and start figuring out how to pay the developer what _you_ agreed to, instead of trying to weasel your way out of _your_ legal obligation.
> quote]
> 
> Couldn't agree more, you took a risk and got burned, you didn't see this crash coming because your greed clouded your vision.
> You already had a family home so why did you feel the need for this appartment and now you may lose both.
> 
> as quoted man up to you mistake and stop looking for sympathy.


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## inamuddle

Just for another angle on this thread, there are others out there (me included) who bought these properties off the plan as a home and not an investment. We have rented for 3 years and are now being forced to pay the full asking price for unfinished developments (yes, my particular apt is finished, but the development is a building site and not currently being worked on). I do not feel I am paying for what I signed up for 3 years ago, but I am being sued by my builder and facing court action to complete the deal. My point is that some of us that signed up 3 years ago were not "idiots" (to quote above) trying to play the market, we were just nievely trying to get on the property market during times of very inflated prices. These contracts were heavily in favour of the builder as far as I am concerned.


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## mainasia

FKH said:


> The problem is not the minimum wage which is circa €18,000 per annum but rather the massive amounts of money people made at the other end of the spectrum thus pushing up prices. If everyone earned €18,000 there would have been no housing bubble, but then that is getting towards communism which was a disaster in any country that tried it.


 
Of course the problem was the minimum wage as stated by Dell umpteen times, don't ignore the elephant in your face. Ireland has a peculiar political system, a type of strange socialism that emphasises high minimum wage and 100,000s of people on the dole doing nothing much, which doesn't contribute anything to the tax net and therefore makes the situation worse. I think the minimum wage should be adjusted down slightly to allow companies to hire more workers on same budget. It was inevitable that Dell would leave as they are not a 'value added organisation' but a 'cost-downer', lowering the wage would have preserved jobs temporarily at least. The minimum wage is not really the whole point though, it's competitiveness across the board, there's no such thing as a free lunch and Ireland exists as part of the world economy and if you work or have a business in Ireland you must compete (do it better or cheaper or faster) or fail. You want a high wage you've got to bring in the high revenue, common sense!


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## Complainer

mainasia said:


> Of course the problem was the minimum wage as stated by Dell umpteen times, don't ignore the elephant in your face. Ireland has a peculiar political system, a type of strange socialism that emphasises high minimum wage and 100,000s of people on the dole doing nothing much, which doesn't contribute anything to the tax net and therefore makes the situation worse. I think the minimum wage should be adjusted down slightly to allow companies to hire more workers on same budget.


And what happens when six months later, Dell decide that the lowered minimum wage is still too high for their tastes?


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## rmelly

Were Dell workers (in Limerick) paid minimum wage?

http://www.tribune.ie/article/2009/jan/11/dell-staff-angry-and-fearful-at-closure/



> Simon Cantillon is 18 and from Limerick City. "I worked temporarily in Raheen building laptop screens. After a big meeting the lines were dead. I was paid about a euro or two above the minimum wage."


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## Robin Banks

inamuddle said:


> Just for another angle on this thread, there are others out there (me included) who bought these properties off the plan as a home and not an investment. We have rented for 3 years and are now being forced to pay the full asking price for unfinished developments


 
Why did you choose to buy off the plans instead of buying something that was already built??

I am boggled that someone would make the largest purchase of their life off a picture. I wouldn't buy a shirt or a pair of pants on ebay myself, but there you go. 

So you weren't a canny investor, you were a saintly FTBer afflicted with laddermania. Either way - you took a chance and it hasn't worked out for you. Oh well..


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## tiger

Robin Banks said:


> Why did you choose to buy off the plans instead of buying something that was already built??
> 
> I am boggled that someone would make the largest purchase of their life off a picture. I wouldn't buy a shirt or a pair of pants on ebay myself, but there you go.
> 
> So you weren't a canny investor, you were a saintly FTBer afflicted with laddermania. Either way - you took a chance and it hasn't worked out for you. Oh well..



