# Laragan customers lose their deposits



## Brendan Burgess

95 people who had paid €20,000 to Laragan have lost their deposits according to an article in today's [broken link removed]. 

But they will be released from their contracts to buy. 

They really are lucky but they are up in arms about losing their deposits and apparently, as creditors, will vote against the restructuring proposals. 

What do they want? That someone rescues the company and forces them to complete the purchases at prices around 40% (?) above the current market prices? 

Brendan


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## Guest116

Yeah, maybe some of them do. Some may prefer to buy and in the longterm hope the prices come back up rather than loosing 15-20k of a deposit.


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## DrMoriarty

IIRC, those Leopardstown units were selling at around the €550K mark two years ago(?)
A €15K~€20K loss is nothing compared to the negative equity the buyers would face if the contracts were enforced.

More from the [broken link removed].


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## Howitzer

Is the issue not that the HomeBond guarantee expires after 2 years, and in effect was worthless given that the original completion date had a 30 month lead in?

I agree they are lucky as far as the market is concerned, but forget about the market rising or falling - as we are often reminded on this site - what are the rights of buyers when the developer goes bust? What is the value of the HomeBond guarantee? Should the funds be released to the developer atall or held in escrow until completion?

Not everything should be a lottery predicated upon how the market performs. In a functioning market checks and guanantee are put in place to protect consumers. Where is the consumer protection in the Irish housing market?


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## jack2009

I appreciate the fact/opinion that if the apartments were to be bought at their original price that it would create negative equity.  However, many people just dont have another 15k to 20k sitting in their back pocket and therefore cannot get onto the property market now even if the prices have reduced!!!

Why is the company even in Examinership, is it to avoid any investigation into the actions of the directors who allowed this to happen?


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## sadie

Why does this process differ from buying a house already built? 
I thought your 10% deposit was held by the seller's solicitor at contract signing stage, and therefore not the property of the seller, until the entire transaction is completed. 
Why is this different when buying property off plans, why does the deposit become the property of the seller straightaway, and not held by a solicitor?


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## andycole

Brendan - 

As had been pointed out in one of the following posts - one big issue is to do with the Homebond guarantee - or lack of now. These contracts had completion periods ranging in numbers - 18 months - 24 months - and in my case - 30 months.

I am one of those buyers.

I am surprised about the Homebond expiration period of 24 months from date of purchase. 

But why was a Homebond guarantee given to me when my contract had a 30 month completion period? I hope to get a clear answer from my own solictor. I will add to this post any feedback that I receive.

There is a startling lack of legal regulation for people who buy off the plans - first time buyers like myself saved for about 1 year for that €15,000. I have been offered €150 refund through the Scheme of Arrangement which is put forward by the Examiner, Mr. Paul McCann of Grant Thornton.

The fact that the property market rises or falls is only a distraction - the real issue is the conduct of the builder Alan Hanly and his subsidiary Laragan Developments Ltd. 

At the creditors meeting yesterday - there were some people who were buying a home - not a investment property. They want to live in Milners Square because of its location, modern design, ease of living due to lack of stairs within their apartments, landscaped gardens etc.. - for some they have been living in and around Santry for their whole lives. And why are they wrong to insist on trying to hold Alan Hanly to their contracts which he signed? Its a valid contract! They have bought a home from Alan Hanly. Why should he be able to walk away from this contract, to be able to breach a valid contract and also to have €14,850 Euro in his back pocket? 

And then to be able to call in an examiner - a process through which his company, Laragan Developments Ltd may be able to write off large debts if this scheme is approved by the High Court - and at some point in the near future to continue building at the Milners Square Complex and to be able to put them back onto the market - even though most of this property has already been sold.

A lot of people have had to continue to rent throughout this period as well - and will have to continue to do so for the foreseeable future. Some people needed a wheelchair accessible bathroom and home as well - and therefore they bought in Milners Square.

These are just some of the issues that have arisen with the Milners Square Development - don't just focus on the headline grabbing stuff - property bubbles, negative equity etc..These issues mostly only affect people who are selling homes, people who are involved in property investment.


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## Brendan Burgess

> They want to live in Milners Square because of its location, modern design, etc



Milners Square will get built at some stage and you and the others will be able to buy the houses on the market then at 40% less than you had already legally contracted to buy them. 

If you have a contract to buy something at €500k and you can exit this contract for €20,000 and buy the same product for €300k, you are €180k better off.  This is true whether it was a proposed investment or a proposed home.

There are many posts on Askaboutmoney where people are contractually obliged to buy a home and the lender is now refusing them the mortgage as the house is worth a lot less than the mortgage. The builder is now legally pursuing them.

You are extremely lucky that you are getting out of this deal. Be careful about what you wish for. The examiner might well change heart and insist that you complete the contract. 

Brendan


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## Howitzer

The fact that prices have fallen since has absolutely nothing to do with this. It's a consumer rights issue. Developers go bust all the time, it just so happens that in this case prices have fallen in the intervening period - what if they'd risen?. 

Telling the buyer that they're lucky - what's that got to do with consumer protection? The idea that someone signs a half million euro contract and has to rely on luck for delivery of that contract, what kind of cowboy country is this?

Are you seriuously telling me that as a former member of the FR Consumer Panel that that is good enough?


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## andycole

Hi Brendan - I accept your points about the purchase prices probably going to be 40% cheaper. But the fact that Homebond expires after 24 months of date of purchase - and still Laragan offers contracts with 30 months completion periods that states Homebond protection is something that is wrong.

Sure he could only do something like this because of lack of legal protection, or an existing legal framework based around consumer rights. I think that these developers are seriously concerned about any legal court case that will be heard against them. They are afraid of any legal precedence being established.


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## foxylady

Brendan said:


> 95 people who had paid €20,000 to Laragan have lost their deposits according to an article in today's [broken link removed].
> 
> But they will be released from their contracts to buy.
> 
> They really are lucky but they are up in arms about losing their deposits and apparently, as creditors, will vote against the restructuring proposals.
> 
> What do they want? That someone rescues the company and forces them to complete the purchases at prices around 40% (?) above the current market prices?
> 
> Brendan


 
Brendan

I am gobsmacked as to how you can think these people lucky to be screwed out of 15k( I myself am one of them). I also wonder would you think the same if it happened to you , people have also lost all the time they ahve been waiting around on this, and its attitudes like yours that allows people like this get away this behaviour.


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## foxylady

You are extremely lucky that you are getting out of this deal. Be careful about what you wish for. The examiner might well change heart and insist that you complete the contract. 

Brendan[/quote]

These people would not be able to hold anyone to these contracts as they have been blatantly breached by exceeding times by 18 months in some cases


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## jack2009

Brendan, I appreciate your view that perhaps this is a lucky escape for the depositors of Laragan.

However, I too am more interested in the system that has left these people in a very awkward position.  The only saving grace they possibly have is that the markets are declining but what position will the markets be in 6 months or 6 years time?  Some of these people will possibly still be saving for the deposit of their first home!!!

The negative equity of an investment/asset means very little if you are not looking to dispose of it in the near future.

I dont suppose anyone has a copy of the scheme proposed by Mr Paul McCann of Grant Thornton!


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## andycole

Jack - 

I do not think it's legal to put the information contained within the Scheme of Arrangement onto a website / bulletin board system like this one.
It was marked confidential when addressed to the creditors.
Perhaps its better to wait until the High Court makes a judgement on this Scheme of Arrangement in 7 days time before anyone starts putting this information onto a public website - or also emailing this information to people who are not creditors.

Please for any creditor who is reading this post - please do not email or put any information that is contained in the Scheme of Arrangement into the public domain - or email somebody / anybody. Emails and their content is not secure.


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## foxylady

andycole said:


> Jack -
> 
> I do not think it's legal to put the information contained within the Scheme of Arrangement onto a website / bulletin board system like this one.
> It was marked confidential when addressed to the creditors.
> Perhaps its better to wait until the High Court makes a judgement on this Scheme of Arrangement in 7 days time before anyone starts putting this information onto a public website - or also emailing this information to people who are not creditors.
> 
> Please for any creditor who is reading this post - please do not email or put any information that is contained in the Scheme of Arrangement into the public domain - or email somebody / anybody. Emails and their content is not secure.


 
I dont remember if Mine was marked private and confidential but i do know that this  was quoted in the times today and it was part of the agreement

" He noted the 95 individuals or couples who had put deposits on the properties would “suffer an immediate impairment”, but they would also receive a “substantial benefit” as they would be released from their contracts and could acquire alternative properties at a “substantial discount” in the current market."


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## andycole

Hi foxylady - 

this sounds like a quote that a journalist took when perhaps interviewing somebody. but still who knows who is sending emails/requests asking for people for a copy of the scheme. i got one myself. a request has been made here. don't email anything.






foxylady said:


> I dont remember if Mine was marked private and confidential but i do know that this  was quoted in the times today and it was part of the agreement
> 
> " He noted the 95 individuals or couples who had put deposits on the properties would “suffer an immediate impairment”, but they would also receive a “substantial benefit” as they would be released from their contracts and could acquire alternative properties at a “substantial discount” in the current market."


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## foxylady

andycole said:


> Jack -
> 
> I do not think it's legal to put the information contained within the Scheme of Arrangement onto a website / bulletin board system like this one.
> It was marked confidential when addressed to the creditors.
> Perhaps its better to wait until the High Court makes a judgement on this Scheme of Arrangement in 7 days time before anyone starts putting this information onto a public website - or also emailing this information to people who are not creditors.
> 
> Please for any creditor who is reading this post - please do not email or put any information that is contained in the Scheme of Arrangement into the public domain - or email somebody / anybody. Emails and their content is not secure.


 
Andy

This might be of interest 

You might be interested in this http://www.irishtimes.com/newspaper/breaking/2009/0624/breaking57_pf.html


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## samanthajane

foxylady i thought you would be happy about this as you have been fighting for a long time to get out of the contract. 

I can understand your fustration of losing 15k/20k but you are winning. You getting out of being in negative equity for 10 years at least if not more!!!

I'm not in your position and i wouldn't ever want to be but i would be doing a little merry dance at the moment if it was me!


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## foxylady

samanthajane said:


> foxylady i thought you would be happy about this as you have been fighting for a long time to get out of the contract.
> 
> I can understand your fustration of losing 15k/20k but you are winning. You getting out of being in negative equity for 10 years at least if not more!!!
> 
> I'm not in your position and i wouldn't ever want to be but i would be doing a little merry dance at the moment if it was me!


 
Why on earth would I be dancing around after being screwed out of 15k. I wanted out of the contract because it had been breached


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## andycole

Well said Foxylady!


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## samanthajane

*I am very sure, our last option is the court route, we served comp notice and everything, also offered them to keep our 15k deposit but nada. Its an abolsute disgrace to think they can get away with this, and your right there is no way I would live on a building site* 


But you wanted to give them the 15k not so long ago just to get out of the contract.

That may very well happen, so you have what you wanted to be done with everything. 

I'm not saying it's right to lose your money that you worked hard for, but you are better off. It's either that or be made to buy a property way over valued. 

Would you really want to go ahead with the purchase of the place, just to keep 15k??


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## foxylady

samanthajane said:


> *I am very sure, our last option is the court route, we served comp notice and everything, also offered them to keep our 15k deposit but nada. Its an abolsute disgrace to think they can get away with this, and your right there is no way I would live on a building site*
> 
> 
> But you wanted to give them the 15k not so long ago just to get out of the contract.
> 
> That may very well happen, so you have what you wanted to be done with everything.
> 
> I'm not saying it's right to lose your money that you worked hard for, but you are better off. It's either that or be made to buy a property way over valued.
> 
> Would you really want to go ahead with the purchase of the place, just to keep 15k??


 

Samantha Jane. I am aware of what I have said, but this was all borne out of frustration. Furhtermore how could I be made buy a property that a: doesnt exist and b: would be way over completion period

Do you not also think that by getting away with this, carte blanche is been given to builders to swindle people out of their hard earned cash in the future  !!


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## samanthajane

andycole said:


> The fact that the property market rises or falls is only a distraction
> 
> 
> 
> 
> .


 
I'm sorry but this is a huge part of why people wanted to get out the contracts!! For what ever reasons. Some didn't want to be in negative equity, some couldn't get the mortgage anymore ect ect

If house prices had gone up 100k i would bet that every one would be looking for that amount in compensation.


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## foxylady

samanthajane said:


> I'm sorry but this is a huge part of why people wanted to get out the contracts!! For what ever reasons. Some didn't want to be in negative equity, some couldn't get the mortgage anymore ect ect
> 
> If house prices had gone up 100k i would bet that every one would be looking for that amount in compensation.


 

I completely disagree with you here as we were buying a home and the propertys were still valued at the purchase price in dec 07 when they were supposed to be completed and even still some months afterwards. We would have loved to move into our apartment when it was supposed to be ready , but why on earth should anyone be made to wait several years . The problems with this development have been going on since the start of this development due to poor project management and not to do with economic downturn


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## samanthajane

foxylady said:


> Samantha Jane. I am aware of what I have said, but this was all borne out of frustration. Furhtermore how could I be made buy a property that a: doesnt exist and b: would be way over completion period
> 
> Do you not also think that by getting away with this, carte blanche is been given to builders to swindle people out of their hard earned cash in the future !!


 

And i totally agree with what you said in that respect. It was unfair not right, and totally out of order. 

My comment was said because i really thought that you would be happy about this because of previous comments. Sorry if i was wrong on that. 

Of course it's wrong, and hopefully because of this no one will ever be swindled out of money again. 

There is so much legal speak in contracts that the best of us couldn't understand. I still dont get why the homebond didn't extend past 24 months when you were given 30 months for the house to be finished. It's like giving you a ladder of 3ft when you need to get to a height of 6ft. A complete and utter waste of time. 

This is what needs to be looked at. Out of all 95 people involved did not one of their solicitor's pick up on this?? That if the worst should happen ( which has happened ) no one's money is covered??


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## andycole

Samantha - 

Yes I do admit that the issue of negative equity is why I want out of these contracts - I am not pretending otherwise. 

But you have just cut this quote out from the middle of my earlier posting. With my earlier post one of the points that I was trying to make is the actual validity of the contracts that were offered / put in place in front of buyers.

The Homebond Certification expires after 24 months it now seems - But the contracts offered had Completion Periods of 30 months with Homebond protection mentioned in these contracts.

So there has to be something wrong with this does there not?

That is what I am bringing to attention here - the issue of negative equity and property bubbles is this context is a distraction.  I apologise if this is hijacking this thread - it should no doubt in the the Ask About Law section - but initially I was just replying to Brendan.


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## gillarosa

The big picture is that the Examinership process has been used sucessfully by this Developer to get themselves out of a hole and continue to trade at the expense of its Creditors and prospective Buyers who had handed over tens of thousands of hard earned Euro each in the hope of buying a home. The Customers could not be described as lucky in the true sense, robbed but saved from a worse fate may be a more apt title. Who are the winners here? the Developer and their Bank. Because the alternative for them would be Receivership and potentially bankruptcy.


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## samanthajane

foxylady said:


> I completely disagree with you here as we were buying a home and the propertys were still valued at the purchase price in dec 07 when they were supposed to be completed and even still some months afterwards. We would have loved to move into our apartment when it was supposed to be ready , but why on earth should anyone be made to wait several years . The problems with this development have been going on since the start of this development due to poor project management and not to do with economic downturn


 
This is another reason yes. I agree what happened to you and the others is unacceptable and shouldn't of happened. 

But i'm being totally honest here, if it was the other way around and house prices had risen i for 1 would be looking for compensation as i'm sure many others would. I would also like you be very upset at losing 15k but i would still prefer to lose that 15k. 

I'm sure everyone would of liked to move in years ago but that didn't happen and you cant turn back time, whats done is done. 

But still if you had moved in years ago you would still today be in a lot more negative equity than 15k. 

I really think that you should get your money back, but if there is no money to give back what can you do? Where can you go? Shouldn't the issue be with the homebond? Can nothing be done about that? Surely it's not right they would cover you for the full term of 30 months that you were given for completition?


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## andycole

Yes I agree with your points here Gill.

The potential benefit of the examinership process is huge for Laragan Developments. They will be able to continue as a going concern. 

As you have well pointed out "*robbed but saved from a worse fate may be a more apt title*"

So what have I learned here? What lesson have I taken from this experience as an Unsecured Deposit Holder Creditor?

Not to sign a contract where my deposit is forwarded to the builder. In future I will make sure that if I buy off the plans again that my deposit will be allowed to be held by my solictor or in a similar kind of setup.


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## foxylady

andycole said:


> Samantha -
> 
> Yes I do admit that the issue of negative equity is why I want out of these contracts - I am not pretending otherwise.
> 
> But you have just cut this quote out from the middle of my earlier posting. With my earlier post one of the points that I was trying to make is the actual validity of the contracts that were offered / put in place in front of buyers.
> 
> The Homebond Certification expires after 24 months it now seems - But the contracts offered had Completion Periods of 30 months with Homebond protection mentioned in these contracts.
> 
> So there has to be something wrong with this does there not?
> 
> That is what I am bringing to attention here - the issue of negative equity and property bubbles is this context is a distraction. I apologise if this is hijacking this thread - it should no doubt in the the Ask About Law section - but initially I was just replying to Brendan.


 
Andy 

My contract was 18 months extended to 24 and the homebond policy didnt even cover this as the homebond ran 2 years from date of booking deposit and not the date of signing contracts a month later.


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## foxylady

Not to sign a contract where my deposit is forwarded to the builder. In future I will make sure that if I buy off the plans again that my deposit will be allowed to be held by my solictor or in a similar kind of setup.[/quote]


On another note we werent aware when sigining that money was being given straight to the builder


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## samanthajane

andycole said:


> Samantha -
> 
> Yes I do admit that the issue of negative equity is why I want out of these contracts - I am not pretending otherwise.
> 
> But you have just cut this quote out from the middle of my earlier posting. With my earlier post one of the points that I was trying to make is the actual validity of the contracts that were offered / put in place in front of buyers.
> 
> The Homebond Certification expires after 24 months it now seems - But the contracts offered had Completion Periods of 30 months with Homebond protection mentioned in these contracts.
> 
> So there has to be something wrong with this does there not?
> 
> That is what I am bringing to attention here - the issue of negative equity and property bubbles is this context is a distraction. I apologise if this is hijacking this thread - it should no doubt in the the Ask About Law section - but initially I was just replying to Brendan.