Personally, I agree with you about buying off the plans.  However it's a little easy to say these things now.  Remember the govt has been the builder's friend and effectively encouraged FTBs to buy new instead of second hand with the stamp duty regime (until recent changes) and the FTB grant (when it existed).


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## Bronte

inamuddle said:


> These contracts were heavily in favour of the builder as far as I am concerned.


  Can you tell us please why you would sign such a contract, so that we can try to understand how so many people ended up in this situation?


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## markpb

Bronte said:


> Can you tell us please why you would sign such a contract, so that we can try to understand how so many people ended up in this situation?



I'm not disputing the naievity of this but a lot of people didn't think the developer could be so harsh in the contacts or didn't understand the terms of the contact. I've met several people who's apartment lease agreements mean they do not become members of the management company at all until the developer vests. It's written in such legalese that most normal people who spotted it wouldn't understand it anyway.

People hired solicitors to help them with their property purchase and most solicitors were too busy making money to bother reading the documents they were instructing their clients to sign. Yes there's an element of personal responsibility but solicitors were hugely negligent too. How come no solicitor (that I've heard of) told their clients that the lease they were signing gave the developer three years to complete, that it was not predicated on mortgage approval, that it did not make them members of the management company or gave the developer so many votes that they would have no say in how their money was spent?  People were signing a legal contract and their legal advisors didn't bother to read it.


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## Bronte

Markbp to that I would ask, didn't you know that you needed a mortgage to complete, didn't you ask when it would be completed so that you would have a mortgage ready when it became time to pay for the property.  I mean if you're buying something off plan the first thing one would ask is when will it be completed surely?

I don't understand your assumption that 'a builder wouldn't be so harsh'  This is his business and livelyhood and of course they are going to make people comply with contracts for that is what a contract is for.    

I'll leave the management company/agent issue out of this as that's a minefield.


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## markpb

Bronte said:


> Markbp to that I would ask, didn't you know that you needed a mortgage to complete



You're forgetting that most people caught up in the frenzy had never bought before or, at best, had never bought off-plan before. As far as they knew, they _did_ have a mortgage and they didn't know the bank could withdraw it or refuse to let them draw down on it. Most of those people have never applied for a mortgage before. It's very easy to look down on people who made mistakes and who were naive  but the reality is people make mistakes. They hired solicitors to help them through a very complex process and the solicitors let them down. As far as I'm  concerned, this is professional negligence.

Btw, I didn't buy off-plans and I didn't get caught out when I purchased so I'm not looking for pity.


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## mf1

"People were signing a legal contract and their legal advisors didn't bother to read it."

Please read this statement and spot the issue. Did the people signing the contract read it? And if they did, and did not understand it , why did they sign it? 

"Shurely shomebody elshe should be reshponshible for thish"

mf


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## markpb

Good stuff, get a bit of a sneer in there to make your point. That'll win any argument. Next you'll be letting me "it's a bit Irish"...

Did you read the rest of my post(s)? Have you ever read a lease agreement? I've read plenty for different owners and different estates and even now I struggle to understand them. I'm not stupid by any stretch of the imagination. They're not written for normal people - they're written by solicitors in a way  that has to be extremely carefully put in order to avoid any legal problems. 

When any business is signing a contract, they hire a legal expert to examine the contract and let them know about any potential pitfalls. When people buy houses or apartments, they hire a solicitor to check the property rights and advise them when signing any contracts. Solicitors failed to do their duties as far as I'm concerned and tens of thousands of apartment owners are in trouble because of it. 

If you're a first time buyer, how are you expected to know that having mortgage approval is not enough - that the bank can withdraw that approval because of something outside your control? How many people knew the ins and outs of management companies and could understand from their lease that vesting would not take place for years and could easily be postponed indefinitely? We all know that now but how many young people in 2005 knew that? You can sneer and be as condescending as you like but people doing something for the first time cannot know all the answers.