 
Sorry for just quoting that section. I do agree with you with everything else you said. 

And can i say thank you for being honest about the negative equity a lot of people wouldn't. 

Yes there is something very wrong with the homebond agreement, You could agrue well you should of looked more closely at the contract but as i said before half of it you cant understand, this is why i asked did no solicitor pick up on this at all. Was it something that you would normally look into. 

I purchased a house a few years back and untill today didn't know that a homebond for your deposit even existed! 

Was it because no one expected this to happen? Thats not good enough, you just cant expect things not to happen you have to know whats in place to protect you, if the worst should happen.

The only good thing to come out of this is now people will be more careful, they will ask more questions. If i was to ever buy another house from the plans it wouldn't be on my list to make sure what the completion date was and i now know if it's over 24 months i have no come back for my deposit. ( unless this changes which i hope it will ) 

No much use to you, foxylady and the 93 others i know. 

But i still think that you are all in a much better situation because of being allowed out of your contract. Financially speaking anyway. It's still hurts to know that the builder got your money and never has to re-pay or even face the situation of this. 

Is it an option to sue him directly? this 1.5 million has to of gone somewhere. Could you argue that it was bad acting on his part that lead the company to collapse in the first place?


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## andycole

Foxylady - 

No I was aware -  its a condition in my contract. I was aware of this when I signed. 

But not aware of the Homebond Certification 24 month expiration period.

Also I thought the Completion Period was legally binding if breached by the builder and did not expect the current problems - but I was not aware of a possible contradiction between the completion period and the Homebond certification period.


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## foxylady

At time of signing contracts our SOlicitor told us everything was above board , juts the normal bog standard contract.


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## AlbacoreA

foxylady said:


> ...These people would not be able to hold anyone to these contracts as they have been blatantly breached by exceeding times by 18 months in some cases


 
Is there a date for completion in the contracts? I thought there was some difficulty in holding developers/builders to completion dates unless theres a penalty clause. Was there a get out clause if the date was breached?


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## AlbacoreA

foxylady said:


> At time of signing contracts our SOlicitor told us everything was above board , juts the normal bog standard contract.


 
Is there such a thing?


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## jack2009

Can I ask? Why does the Examiners scheme not look to have people who have put deposits down require the same depositors to complete their contracts for sale?  Especially, if the agreed prices are as people are saying 40% higher than the current market price!

If the examiner did this would he not be realising more money for the examinership.  Therefore having more money to pay for to the other unsecured creditors of the company.  The examiner has a duty to come up with the best scheme possible for the creditors of the company.  I know all of the depositors worked hard to earn the money they have now lost but it would appear that these depositors only represent a small number of the company's creditors.

Also, with the reputation Laragan has just earned itself who will want to deal with them again?  Part of the Examinership is to determine if the company has a reasonable prospect of survival.  However, so many companies that come out of examinership fail shortly after due to the bad publicity and suppliers/customers being unwilling to deal with the post examinership.  For this reason I ask how Mr McCann can determine that the company has a reasonable prospect of survival.

If the answer is no the the company must be liquidated.  If the company goes into liquidation Mr McCann will be appointed and will have a duty to realise the assets of the company.  If this was to happen perhaps it could be agreed that depositors would be allowed purchase their aparments at current market values and that they would be permitted to use their existing deposits?


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## samanthajane

Makes sense..but who would complete the houses? Most of them are still a long way off being finished? Would it be viable to another contractor to take these on and sell them at current market value? If another contractor could take these on i would of thought they would have to pay for work done so far. If there was a profit to be made out of it then wouldn't it be said that laragan had a chance of survival, at least untill this project was finished. Highly doubt any further business would come his way after what has happened.


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## foxylady

samanthajane said:


> Makes sense..but who would complete the houses? Most of them are still a long way off being finished? Would it be viable to another contractor to take these on and sell them at current market value? If another contractor could take these on i would of thought they would have to pay for work done so far. If there was a profit to be made out of it then wouldn't it be said that laragan had a chance of survival, at least untill this project was finished. Highly doubt any further business would come his way after what has happened.


 

Very long way off completon as they havent started .


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## jack2009

If someone was to buy the development the liquidator would be looking for the highest bid.  Anyone who bid to buy the development would not have to pay for the work done to date they would just be buying what is there and in theory they would calculate their offer by considering the expected market value of the houses (less honouring deposits) less cost of completion and profit!

I cannot say that it is viable but on the assumption that the Examiner believes that the examinership will succeed then the it is viable (based on the fact that the examiner has more of the facts and figures than I do).  The Examiner is essentially selling the development to a new investor as would the liquidator.


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## jack2009

foxylady said:


> Very long way off completon as they havent started .


 
Just because they are a are very long way off completion does not make it viable as we know that the cost to build a house against compared to build a house is two completely different things and that previously there was a very very high margin (possibly in excess of 100%).


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## Brendan Burgess

I agree.

The examiner should sell the contracts to a new builder.

Then he would honour the contracts with the buyers. They would get the value of their €20,000 deposit and they would buy the houses at the original price of €500,000.  Then everyone would be happy. Their neighbours would be buying the exact same houses for €300,000 but the important thing is that the original buyers would not have lost their deposits.

Brendan


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## jack2009

Brendan said:


> I agree.
> 
> The examiner should sell the contracts to a new builder.
> 
> Then he would honour the contracts with the buyers. They would get the value of their €20,000 deposit and they would buy the houses at the original price of €500,000. Then everyone would be happy. Their neighbours would be buying the exact same houses for €300,000 but the important thing is that the original buyers would not have lost their deposits.
> 
> Brendan


 
I dont agree, the new builder should sell the houses for €285,000 to the depositors offering the discount on the basis that there will be no need to hire sales agents or advertise the sale of these properties.  It would also be a way for the builder to gain some good publicity for future builds and hopefully help the new company to succeed.


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## foxylady

jack2009 said:


> I dont agree, the new builder should sell the houses for €285,000 to the depositors offering the discount on the basis that there will be no need to hire sales agents or advertise the sale of these properties. It would also be a way for the builder to gain some good publicity for future builds and hopefully help the new company to succeed.


 

This could take at least one possibly two more years which would bring peoples wait time up to almost 5 years, why on earth should anyone have to wait that long


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## Plywood

foxylady said:


> At time of signing contracts our SOlicitor told us everything was above board , juts the normal bog standard contract.



Foxylady

If the contract was bog standard that means that it was governed by the Law Societies standard terms and conditions of sale. Under these terms and conditions the solr is supposed to retain the deposit as it is refundable in the event that the builder doesn't complete. Obviously if it is forwarded to the developer he couldn't get it back as it will have gone into cashflow. If this is the case you can claim against your solicitors professional indemnity cover. 

I suspect that it wasn't a bog standard contract but if this is the case and your solr told you it was, you could claim against his PI on this basis too, so all may not be lost.

I have to say that I think the fact that this guy is currently building a 10,000 sq ft house for himself in Roscommon and driving around in an extremely flash car when his development activities are causing so much hardship is distasteful to say the least.


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## jack2009

foxylady said:


> This could take at least one possibly two more years which would bring peoples wait time up to almost 5 years, why on earth should anyone have to wait that long


 
Its a possible solution to avoid losing 15k.  Better late than never!


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## DrMoriarty

Plywood said:


> I have to say that I think the fact that this guy is currently building a 10,000 sq ft house for himself in Roscommon and driving around in an extremely flash car when his development activities are causing so much hardship is distasteful to say the least.


Tut, tut, Plywood, show a bit of basic compassion.
Quite apart from the 10,000 sq ft house, have you any idea of the running costs of a limited edition Ferrari F50?


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## Caz

I'm one of the unfortunate customers who bought in Carrickmines Green and I understand everyones point that we should be thrilled to be let out of our contract.  But when I was at our meeting the majority of the people were already out of their contract and mine was due to end in July of this year.  So as our contracts expired we should have been automatically released from our contracts and money refunded.  Forgetting about the fact that they have no money seemingly its very rare to get your money back if the builder does not complete in time.

I accept your point that it's better to lose 20K than be stuck in a house of negative equity but I had bought a house and would have been able to stay in that for a very long time now I'm stuck in an apartment and I've just had a baby.  The banks are not lending money so I'm stuck here for the foreseeable future but could have bought the house if completed in a reasonable time.

All in all the fact that a contract is useless to the buyer and completely in favour of the builder is unfair.  Why can't they not pay us now - I doubt we are all in need of the €200 to be paid to us - release everyone from their contract and when some other poor unfortunate purchases the properties and puts down their deposit return it to the people who had already intended to purchase the property.  That is the fairest thing to do even 50% back would be preferable to €200.  At least the suppliers get to retrieve the items put into the houses so at least will get some satisfaction.  Ordinary people like ourselves get to save and hand over our money for nothing to a bunch of builders who has other companies that are very lucrative.  I for one will never buy off plans again.


----------



## Bronte

Brendan said:


> I agree.
> 
> The examiner should sell the contracts to a new builder.
> 
> Then he would honour the contracts with the buyers. They would get the value of their €20,000 deposit and they would buy the houses at the original price of €500,000. Then everyone would be happy. Their neighbours would be buying the exact same houses for €300,000 but the important thing is that the original buyers would not have lost their deposits.
> 
> Brendan


 
Foxylady I'd like your opinion on this please.  As you know I've been following your story for a long time and to me you should be the happiest lady alive today.  I'd always hoped for you that the scheme would go bust.

On a general note I don't know what the world is coming to, losing 20K when what one would have purchased has dropped a minimum 40%.  Some people need their head examined.  There are people on here all the time tied to contracts where they cannot get mortgages, there are thousands of people in negative equity who purchased at over inflated prices, there are people living in housing estates that will never be finished, there are people who cannot move location due to negative equity.  The people getting out of this development would probably not quality for a loan at the moment and even if they did with all the budget cuts would be struggling to make repayments.  The people who lose their paltry deposits are extemely lucky.


----------



## jack2009

Caz said:


> I'm one of the unfortunate customers who bought in Carrickmines Green and I understand everyones point that we should be thrilled to be let out of our contract. But when I was at our meeting the majority of the people were already out of their contract and mine was due to end in July of this year.


 
I think that this is an important point!  It is possible to pursue the directors personally if it can be proven that they acted in either a fraudulent or reckless manner.

The really hard part of this process is the expense of the High Court Application.


----------



## Caz

Bronte you are talking about different scenarios.  When signing a contract you have a loan offer valid for 3 -6 months depending on bank after that assuming nothing has changed it will be renewed but what if you have lost your job there is no opt out clause so there should be something in future put into contracts to allow for that.  That would include banks not lending money and people losing their jobs and can't afford the house now.  Then you get maybe 50% of the deposit back.  As it is you are brought to court to complete your purchase regardless.  So therefore I'm buying a house and the builder should complete that contract - not my problem he can't afford it so I'm sueing him.  

If 20K is such a 'paltry' sum of money you should donate some to the builder to help him out.  You have no idea peoples situations now or how they got the deposit money in the first place and to make such a comment is an insult.


----------



## andycole

I asked a question earlier in this thread - specifically if the contracts offered by Laragan had completion periods of 30 months - why did they include Homebond Insurance Certification when apparently Homebond insurance expires after a period of 24 months?

Here's my opinion - the contracts will have to be re - negotiated by any new company who wishes to take over the Milners Square Complex Building. The present contracts are not valid - when building work started become delayed Alan Hanly had a responsibility of pointing out to all buyers that the Homebond Insurance would no longer apply to the contracts which we signed - and that as a result buyers would be offered the opportunity to a refund of deposits and release from contracts.









Bronte said:


> Foxylady I'd like your opinion on this please.  As you know I've been following your story for a long time and to me you should be the happiest lady alive today.  I'd always hoped for you that the scheme would go bust.
> 
> On a general note I don't know what the world is coming to, losing 20K when what one would have purchased has dropped a minimum 40%.  Some people need their head examined.  There are people on here all the time tied to contracts where they cannot get mortgages, there are thousands of people in negative equity who purchased at over inflated prices, there are people living in housing estates that will never be finished, there are people who cannot move location due to negative equity.  The people getting out of this development would probably not quality for a loan at the moment and even if they did with all the budget cuts would be struggling to make repayments.  The people who lose their paltry deposits are extemely lucky.


----------



## samanthajane

Caz said:


> So therefore I'm buying a house and the builder should complete that contract - not my problem he can't afford it so I'm sueing him.


 
Caz what are you sueing for? Your deposit back or to get your house completed?


----------



## Howitzer

Brendan said:


> I agree.
> 
> The examiner should sell the contracts to a new builder.
> 
> Then he would honour the contracts with the buyers. They would get the value of their €20,000 deposit and they would buy the houses at the original price of €500,000. Then everyone would be happy. Their neighbours would be buying the exact same houses for €300,000 but the important thing is that the original buyers would not have lost their deposits.
> 
> Brendan


Well as long as we don't learn anything from the process that's the main thing.

I couldn't give a rats ass for the buyers. They signed contracts at a certain point in time and if the market had gone the other way and the units had been completed you wouldn't hear them, or me, complaining.

As a consumer I have more rights when I go to buy a bag of spuds than when I buy property off plans in this country. If we perpetuate the notion that luck is the biggest factor in the completion of a half million euro contract then all you're doing is living in a fools paradise.

All the schysters and conmen who brought you this recession will be back again in 20 years time pilling it on again.


----------



## Kate10

Guys,

Isn't it the case that this company is insolvent??  If so what is everyone on about?  Whether or not you were out of contract and would have been out of contract is irrelevant.  Ok, so the company owes you money.  Unfortunately, you are like every other creditor is this country that is owed money by an insolvent company - you get what is left which clearly isn't much.  Why should the house-buyers be put before other creditors?

Plywood it was absolutely bog standard for deposits to be released to builders on foot of having a homebond guarantee.  It seems to me that mistakes were made in that homebond ran out before the construction period allowed and perhaps individual purchasers should look into their contracts with their solicitors and see what their position was in that regard.

At the end of the day the purchasers are all as well off as they could expect to be.  The company is insolvent so there is no way you could expect to get your entire deposit back.  On the other hand you are avoiding enormous negative equity that could have crippled you financially for 10 years.

Gift horse anyone??

Kate.


----------



## Brendan Burgess

So, in summary, 

If the contract term had expired, the buyers had a legal right to the return of their deposits.  Agreed. 

But they are lucky that the contracts expired. 

However, they are unlucky that the builder is in administration and so they have lost their deposits. 

The process of providing deposits needs to be reviewed so that they are insulated from the potential insolvency of the builder. 

Now, how do we protect the builders from the potential default of buyers who are not able to complete? Increase the deposit to 30% of the final price? 

Brendan


----------



## andycole

Kate - 

Its only Laragan Developments Ltd which may be insolvent!
Laragan Developments is a subsidiary of the Alan Hanly Group which is very profitable.
I think the Alan Hanly Group has a responsibility to paying the creditors who are owed money by Laragan Developments. 

The Homebond issue is the reason why I personally believe that the house - buyers should be put before other creditors. 

In case you missed my earlier posting on this thread just to remind you that I am one of those house - buyers.


----------



## jack2009

Brendan said:


> So, in summary,
> 
> If the contract term had expired, the buyers had a legal right to the return of their deposits. Agreed.
> 
> 
> But they are lucky that the contracts expired.
> 
> However, they are unlucky that the builder is in administration and so they have lost their deposits.
> 
> _The directors should not have allowed it to gone this far once the directors realised that the build was not going to be completed before the homebond expired that they should have ensured that that the company had adequate funds set aside to refund to the depositors._
> 
> The process of providing deposits needs to be reviewed so that they are insulated from the potential insolvency of the builder.
> 
> _Agreed, period of home bond cover may need to be reviewed._
> 
> Now, how do we protect the builders from the potential default of buyers who are not able to complete? Increase the deposit to 30% of the final price?
> 
> _I do not see this as an issue, houses/apartments were not always sold off the plans so builders should not have relyied so heavely on this practice. If they do not have sufficient funds to see a project through to completion then they should seriously consider that they are possibly biting off more than they can chew and possibly trading in a reckless and irressponsible manner._
> 
> Brendan


----------



## andycole

Brendan said:


> So, in summary,
> 
> If the contract term had expired, the buyers had a legal right to the return of their deposits.  Agreed.
> 
> (And also the fact that Homebond Insurance Certification expires after 24 months - a builder must be responsible if he is delayed in re - negotiating Homebond Insurance - if the building work is going to be delayed for a period longer than 24 months he must be obliged to offer buyers release from contracts and refund of deposit - perhaps he can then offer the same buyer a new contract?)
> 
> But they are lucky that the contracts expired.
> 
> (Yes I agree)
> 
> However, they are unlucky that the builder is in administration and so they have lost their deposits.
> 
> The process of providing deposits needs to be reviewed so that they are insulated from the potential insolvency of the builder.
> 
> (Yes in our contracts our deposits were to be handed over to the builder. And I will point out that I was aware of this when I signed my contract)
> 
> Now, how do we protect the builders from the potential default of buyers who are not able to complete? Increase the deposit to 30% of the final price?
> 
> (A very important question which should not be ignored because if people loose their jobs as is currently happening - but should the builder receive any money? If someone looses their job they are going to need that deposit just to buy food and clothes etc? Definitely something that the Irish Courts should look at and pass judgement - something that can then act as a guide and framework for both builder and buyer)
> 
> Brendan


----------



## Caz

Samanthajane - breach of contract.

Brendan - I thorougly agree with you.  To protect the builder they would get back a percentage of the old purchase price and what the new purchase price would be so obviously if it rises they don't get anything as the profit would be the compensation.  As with a fixed rate if you fix at a rate and then want out as the variable rate is lower you must pay the lender a penalty.


----------



## samanthajane

Ok breach of contract but what it the outcome you are looking for? For you to have your house, get back your deposit or just sueing in general and see what you get. 

I did wonder if it was possible to sue the builder directly. But can you do that since the company is limited? All well and good him having a nice house and flashy car which if made to sell could pay people back more than 150/200 euro, but if you cant sue him directly then what? 

You cant sue a company that has gone bust ( which is looking very possible ) there's nothing left.

Since it is a company of another company, alan hanly group, can you sue these if all other routes fail? 

Have you been given legal advice about this, that it's possible to do, or is it just hopeful wishing?