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## mf1

Interesting idea. Shoot the messenger. Why not listen to the message? 

Can I assure you that many solicitors set out the pro's and con's to their clients  of buying property off plan. And d'ya know what? Those clients were by and large not interested. They just wanted the product not the preaching. They were very much the product of their upbringing and society. 

No-one likes hearing a reality check - it is so much easier to find a scapegoat to shunt the responsibililty onto. 

And equally no-one knew we were going to be in this economic meltdown - these are people caught in the crossfire. Thats what happens in recession.  

mf


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## markpb

mf1 said:


> Can I assure you that many solicitors set out the pro's and con's to their clients  of buying property off plan. And d'ya know what? Those clients were by and large not interested. They just wanted the product not the preaching. They were very much the product of their upbringing and society.



Anyone who was warned about the problem of mortgage withdrawal and any downsides to their lease agreement has only themselves to blame. There are plenty who got almost zero legal advice though and it's those people I feel sorry for.

For example, in my own case, my solicitor did no checks on the management company. He failed to inform me that the company had almost gone bankrupt, was over 150k in debt and had an unsecured loan from the developer. Those are all material facts that I think I should have been made aware of. As it happens, I was able to join the board a year later and help sort out some of the problems but a lot of people won't be in that position.


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## Bronte

markpb said:


> You're forgetting that most people caught up in the frenzy had never bought before or, at best, had never bought off-plan before. As far as they knew, they _did_ have a mortgage and they didn't know the bank could withdraw it or refuse to let them draw down on it. .


Everybody was a first time buyer one time so I don't get your point about being a first time buyer.  In relation to the mortgage, people had to fill out an application form, talk to a bank or broker, provide endless amounts of paper and sign a document that clearly states how long the mortgage offer lasts - or am I missing something.  Did people not read the mortgage document?


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## MrMan

From dealing with every kind of solicitor imaginable I would say that by and large they do their jobs thoroughly and their are a few who are not very good but you don't tend to come across them very often. I had plenty of sales hang by a thread because the solicitor was nit picking on issues that he could have let go and the solicitors clients would actually ring us and ask what could we do to get their solicitor to look past smaller issues! so mf1 has a fair point. I don't think this ftb debate where ftbs are made look like innocent simpletons that were easily shafted is accurate either because for every ftb I dealt with I had at least one over bearing parent to deal with aswell. People make choices and hopefully they can focus on why they liked the house in the first place and not focus solely on what their neighbour is paying for it.


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## Complainer

Bronte said:


> Can you tell us please why you would sign such a contract, so that we can try to understand how so many people ended up in this situation?


When we bought our house in 1994, our solicitor told us that the contract (standard Law Society contract) was totally biased in favour of the builder, but that we had no choice but the sign up of we wanted to buy any house.


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## Bronte

Complainer said:


> When we bought our house in 1994, our solicitor told us that the contract (standard Law Society contract) was totally biased in favour of the builder, but that we had no choice but the sign up of we wanted to buy any house.


 
And did you not say to yourself I'll walk away from this as it's too risky?  Did you understand the risks?  When you say any house, you mean only houses being built by developers?  You could presumable have bought a second hand house with none of the risks associated with buying off plan.


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## Complainer

Bronte said:


> And did you not say to yourself I'll walk away from this as it's too risky?  Did you understand the risks?  When you say any house, you mean only houses being built by developers?  You could presumable have bought a second hand house with none of the risks associated with buying off plan.



What makes you think it was off-plan? What makes you think second-hand house purchases use a different contract form than new houses?