----------



## Brendan Burgess

OK folks

Calm down.

I have had to warn people about defamation and ban foxylady for 7 days for ignoring the warning. 

I know you are all angry and upset, but stick to the facts and don't put my home on the line by making loose comments.

This is a very important topic, but I will have to close the thread if people do not post responsibly.

Brendan


----------



## sideswipe

Very interesting thread, I think there’s a long way to run in this yet with more news emerging in today’s paper-
http://www.independent.ie/national-news/halfprice-home-offer-for-buyers-who-lost-deposits-1789204.html

There must be something in the air in Carrickmines, I put a deposit on a sofa in Jim Langans and lost me deposit, I'm glad now though because the prices of sofas has plummeted!


----------



## andycole

Hi Samantha - 

At the Unsecured Creditors Deposit Holders Blocks A - D Creditors Meeting
on Tuesday - the examiner was asked a question specifically about the possibility of accessing assets in the Alan Hanly Group of which Laragan Developments Ltd is a subsidiary.

A Sunday Business Post article: [broken link removed] mentioned that Laragan Developments Ltd was a subsidiary of the Hanly Group.

On the Hanly Group website: [broken link removed] 
the company Laragan Development Ltd is mentioned as a subsidiary.


An Examiner is entitled under Section 4 of the Companies (Amendment)Act 1990 to exercise his powers as an examiner over the Parent Company where the Company under examinership is a Subsidiary of the Parent Company. See attached Section 4 of the Act.

However at the Creditors Meeting on Tuesday - the examiner argued that Laragan Development Ltd was not a subsidiary company of the Hanly Group - and that he could not go into the Hanly Group to use the assets of the Hanly Group to pay the creditors who are owed monies from Laragan Developments Ltd.




















samanthajane said:


> I did wonder if it was possible to sue the builder directly. But can you do that since the company is limited? All well and good him having a nice house and flashy car which if made to sell could pay people back more than 150/200 euro, but if you cant sue him directly then what?
> 
> You cant sue a company that has gone bust ( which is looking very possible ) there's nothing left.
> 
> Since it is a company of another company, alan hanly group, can you sue these if all other routes fail?
> 
> Have you been given legal advice about this, that it's possible to do, or is it just hopeful wishing?


----------



## andycole

Amendment to my previous post - 

I meant to say that on the Hanly Group website they say that Milners Square is a new development of theirs.

But on the Milners Square Website:

[broken link removed]

Laragan Developments on the "The Team" page says that "Laragan Homes, a member of the Hanly Group, is committed to the provision of quality homes. It is their business practice to set standards for other to follow."

So it must be a subsidiary?


----------



## Timbo

One thing the campaigners should be wary of is if the government spot this as a perfect weaze to raise some more money via their spanking new NAMA machine.

Take public money and buy Laragan debt with a big big hair cut (at least 50%).

Use some additional money to finish off the required units quick smart (lots of spare labour hanging around presently).

Move to immediate completion with all those contracted buyers at the original prices.



Now that would be win/win/win surely.

Tax payers turn a nice profit.
Creditors of Laragan get a better deal.
All the Milners Square buyers up in arms won't lose their deposits.


----------



## andycole

Hi Timbo - 

In a good few of my earlier posts I have have mentioned the problem that now exists with the Homebond Insurance Certification. The contracts had completion periods extending beyond the validity period of Homebond Insurance.

Look at this:

[broken link removed]

The Homebond Symbol is present - they are part of the "team" up at Milners Square.

Look at this:

[broken link removed]

At the very end of the page - the Homebond Structural Guarantee is given.

Look at this:

[broken link removed]

_""HomeBond Insurance, is structural defect insurance with deposit and stage payment cover for new homes.""_


----------



## andycole

Laragan Developments Statement as at 24th June 2009

[broken link removed]

I have copied the following from this statement:

_""The Hanly Group comprises of six autonomous firms specialising in six different areas of quarrying and construction. Hanly Brothers Limited was established in 1970 with headquarters in Co.Roscommon, Ireland.""_

Perhaps is someone knowledgeable can explain if Laragan Developments is a subsidiary? Is Laragan Developments Ltd one of these six autonomous firms?


----------



## Brendan Burgess

This probably does require a formal legal opinion. 

But people use the term Group loosely.

So the Hanlys may personally own a number of different companies which are not related, other than the fact that they have common shareholders.

Even if Laragan Developments Limited is a subsidiary of Hanly Brothers Limited, what does that mean?  Surely Laragan can go to the wall and Hanly Brothers Limited can continue trading. That is, after all, the point of limited liability. It  limits the liability of the shareholder to the amount they have invested in share capital.


----------



## mathepac

Caz said:


> ... All in all the fact that a contract is useless to the buyer and completely in favour of the builder is unfair...


While I have the greatest of sympathy for people who lost money and the perhaps their prospect of a dream home, no-one was forced to sign the contracts.

Hopefully everyone had the foresight to review the contracts with their solicitors, seek specific advice and act on the advice. If the contracts were obviously skewed in favour of one party, then perhaps that should have been spotted and advice issued not to progress.


----------



## andycole

Hi Brendan - 

Yes I agree that the implication of a Limited company is that if it goes into difficulty that the parent company can continue to trade. I only raise this issue because at the Unsecured Creditors Milners Square Deposit Holders Blocks A - D, the examiner was asked this question as to why he could not go into the parent company and use the assets to refund myself and the other buyers our deposits.

Personally for me the most important concern that I have is the issue of the Homebond Insurance Certification that was given.  The homes at Milners Square are sold as homes insured by the Homebond Structural Warranty - protection given for a period of 10 years. I looked at the Homebond website and I have given the link in a couple of posts back - this insurance says that it also covers staged payments and deposits. 

So basically I am wondering when the building at Milners Square started going behind schedule what are the implications for Laragan Developments in relation to the provision of the Homebond Insurance that was given? And why did Laragan Developments provide contracts with Completion Periods that extended beyond the provision capability of the Homebond Insurance of 24 months?

I keep mentioning the Homebond in this thread - but the only reason why I keep bringing this up is because I think this is the only mechanism that offers hope to myself as a Unsecured Creditor. The title of this thread is "Laragan customers lose their deposits". I think this is really the only topic worth discussing in relation to this - if this is a fundamental mistake on the part of Laragan Developments in relation to Homebond then all of these contracts may not be valid to start with? And is this is so - then what hope does the liquidator have if called in? 




Brendan said:


> This probably does require a formal legal opinion.
> 
> But people use the term Group loosely.
> 
> So the Hanlys may personally own a number of different companies which are not related, other than the fact that they have common shareholders.
> 
> Even if Laragan Developments Limited is a subsidiary of Hanly Brothers Limited, what does that mean?  Surely Laragan can go to the wall and Hanly Brothers Limited can continue trading. That is, after all, the point of limited liability. It  limits the liability of the shareholder to the amount they have invested in share capital.


----------



## andycole

Hi Mathepac - 

I can offer some explanation of what happened based on my own experiences when buying at Milners Square. I queued up at 4.30am in the morning. I rushed in with a load of other people panicky that I would miss out on getting the particular apartment that I wanted. There was a 30 days white goods offer associated with signing these contracts. So that put me under some time pressure to sign my contracts and get it delivered to the builders solictor. And when I was signing the contracts - I was aware that my deposit was going to be handed over to the builder rather than being held until completion of building.  But to be honest with you I was not expecting any trouble.
The builder would not accept any changes or amendments to the contract offered - at that time in 2006 there was a lot of demand for these homes - so he could easily get someone else to buy. I liked the location and I could walk in and out to my work location. Also I don't really want to buy a house with gardens to look after. 
So I signed.


----------



## mf1

mathepac said:


> While I have the greatest of sympathy for people who lost money and the perhaps their prospect of a dream home, no-one was forced to sign the contracts.
> 
> Hopefully everyone had the foresight to review the contracts with their solicitors, seek specific advice and act on the advice. If the contracts were obviously skewed in favour of one party, then perhaps that should have been spotted and advice issued not to progress.



I think there is/will be a tendency to try and find someone to blame for what has happened. So, one option is always the solicitor - why did you not advise me not to proceed? But at the time the contracts were signed, I'd say if a solicitor had warned a purchaser that the cataclysmic  events of recent times would happen, they would have been ignored anyway. And then, should the solicitors have spotted that the HomeBond Guarantee expired before the property was completed? I don't know - is a solicitor responsible for keeping up to date on all their files when those files have stopped dead? I don't have clients in this position but I suspect that given the way the economy has gone in the last 18 months and given all the bad news around, I might have enquired. But, what good would that do, if the builders were still saying they were going ahead? 

I have always disliked the idea of buying off plans precisely because you cannot see what it is you are buying - so for me, second hand was better. BUT that involves stamp duty and people did not want to pay it. Hence buying new. 

mf


----------



## andycole

I also mentioned earlier that the lesson that I have learned here is that I will not sign a contract again - in which my deposit is forwarded over to the builder directly. 

Perhaps legislation should be enacted - that in all cases when people buy off the plans that their deposits are held in a government type holding account?
Could this be a simple solution to these type of problems occurring in the future?
The builder can apply for loans to the banks for the actual building of a development - monies given to him can be approved by the Government.