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## inamuddle

It is hard to understand why there are so many people out there with this problem if you were not caught up in it, so to respond to some of the questions raised....I bought off the plans because it was the cheapest way (and only way for me at the time) to get on to the property ladder. You needed generally a 5,000 deposit and then had time to save the remaining deposit required during the time that the property was being built, which was usually outlined as 18 months. To buy a completed house, you needed a larger deposit, so by just saving for 18 months, the property that you liked origionally was probably 10,000 more (at best) when you had saved your funding. At least by buying off the plans, the amount due wasn't changing so you could budget for exactly what was due. At that time you were constantly chasing the market with no bursting of the bubble in sight so it was more manageable to finance off plans then buying a new build or second hand house therefore.  (In hiensight, I don't know what this frantic need for owning a home is in the Irish genes, perhaps renting is more investment savvy)

In relation to the contract in favour of the builder, yes, readily admit that without a legal background, I didn't fully appreciate the wording of the contract at the time of signing so put faith in my solicitor. Is that not why you use a solicitor as a middle man if only to identify loose wording? Again, to put into perspective, people were queing over night to get houses, so you felt elated to actually get your pin in the wall to secure a house. You then had 15 days to sign the contract or the house would go to the next hopefully buyer behind you, so yes, docuaments were probably not read properly. Not as easy to say therefore that as it is the biggest investment of your life that you would read everything, there were other pressures at play but again.....in my personal opinion....solicitors have some questions to answer on this. In my profession and most others, we would not get away with this type of sloppy work, so I would have expected the same from the legal professions.

Finally, the mortgages. Your approval only lasts a year, so if there is a delay in the property being completed, your mortgage approval runs out and you have to reapply. Conditions have changed since many applied the first time, so people getting 100% approvals at the time (thankfully not me), can no longer get that, so can no longer afford the property. 

Not looking for sympathy, just trying to help you to understand why people are in trouble with this now and I completely understand the OP. (By the way Rolaga, there are court cases going on all the time on this, worth following to see if your personal situation is mirrored and what the outcome was if so).


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## Rolaga

Thanks for that, can you tell me the best way of finding out about these court cases and how to follow them.  There doesn't seem to be much reporting of them in the newspapers.


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## cash king

Rolaga said:


> 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.


 

Bad as it seems, are you sure the home is at risk?

assuming you are married.....

Developer cant force you to sell it to pay the investment property purchase price without spouse's consent? Did you BOTH sign the 2nd property contract? IF the family home is paid for/nearly paid for, your situation is stronger?

Not a solicitor myself, check it out tho


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## mf1

cash king said:


> Bad as it seems, are you sure the home is at risk?
> 
> assuming you are married.....
> 
> Developer cant force you to sell it to pay the investment property purchase price without spouse's consent? Did you BOTH sign the 2nd property contract? IF the family home is paid for/nearly paid for, your situation is stronger?
> 
> Not a solicitor myself, check it out tho



Wrong. The Family Home is an asset of which OP owns half. If push came to shove and a judgment was obtained, Bank can force the sale of the family home but only the portion of the sale proceeds belonging to the defaulter can be claimed by the Bank. The other spouse is entitled to their share. 

mf


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## SteveW9

Rolaga said:


> 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.


 
" How could I loose!" It was this stupid greed that the country in the  shapes it's in.  You couldnt be happy with just once house and not price ftb's out of the market.


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## inamuddle

Rolaga said:


> Thanks for that, can you tell me the best way of finding out about these court cases and how to follow them. There doesn't seem to be much reporting of them in the newspapers.


 
Best way to look through court case results is in http://www.courts.ie/


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## onq

Rolaga said:


> 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?



===================================

*Preamble*

Yes, bearing in mind you cannot and should not act unlawfully to frustrate the sale, you can certainly make sure you're getting what you are being asked to pay for - a compliant, competently built building.

Although the below advice seems exhaustive it is not. You should retain a competent inspecting architect and design team to undertake this level of inspection and make sure they are supported by a good combative, but not abusive, solicitor.

*General*

Firstly, don't do or say anything that may affect your negotiating position and your solicitor can advise you on this. The below is a fairly hard-nosed approach to putting the developer/builder/design team through the hoops just before a closing.

While you may be forced to complete eventually there may be quite legal ways to delay handing over the money for an extended period or to make it easier for the developer to let you go on your merry way.

Here is some food for thought.

*Check the small print on your contract closely*

Contracts are sometimes self-defeating. Your eagle-eyed brief may find that all has not been carried out strictly per the terms of the contract and it may be possible to declare it null and void on a technical matter. Unlikely, but it should still be checked. See what is supposed to be acceptable in terms of completion dates and what you are permitted to do in the event of a dispute.

If your inspecting team [see below] discover defects and these defects are significant and your solicitor can come up with supporting argument/ precedent, it may be possible to rescind the contract. I am mindful of comments by others suggesting that the contract may favour the developer. This may itself may be a weakness if the courts take a view on this following a flood of similar cases coming before them.

*Inspect the Building minutely*

Have you had the property and the development in which it is situated competently surveyed?  Very few buildings are perfect and a competent inspecting architect, engineer and mechanical and electrical engineer can usually find one or two items it can cost money to put right.

Building Regulations Compliance items are the ones to look for, but even small defects can cripple profitability if there are enough of them and they are repeated throughout the scheme. Using a borescope to check that insulation is where its supposed to be in cavity wall construction, for example, can show up missing wall ties, displaced DPMs et cetera. 

In particular, Fire Safety issues are the ones to look at.

Have all the Fire Doors been properly installed:

3 mm gap max
self-closers working
tumbler operated locks
intumescent seals and smoke seals in place where required
ironmongery bedded in intumescent paste - if required by the cert for the Fire Door and Doorsets.

Are all the Fire Exit Routes complete, with 

good footing
clear of obstructions
in compliance with Parts B, K and M
minimum 2M clear except for door frames
doors opening in the direction of travel [except in the middle of corridors] 
no locks on final exit doors
are the stairs made from non-combustible material
leading to a final exit across safe footing free from builders debris, rubble and impediments to the Public Domain?

What about the Safety Health and Welfare and Work Regulations. The latter may apply in apartments in relation to where maintenance personnel may have to work.

Are all the building services complete and commissioned apart from the Fire Safety ones? Water, electricity, gas, air-con/heat exchanger, security?

Are there any obvious building defects:


are there any plumbing leaks with follow-on consequential damage to fit out, surfaces and/or insulation?
are parts of the building missing - cladding, roofing tiles, paving stones, handrails?
are there problems with condensation, or damp stains suggesting cold bridges?
are there adequate ventilation ducts with the correct overrun times for extract fans for bathrooms, shower rooms and/or kitchen
are all kitchen and bathroom fittings working and installed per specification?
is the tiling done?

*Examine the Certification Closely*

Check the detail of the Opinions being offered by the architect and the Schedule A assurances/certificates supporting them from 

the structural and civil engineer,
the mechanical and electrical engineer,
the fire safety consultant
the sub-contractors and 
the specialist suppliers.

The Architects Opinion on Building Regulations should state that it relies on the the Schedule A Assurances, and that means the date on the Opinion should not be earlier than any of the dates on the supporting documentation. 
All certs can be dated the same date, but the architects Opinion should otherwise show that the architect saw all the supporting documents before he signed [and dated] his Opinion. Similarly, the Inspection date cannot precede the Issue date.

In the Opinion on Planning, the date of inspection of the planning documents must be a date on which the planning authority offices is open to allow such an inspection, unless online inspection is claimed. Where this is claimed the quality and completeness of the online documentation should be checked. Similarly, the Inspection date cannot precede the Issue date.

Check to see if there are any enforcement warning letters or proceedings are already under way against the builder or the developer on either this or any other job they have undertaken, either separately or together. learn from this.

Check to see if any notices to quit or desist have been served by either the Fire Prevention Section or the Health and Safety Authority.

Check to see if any vandalism or damage by others that may have occurred during the buildign programme has been made good, particularly fire damage or arson attack and see who oversaw the work and who certified the repair.