----------



## andycole

MF - I am glad you mentioned the issue of Stamp Duty. 
I wanted to avoid paying stamp duty as a first time buyer - I think at 2006 I would have been required to pay? - I felt this money I could use to bid against my apartment in Milners Square.
So this also contributed to my thinking in making a purchase at Milners Square.


----------



## Dublingirlie

On the homebond issue, does homebond expire after 24 months in all instances? If so, if the contract is signed with homebond backing, does it become invalid after 24 mths?


----------



## jack2009

sideswipe said:


> Very interesting thread, I think there’s a long way to run in this yet with more news emerging in today’s paper-
> http://www.independent.ie/national-news/halfprice-home-offer-for-buyers-who-lost-deposits-1789204.html
> 
> There must be something in the air in Carrickmines, I put a deposit on a sofa in Jim Langans and lost me deposit, I'm glad now though because the prices of sofas has plummeted!


 
This appears to be a start in the right direction of compensating depositors!

Although I think we may need to lobby for a further discount based on the assumption that the market value of the houses at completion will be even lower!


----------



## mathepac

mf1 said:


> I think there is/will be a tendency to try and find someone to blame for what has happened. So, one option is always the solicitor - why did you not advise me not to proceed? ...


That wasn't what I meant to imply, although I admit this sentence  lost its impact with what I typed afterwards ...


mathepac said:


> ... Hopefully everyone had the foresight to review the contracts with their solicitors, seek specific advice and act on the advice...


----------



## jack2009

Brendan said:


> This probably does require a formal legal opinion.
> 
> But people use the term Group loosely.
> 
> So the Hanlys may personally own a number of different companies which are not related, other than the fact that they have common shareholders.
> 
> Even if Laragan Developments Limited is a subsidiary of Hanly Brothers Limited, what does that mean? Surely Laragan can go to the wall and Hanly Brothers Limited can continue trading. That is, after all, the point of limited liability. It limits the liability of the shareholder to the amount they have invested in share capital.


 
I think the important part of this is getting a formal legal opinion from Council!

sueing is an option based on the limited amount of information.  However, we dont have enough of the facts to come to any real conclusions.


----------



## Bronte

Many many posts ago I asked why deposits were paid directly to builders and some of the solicitors at the time justified it.  I can't find my post but some of the questions I would have for the legal profession are

1. What is the link between the people who run Homebond and builders.
2.  Did solicitors point out to purchasers that their deposit was going directly to the builder and that if the builder went bust they could potentially lose their deposit?
3. Is the Law society looking at not allowing deposits to be paid to builders - I think MOB replied to this for me before
4. If there is a homebond guarantee for a deposit then it should not have a time limit, it's time limit should be equal to the handing over of the completed property or no signing of contract
5. Is the Law society looking at the fact that completion dates in contracts mean absolutely nothing, they are basically non binding on builders but the purchaser can be forced to complete
6. Is the Law society looking at changing the standard contract so that mortgage clauses can not be removed unless the purchaser has a guaranteed mortgage contract from a bank or they have the cash to complete or something like that.  

There seems to be a particular problem in relation to off plan property in that the balance of power is with the builder to the detriment of the purchaser, an uneven legal relationship.  To me then the legal profession needs to step in and make sure this doesn't happen in the future.


----------



## jack2009

Bronte said:


> Many many posts ago I asked why deposits were paid directly to builders and some of the solicitors at the time justified it. I can't find my post but some of the questions I would have for the legal profession are
> 
> 1. What is the link between the people who run Homebond and builders.
> 2. Did solicitors point out to purchasers that their deposit was going directly to the builder and that if the builder went bust they could potentially lose their deposit?
> 3. Is the Law society looking at not allowing deposits to be paid to builders - I think MOB replied to this for me before
> 4. If there is a homebond guarantee for a deposit then it should not have a time limit, it's time limit should be equal to the handing over of the completed property or no signing of contract
> 5. Is the Law society looking at the fact that completion dates in contracts mean absolutely nothing, they are basically non binding on builders but the purchaser can be forced to complete
> 6. Is the Law society looking at changing the standard contract so that mortgage clauses can not be removed unless the purchaser has a guaranteed mortgage contract from a bank or they have the cash to complete or something like that.
> 
> There seems to be a particular problem in relation to off plan property in that the balance of power is with the builder to the detriment of the purchaser, an uneven legal relationship. To me then the legal profession needs to step in and make sure this doesn't happen in the future.


 
Perhaps you should repost under a seperate heading as this post is taking a life of its own.


----------



## andycole

Our contracts detailed that our deposits were being handed over to the builders.
I understood this when signing the contract.
I am sure my contract is identical to everybody else's contract.


----------



## Bronte

Caz said:


> If 20K is such a 'paltry' sum of money you should donate some to the builder to help him out. You have no idea peoples situations now or how they got the deposit money in the first place and to make such a comment is an insult.


 
If a property has dropped 40% from 500K to 300K, a drop of 200K, and the market is decling further then to lose 20K is nothing. Whether one has borrowed or saved the 20K it is a paltry sum relative to the devaluation plus the ability to repay has also probably decreased.   The person who has lost the 20K can now save and purchase the equivelent house for 60%.

If you find my post insulting then can you tell me how you are financially worse off than before? I defy any single purchaser of Laragan to prove how they are financially worse off today than last week.


----------



## SteveW9

Brendan said:


> OK folks
> 
> Calm down.
> 
> I have had to warn people about defamation and ban foxylady for 7 days for ignoring the warning.
> 
> I know you are all angry and upset, but stick to the facts and don't put my home on the line by making loose comments.
> 
> This is a very important topic, but I will have to close the thread if people do not post responsibly.
> 
> Brendan


Easy there Brendan you are fueling this argument as much as everybody else


----------



## andycole

Steve - 

no argument is taking place here.
just discussion - questions and an honest attempt at answering them.


----------



## Timbo

andycole said:


> I also mentioned earlier that the lesson that I have learned here is that I will not sign a contract again - in which my deposit is forwarded over to the builder directly.
> 
> Perhaps legislation should be enacted - that in all cases when people buy off the plans that their deposits are held in a government type holding account?
> Could this be a simple solution to these type of problems occurring in the future?
> The builder can apply for loans to the banks for the actual building of a development - monies given to him can be approved by the Government.


 
I know people don't like to think they have lost a deposit. But you have dodged a bullet here, seriously. You really need to look on the bright side.

You are not as well off as you would have been had you not got caught up in the hysteria of the time.

But you are FAR better off than you would have been had Laragan not hit financial difficulties and been unable to complete.


----------



## jack2009

Timbo said:


> I know people don't like to think they have lost a deposit. But you have dodged a bullet here, seriously. You really need to look on the bright side.
> 
> You are not as well off as you would have been had you not got caught up in the hysteria of the time.
> 
> But you are FAR better off than you would have been had Laragan not hit financial difficulties and been unable to complete.


 
You may be right but I think  people are annoyed with the way they have been treated and also the fact that if they had withdrawn from the contracts sooner that they would have lost their deposits.  However, now that the builders are "pulling out" the depositors are left high and dry.


----------



## mf1

jack2009 said:


> You may be right but I think  people are annoyed with the way they have been treated and also the fact that if they had withdrawn from the contracts sooner that they would have lost their deposits.  However, now that the builders are "pulling out" the depositors are left high and dry.



I'm sorry but in the current economic situation, people need to get over being annoyed and get on with it!

They are not left high and dry. They are out of their contracts, its over, they have lost their deposits, it hurts,  and now they can move on. There is no cash cow available, anywhere,  to repay them their money. No amount of crying/complaining/whinging is going to change that. 

mf


----------



## jack2009

mf1 said:


> I'm sorry but in the current economic situation, people need to get over being annoyed and get on with it!
> 
> They are not left high and dry. They are out of their contracts, its over, they have lost their deposits, it hurts, and now they can move on. There is no cash cow available, anywhere, to repay them their money. No amount of crying/complaining/whinging is going to change that.
> 
> mf


 
It is not right that we just accept as system that does not protect the people going forward.

Also, some people are left high and dry as they have lost their deposits they now have no deposits available to purchase a property even at a discount.  As you say there is no money anywhere so how to you suggest these people make a start on getting a second deposit for their first property!

This crying etc. that you refer to is what has made Laragan say that they will sell the properties at a 50% discount!  So the crying etc. that you refer to has done something!


----------



## Kate10

Jack this might sound a bit trite, but you cannot protect people from their own bad decisions, nor should you.  Signing a contract for the purchase of an apartment to be constructed at some point in the future is always going to be a gamble.  When you do something like that you take a risk.  Risks don't always pay off.  I'm sorry for anyone who loses €15/€20k of hard earned money, but they should take it as a lesson learned and move on.  

It seems to me that people are chasing around looking for someone to blame.  And what happens if they find someone who did something wrong/made a mistake?  To sue someone for damages you must first prove a loss.  At the end of the day if those properties had been completed 2 years ago and all the purchases closed, the purchasers would be sitting on negative equity of €100k plus each.  

None of the purchasers have made a financial loss.  Time to count their chickens and move on!


----------



## andycole

Hi Jack, MF1 - 

mf1, what jack is saying here is correct here. 

Just to say briefly that at the creditors meeting there were a number of people who are going to have great difficulty with saving up a deposit of around €15,000 to €20,000.