Demand a complete set of documents to cover everything, because as a Member of the Management company, its your sinking fund that will pay for future defects after the builder goes. Investigate every new material, odd method of construction, or unique foundation type. Commissioning Certs and Manuals for everything should be available for inspection on the date.

Ask to see the test logs for the concrete cubes. Make sure any fire engineering solution has been fully tested i.e. its no point testing each item in isolation - the heat detector in the kitchen must activate the fire alarm siren, the zone board at the entrance as well as the atrium vent [for example] - if the cert doesn't state what actual testing was done, ask for verification in writing.

Ask for the Building Energy Rating Cert for your apartment.

=====================================

*Conclusion and Caveat*

I cannot stress the following principle enough  - accept nothing, question everything, including this advice. 

As noted above, this is not an exhaustive advice note. Some or all of these inquiries may turn up useful information, some responses may only hint at troubles covered up. The developer, his professionals and/or the contractor may become aggressive or even abusive during your questioning - that's generally a good thing and don't let either it or vague threats from his legal team faze you.

Best of luck with it and revert here occasionally to let us know how you're getting on.


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## onq

onq said:


> ===================================
> <snip>
> 
> All certs can be dated the same date, but the architects Opinion should otherwise show that the architect saw all the supporting documents before he signed [and dated] his Opinion. Similarly, the Inspection date cannot precede the Issue date.
> 
> In the Opinion on Planning, the date of inspection of the planning documents must be a date on which the planning authority offices is open to allow such an inspection, unless online inspection is claimed. Where this is claimed the quality and completeness of the online documentation should be checked. Similarly, the Inspection date cannot precede the Issue date.
> 
> <snip>



Correction.

In the above piece, I stated:

_"the Inspection date cannot precede the Issue date"_

Unforced error on my part and apologies for any confusion arising.

Its the other way around:

"The Inspection date cannot be after the Issue date"

Inspection can be on the same day as the Date of Issue.

Inspection cannot be on a day following the Date of Issue, because by the Date of Issue, all inspections must have occurred.

This refers to both the inspection of the documents and the inspection of the built work.

Apologies once again for that gaff.


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## HostBidder

MrMan said:


> 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.



I think this is probably the best advice you got in this thread.  Try to talk to the builder directly (not through an estate agent or solicitor).  Tell him you can't afford to complete and ask him for suggestions. Don't commit to anything or make any agreement until you consider his offer (if he does make one) and speak to your solicitor about it. Chances are the builder is also experiencing financial difficulties and will be anxious to work something out with you.

Are you confident that your solicitor has looked at your contract in detail, with a view to finding a way to get you out of it?

Obviously, if the builder doesn't complete the property by the agreed date you will try to get out of the contract that way.  If the builder says that the property is complete, check to see that he has the required documentation and certification in place to legally back up his claim.  You might also consider engaging your own Engineer to give a letter or report as to whether or not the property is in fact complete.

On the issue of blaming builders for the contracts and saying that everything was in their favor - I don't agree.  I was in a very similar situation to the OP and had to pay the full price for the property.  I knew the risks when it came to signing the contract and asked (through my solicitor) for some amendments that would reduce the risk.  The builder refused to make these amendments (because there was huge demand at the time, and could easily sell the property to someone else).  I decided to take the risk and lost out.  What's unfair about that, the builder didn't force me to do anything?

The builder in my case has since run into his own financial problems and is no longer building.  As we all know, lots of builders have lost millions - it's not as if they didn't take any risks or suffer any losses.


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## onq

HostBidder said:


> <snip>
> As we all know, lots of builders have lost millions - it's not as if they didn't take any risks or suffer any losses.



This may sound like not-picking, but no, we don't know that.

Builders are paid contract sums to construct buildings.
They risk losing money when Employers fail to pay them what they are due.

Developers are entrepreneurs who offer [for this example] speculative developments to market.
They risk losing money on their investment when the market falls.

The newer breed of Builder-Developer is exposed to both sets of losses.



FWIW


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## onq

Complainer said:


> I missed that point, but to be honest, I'd take it with a pinch of salt. If the OP would like to post details of his overall financial situation (family home, outstanding mortgage, other assets, other mortgages) etc, then we might see if this is a serious claim.
> 
> If the OP was foolish enough to use his family home as security for an investment, then he really needs to deal with the problem himself.




From your website:

_"I have high blood pressure, and I struggled for a couple of years to manage this through diet and exercise. But I just couldn’t seem to get it low enough to avoid damage to the heart, so I bit the bullet a couple of years back and went on medication. I’m on 40 mg of Micardis daily plus 75 mg coated aspirin. This used to cost me about €42 per month, but I’ve managed to reduce this significantly over recent weeks."

_ --------------------------------------------------------

Here's a clew.

I weigh around 17 stone.

I don't diet and I don't do much exercise.

I have had a steady 120/80 since I was eighteen.

Perhaps a change in attitude might help with your blood pressure.

We're not here to judge people but to help them - so let's lighten up a little, ehhh?


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## Complainer

onq said:


> Here's a clew.
> 
> I weigh around 17 stone.
> 
> I don't diet and I don't do much exercise.
> 
> I have had a steady 120/80 since I was eighteen.
> 
> Perhaps a change in attitude might help with your blood pressure.
> 
> We're not here to judge people but to help them - so let's lighten up a little, ehhh?


Thanks for the lifestyle tip (and for boosting the traffic to my website). However, given that BP problems have been in my family for 3 generations, I'm pretty sure it is not an attitudinal issue. 

Perhaps a bit more 'judgemental' advice in the past might have encouraged people to take investment decisions a bit more seriously, and to consider the downside as well as the upside?


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## Rolaga

omq - thank you for that really good advice, I have printed it out and forwarded it to my solicitor. I will definitely use it when the time comes. I really appreciate your advice and the time you took to post it.
I still haven't been contacted by the developer or his solicitor even though the 36 months since contract signing has now expired.

I am reliably informed that if the developer sells at half the contract price he will still be making a hefty profit on the project. (Yes, I know I signed a contract at the original price).




Complainer said:


> Thanks for the lifestyle tip...... However, given that BP problems have been in my family for 3 generations, I'm pretty sure it is not an attitudinal issue.
> 
> Perhaps a bit more 'judgemental' advice in the past might have encouraged people to take investment decisions a bit more seriously, and to consider the downside as well as the upside?


 
Here's a bit of 'judgemental' advice to 'encourage you to take your health a bit more seriously and to consider the downside of your lifestyle as well as the upside':

Loose a bit of weight and do a bit of exercise and don't wait until you are taking up a valuable hospital bed and wasting my tax money on treating you due to your own lifestyle excesses. If BP problems are in your family for 3 generations do you think that gives you a licence to bury your head in the sand instead of addressing the problem?


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## onq

Complainer said:


> Thanks for the lifestyle tip (and for boosting the traffic to my website). However, given that BP problems have been in my family for 3 generations, I'm pretty sure it is not an attitudinal issue.
> 
> Perhaps a bit more 'judgemental' advice in the past might have encouraged people to take investment decisions a bit more seriously, and to consider the downside as well as the upside?



Ah well, sorry to hear about the blood pressure history and I hope you took what this fat person said in jest as intended.
No problem boosting website traffic for you at all 
Mebbee when we get the revised site - really a totally new site - up and runing you'll be returning the favour.
[memo to self: keep personal details cryptic...]