This is because of a variety of reasons - but mostly just the recent wage cuts that they have experienced, the difficulty in getting loans from banks and building societies, and some people have been put on 2 to 3 days weeks - they are now on the live register.

We know that we have escaped negative equity - but we also feel that our deposits should be protected in a situation like this - e.g the Homebond Certification primarily.

This is a serious issue. A formal legal review needs to be undertaken - how many people buy houses that are insured by Homebond? Nearly everyone I think these days.


----------



## andycole

The question of the Homebond Insurance Certification has been commented 
upon at the Insolvency Journal:

_*Laragan Scheme upsets home buyers*_

Look at:

[broken link removed]

So this proves that this topic is worth out while discussing, people have noticed some of the questions that we have raised here.

Perhaps this issue around the Homebond Certification will be discussed on Vincent Browne or Newstalk or RTE?


----------



## Kate10

Hi Andy,

I agree with you that there is an issue with homebond.  It arose because the construction period in your contracts was unusually long.  It would not be at all typical to have a construction period longer than 2 years.  I think the laragan experience has drawn attention to the problem and purchaser solicitors will be extremely careful in the future.  

Personally I would always strongly advise a client against purchasing with a contruction period that long.  If they insist on it then I will advise that we insist that the vendor procure insurance for the entirety of the construction period.  If they cannot do so then the deposit must be held by the vendor's solicitor as stakeholder.

It's possible that some solicitors for some of the purchasers on this development did not foresee the issue when contracts were signed (frankly I'm not 100% sure that it would have occurred to me if I had acted).  I still can't see any way this helps purchasers today to get their deposit back however.  Homebond is only obliged to comply with the original policy.  The builder, from the sounds of things, had no obligation to get more insurance.  And even if the solicitor could be blamed for not anticipating all of this (which I think is a bit of a stretch) I don't think any purchaser would have a case against his/her solicitor.  As I said, a purchaser must first prove that they suffered a loss.

Kate.


----------



## mf1

andycole, I do appreciate your position and I think you are being very level headed and sensible  in trying to deal with the minutiae of what is actually a hugely complex situation. 

I don't think anyone is taking pleasure from the people who have lost their deposit - I think its more a question of being realistic. It is true that many people will not be able to save that kind of money again easily or at all BUT there is a harshness in the current climate and we are all facing that. Many people have seen the pensions and shareholdings wiped out and this situation is akin to that.   

I can't answer the Homebond situation for you - I do think alarm bells should have gone off about the cover only extending for 24 months but Homebond is basically a CIF body and the Law Society have always said that buying a new home from a limited company carries risks. No-one wanted to listen to that when they said it and it did not mean very much for years  and it is only when it all hits the fan that everyone starts asking questions. 

mf


----------



## jack2009

Kate10 said:


> Jack this might sound a bit trite, but you cannot protect people from their own bad decisions, nor should you.


 
I dont think that it is fair to say that these people made bad decisions.  They worked hard to save for a deposit to buy a property.  Many of these people are "normal people" and should be able to rely on the system to protect them. 

If I go into a shop and buy a shirt that falls apart you cannot say that I made a bad decision but rather the shop was selling rubbish.  Luckily there are laws and agencies that protect me as a consumer!  The system of buying houses off the plans is inadequate.  I would feel different if Laragan delivered on time in that case I would say that these people were unlucky!

These people may also have been trying to be clever in that they might not have been able to afford the property at the time but that would by the time the development was completed.


----------



## jack2009

Kate10 said:


> It's possible that some solicitors for some of the purchasers on this development did not foresee the issue when contracts were signed (frankly I'm not 100% sure that it would have occurred to me if I had acted).
> Kate.


 
Do we not hire solicitors to look after our interests?


----------



## mf1

You did not refer to the rest of kate10's post

"And even if the solicitor could be blamed for not anticipating all of this (which I think is a bit of a stretch) I don't think any purchaser would have a case against his/her solicitor. As I said, a purchaser must first prove that they suffered a loss."

What is the actual loss? If they had proceeded and the deal had concluded, they would have lost even more in terms of negative equity. 

mf


----------



## jack2009

mf1 said:


> You did not refer to the rest of kate10's post
> 
> "And even if the solicitor could be blamed for not anticipating all of this (which I think is a bit of a stretch) I don't think any purchaser would have a case against his/her solicitor. As I said, a purchaser must first prove that they suffered a loss."
> 
> What is the actual loss? If they had proceeded and the deal had concluded, they would have lost even more in terms of negative equity.
> 
> mf


 
Sorry, granted yes the way the way the markets have changed creates a possible financial benefit to the purchasers. However, that is looking at the glass half full. The system appears to allow to let a developer take as long as they want to complete a development with no protection to the purchaser should the developer fail to deliver.

Kate if you ordered a piece of furniture and paid a deposit but were left to wait and wait passed the promised date of deliver would you say you made a bad decision, sit patiently on the floor waiting for the furniture to arrive then eventually just buy another piece of furniture elsewhere.  And never ask/demand your money back?

What about the fact that the company was allowed to use the depositors money to finance the development with no homebond in place.

Their actual loss is their deposit. 

The depositors might be lucky when you compare 2006 prices to now but who knows what the prices will be like in 2016 when some of these people might be lucky and have their deposit saved up again!


----------



## Brendan Burgess

> Kate if you ordered a piece of furniture and paid a deposit but were left to wait and wait passed the promised date of deliver would you say you made a bad decision, sit patiently on the floor waiting for the furniture to arrive then eventually just buy another piece of furniture elsewhere. And never ask/demand your money back?



That is exactly what happened to  a  lot of people who paid a deposit for furniture to shops which subsequently went to the wall. 

Brendan


----------



## jack2009

Brendan said:


> That is exactly what happened to a lot of people who paid a deposit for furniture to shops which subsequently went to the wall.
> 
> Brendan


 
Yes, but people are becoming aware that had they paid by credit card that they would be insured.  Anyway, did that make their decision to shop where they did a "bad decision".


----------



## Plywood

Kate10 said:


> Plywood it was absolutely bog standard for deposits to be released to builders on foot of having a homebond guarantee.
> Kate.



I am well aware that everybody did it, that doesn't mean it was correct. I am dealing with this everyday and I have recently dealt with a development which has gone bust where the solr held the deposits and one which went bust where the solr lodged the deposits to the developers loan and guess who was correct. A court ordered that the deposits be returned by the solr and solr no 2 didn't have them anymore. Legal opinion was sought and the result was that solr no.2 was wrong to have forwarded them to the Bank.


----------



## jack2009

What was the judges reason for the different order?


----------



## mf1

Plywood said:


> I am well aware that everybody did it, that doesn't mean it was correct. I am dealing with this everyday and I have recently dealt with a development which has gone bust where the solr held the deposits and one which went bust where the solr lodged the deposits to the developers loan and guess who was correct. A court ordered that the deposits be returned by the solr and solr no 2 didn't have them anymore. Legal opinion was sought and the result was that solr no.2 was wrong to have forwarded them to the Bank.



Do you have a record number and judgment details for this? 

mf


----------



## Plywood

mf1 said:


> Do you have a record number and judgment details for this? mf



Sorry its work related so can't reference it on the web. You'll note that the solicitor who posted didn't disagree with me though, she just said that "it was absolutely bog standard for deposits to be released to builders on foot of having a homebond guarantee".

It was also bog standard for depositors to pretend that they were non residents not that long ago (Banks even advertised non resident DIRT free accounts in their windows) and look where that ended up. Bog standard is no defence.

I don't think that people who paid deposits will be able to follow the Hanly Group. The parent would need to have guaranteed the company for that to apply and if that was the case Anglo/AIB wouldn't be following their money, they would be going for the jugular (of the parent co).


----------



## jack2009

andycole said:


> Hi Samantha -
> 
> At the Unsecured Creditors Deposit Holders Blocks A - D Creditors Meeting
> on Tuesday - the examiner was asked a question specifically about the possibility of accessing assets in the Alan Hanly Group of which Laragan Developments Ltd is a subsidiary.
> 
> A Sunday Business Post article: [broken link removed] mentioned that Laragan Developments Ltd was a subsidiary of the Hanly Group.
> 
> On the Hanly Group website: [broken link removed]
> the company Laragan Development Ltd is mentioned as a subsidiary.
> 
> 
> An Examiner is entitled under Section 4 of the Companies (Amendment)Act 1990 to exercise his powers as an examiner over the Parent Company where the Company under examinership is a Subsidiary of the Parent Company. See attached Section 4 of the Act.
> 
> However at the Creditors Meeting on Tuesday - the examiner argued that Laragan Development Ltd was not a subsidiary company of the Hanly Group - and that he could not go into the Hanly Group to use the assets of the Hanly Group to pay the creditors who are owed monies from Laragan Developments Ltd.


 
There were some posts about Laragan Developments Limited being a subsidiary of Hanly Group. So thought I would make this post to clarify if Laragan is or is not a subsidiary.

I have just had a quick scan of the last annual return submitted by Laragan Developments for the year ended 31 December 2007. They state that Laragan Developments is a 100% subsidiary of Laragan Holdings Limited. They also include a note that states "the company guarantees the liabilities of its subsidiaries in Ireland".

Can anyone confirm if any of these subsidiaries have been included in the examinership process?  The financial statements show total assets less current liabilities of c. €9million.  Considering we are not almost 18 months on it is easy to imagine that the group is now insolvent!