You're absolutely right about taking sufficient time to consider investment decisions and all I can say is I stand by that comment 100%.
I've seen several friends do well from the property situation over the past few years, nice cars, boats, multiple annual holidays, a holiday home, et cetera.
Their trappings of success might nudge €5M apiece.
One guy I know was caught with a development headache, leavng him in a very precarious position financially, with his owings a multiple of what he made.
He did good work generally, and sold well, rolling over the profit into the next investment, always adding value to the site as opposed to merely buying and selling on a rising market.
Didn't read the indicators.

Yours truly OTOH has lived like a relative skinflint.
One annual sun holiday, but only every other year, etc.
Our practice deals in niche markets, not big commercial deals.
We don't see our boat rise as high on the tide as others.
But also we don't then get tempted to take bigger risks.
Right now our assets considerably exceed our liabilities.

But its like a certain Mr. Hobbs once said:
"Unless you're willing to sell your house and live in a tent, you can't fully realise the equity you have tied up in your house."
And while we might not be in such dire straits as others, we still need new work to support current expenditure.
After next month, we'll be looking for more...

<cue the spooky music...>


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## onq

Rolaga said:


> omq - thank you for that really good advice, I have printed it out and forwarded it to my solicitor. I will definitely use it when the time comes. I really appreciate your advice and the time you took to post it.
> I still haven't been contacted by the developer or his solicitor even though the 36 months since contract signing has now expired.
> 
> I am reliably informed that if the developer sells at half the contract price he will still be making a hefty profit on the project. (Yes, I know I signed a contract at the original price).
> 
> <snip>



Its great to be appreciated 

Just make sure you print out the correction I posted as well!

On another, more balanced note, I agree in principle with what other posters have said about you having willingly taken the risk.

However what has happend is that people who would not normally take risks in the property market have taken huge risks with their biggest investmen - their home.

This means that the fallout from this current downturn is likely to be far more severe than others, because of people being stuck paying outrageous prices for houses.

By giving purchasers a legally sound strategy to perhaps persuade developers to revisit their prices, I'm hoing that the purchasers will have a bit more disposable income to spend bringing this economy back up.

And as you pointed out Rolaga, dropping his proces will mean that the developer can still turn a profit, just not as much as he might have done.

This should have follow on benefits in helping the market for those houses achieve a reasonable balance between what you may end up paying for it and what the market will sustain say next spring.

There may be  a method to my madness after all!

<LOL!>


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## Complainer

Rolaga said:


> Here's a bit of 'judgemental' advice to 'encourage you to take your health a bit more seriously and to consider the downside of your lifestyle as well as the upside':
> 
> Loose a bit of weight and do a bit of exercise and don't wait until you are taking up a valuable hospital bed and wasting my tax money on treating you due to your own lifestyle excesses. If BP problems are in your family for 3 generations do you think that gives you a licence to bury your head in the sand instead of addressing the problem?


Thanks for the advice and the remarkably inaccurate insights into my lifestyle. I'll give your comments all the attention they deserve.


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## HostBidder

onq said:


> ...Developers are entrepreneurs who offer [for this example] speculative developments to market.
> They risk losing money on their investment when the market falls.
> 
> The newer breed of Builder-Developer is exposed to both sets of losses.
> 
> 
> 
> FWIW



Thanks for the clarification, the builder developers were actually the people I was referring to and I should have been clearer on that.


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## Trou

Hi, I put a deposit on an apartment in 2006 and signed a contract which said the whole development would be complete within 18 months. Not only was the deleopment not finished, neither was the apartment. In late 2007 when it was apparent that the place wouldn't be finished within the contract deadline I asked for my deposit back but it was refused. In the mean time I lost my job and my circumstanstances have therefore changed. The developer is now suing me to complete and told me that the completion date means nothing, they can complete the development whenever they like. They know I can't complete the purchase / can't get a mortgage / don't have the money, but and told me they will want to be awarded damages. Do I have a case / any chance?


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## Neg Covenant

Trou - it sounds like you may have a good case for getting out of the contract but nobody can say that without seeing the contract and the correspondence. You need to speak to the solicitor who acted for you in the purchase.


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