The financial statements also mention that the company is controled by Alan Hanley, this would appear to confirm Paul McCanns statement.


----------



## Mumha

andycole said:


> They have bought a home from Alan Hanly. Why should he be able to walk away from this contract, to be able to breach a valid contract and also to have €14,850 Euro in his back pocket?


 
I think this is the central point in your angst, the fact that it is €14,850 of money that YOU scrimped and saved to provide, and you've some third party telling you "Ah sure not to worry, it could be worse !". Yet again, another developer gets his backside bailed out by the system.


----------



## andycole

Hi everyone - 

Jack that is interesting - with regard to the fact that they do mention Laragan as a subsidiary. However I think _*we need to be careful* _with posting anything around the issue of the Hanly Group company structure - the examiner did say that he could not go into the Hanly Group and other associated companies in order to refund our deposits - so I think the business structure in this case must be very complex with regard to company law. Lets keep away from this issue.

I think we should just focus on the Homebond Insurance Certification concern - because its a consumer issue - something that does affect nearly everybody who is buying property. And its an interesting question to consider as to why contracts are offered by builders (many different builders throughout the country no doubt) with completion periods that extend longer than the Homebond Deposit protection period. 

If a builder is going to be delayed in the construction of a building site should the buyer be informed that the deposit protection period will expire as a result of the delays in building?

Again I want to point out that there was a condition within my contract that stated that my deposit was being handed over to the developer/builder. And I was aware of this when I signed the contract. I do not think that there are actually any standards with regard to where deposits are held - people just need to read their contracts carefully to determine what applies in their particular circumstances. 

Lastly I am not trying to give out about any advice from my solictor - about this Homebond issue - I have a good relationship and when I eventually do buy a house I will be asking for assistance again. I firmly believe that the responsibility lies solely with both the developer/builder and also the Government in the form of proper legal legislation to inform and guide buyers that their Homebond Deposit Guarantee may expire due to any possible building delays. 

This whole mess can only happen when there is no established legal frameworks in place to protect a buyer, and also lets not forget protection for the builder as well.

There really is a startling lack of legal protection at present.


----------



## Bronte

Plywood said:


> A court ordered that the deposits be returned by the solr and solr no 2 didn't have them anymore. Legal opinion was sought and the result was that solr no.2 was wrong to have forwarded them to the Bank.


 
I understand you don't want to say which case it was, could you tell us why the judge ordered the solicitor to return the deposit? The only reason I can see would be that the solicitor was negligent in handing it over to the builder in the first place but on what grounds.

It is interesting in Kate's post that there is apparently insurance in cases of deposit, I was not aware of this. Why didn't everybody just have insurance for the deposit if the homebond had time limits? 

In relation to the hardship of saving for deposits, I find it hard to believe that people who were going to purchase 500K houses have a problem now saving a new deposit. They were going to be able to pay 480K mortgages (based on 20K deposits) so how on earth were they going to repay such hefty mortgages? Something is not adding up in this. It's also madness that the deposit were not even close to 10%, no room for manoeuvre at all, and I wouldn't be surprised based on my experience on AAM if the deposits weren't borrwed as well. About a year ago (?) interest rates rose for a while, I do wonder how people on these large mortgages would have coped with even a 1% rise. 

I'm still waiting for one purchaser to prove how they are financially worse off because of this lose of deposit.

This whole purchase of property off plan was a complete collective Irish madness it seems to me. I dont' know about Laragan but as I'm interested in property I've visited many many housing estates both being built and completed and I am still amazed at the shoe boxes, lack of storage, lack of finish, no green areas, no parking, no public services. I imagine in the future a lot of them will become like wastelands and will probably be pulled down to build something more suitable for families and for proper collective living.


----------



## jack2009

andycole said:


> Hi everyone -
> 
> Jack that is interesting - with regard to the fact that they do mention Laragan as a subsidiary. However I think _*we need to be careful* _with posting anything around the issue of the Hanly Group company structure - the examiner did say that he could not go into the Hanly Group and other associated companies in order to refund our deposits - so I think the business structure in this case must be very complex with regard to company law.
> 
> My post is based on the Laragan Group, the information has been dowloaded from the CRO.  The "Hanly Group" is a different group of companies that I have not looked into.


----------



## samanthajane

Bronte said:


> Why didn't everybody just have insurance for the deposit if the homebond had time limits?
> 
> *I dont think anyone was aware untill now that it had a time limit of 24 months. When i purchased my house not once was this mentioned by anyone involved.*
> 
> 
> I'm still waiting for one purchaser to prove how they are financially worse off because of this lose of deposit.
> 
> 
> *They are angry at losing their deposits at the moment, which is understandable. When your angry and feel you have been done you tend to focus more on what you have lost and not what you have gained. *


----------



## andycole

Sorry Jack - just shows how complex this whole thing is. 




jack2009 said:


> andycole said:
> 
> 
> 
> Hi everyone -
> 
> My post is based on the Laragan Group, the information has been dowloaded from the CRO.  The "Hanly Group" is a different group of companies that I have not looked into.
Click to expand...


----------



## jack2009

Bronte said:


> I understand you don't want to say which case it was, could you tell us why the judge ordered the solicitor to return the deposit? The only reason I can see would be that the solicitor was negligent in handing it over to the builder in the first place but on what grounds.
> 
> _I dont understand why the case cannot be mentioned if a judge has made a decision then the decision is public information._
> 
> It is interesting in Kate's post that there is apparently insurance in cases of deposit, I was not aware of this. Why didn't everybody just have insurance for the deposit if the homebond had time
> 
> _Can only guess that the purchasers advisors failed for advise to do so._
> 
> In relation to the hardship of saving for deposits, I find it hard to believe that people who were going to purchase 500K houses have a problem now saving a new deposit. They were going to be able to pay 480K mortgages (based on 20K deposits) so how on earth were they going to repay such hefty mortgages? Something is not adding up in this. It's also madness that the deposit were not even close to 10%, no room for manoeuver at all, and I wouldn't be surprised based on my experience on AAM if the deposits weren't borrwed as well. About a year ago (?) interest rates rose for a while, I do wonder how people on these large mortgages would have coped with even a 1% rise.
> 
> _Well there are lots of possible reasons for this one being that at the time of purchase a young couple doing say professional training and knew that by the time the house was built that they would be on x and if there was any shortfall they could rent out a room or two.  However, now they are out of a job and have no house to rent out a room._
> 
> I'm still waiting for one purchaser to prove how they are financially worse off because of this lose of deposit.
> 
> _They are worse off because their deposits are gone!  The system should have ensured that deposits were available for refund to in the event that the build could not be completed in the agreed time frame.  Just like the way the depositors had to buy property creating negative equity if the build was compete.   People wanted their deposits before the examiner was appointed because they were fed up being held up.  If the company had returned the money these people would have the deposits available to them now!  I think the point is that these people were looking for their deposits back long before the examiner was appointed!_
> 
> This whole purchase of property off plan was a complete collective Irish madness it seems to me. I dont' know about Laragan but as I'm interested in property I've visited many many housing estates both being built and completed and I am still amazed at the shoe boxes, lack of storage, lack of finish, no green areas, no parking, no public services. I imagine in the future a lot of them will become like wastelands and will probably be pulled down to build something more suitable for families and for proper collective living.


 
_I totaly agree, it was madness and a sin with what the builders were getting away with but I think people felt that they were being forced to buy in this way because of the rate at which property prices were increasing.  I think a lot of people were just buying what they could to get on the property ladder. _


----------



## jack2009

andycole said:


> Sorry Jack - just shows how complex this whole thing is.
> 
> No problem, it is very complicated and there are a lot of issues and with the lenght of this post it is hard to keep up.


----------



## Caz

Hi, did anyone listen to Joe Duffy yesterday where a supplier was on and he said he had proof that Laragans didn't have the money to complete the builds since Sept 2006 he said that anyone can contact him.  I missed his name and was wondering did anyone else catch it?


----------



## jack2009

Caz said:


> Hi, did anyone listen to Joe Duffy yesterday where a supplier was on and he said he had proof that Laragans didn't have the money to complete the builds since Sept 2006 he said that anyone can contact him. I missed his name and was wondering did anyone else catch it?


 
Well if this is the case the company was trading while insolvent and is a serious no no and it proven the directors of the company can be held personally responsible for the debts of the company.


----------



## andycole

I was listening to this yesterday on the Joe Duffy show.
I think the company was Connelly Construction based in Drumcondra/Fairview.
However Joe did say that this cannot be legally or accurately determined if this indeed is the case - its just an accusation at the moment.
This is legally dangerous to discuss so we should leave this alone.



Caz said:


> Hi, did anyone listen to Joe Duffy yesterday where a supplier was on and he said he had proof that Laragans didn't have the money to complete the builds since Sept 2006 he said that anyone can contact him.  I missed his name and was wondering did anyone else catch it?


----------



## Caz

That's why I like to talk him.  My examiners document is with my solicitor so can't scan the suppliers names.  I don't want to say what he does or where he is located on this forum.


----------



## jack2009

andycole said:


> I was listening to this yesterday on the Joe Duffy show.
> I think the company was Connelly Construction based in Drumcondra/Fairview.
> However Joe did say that this cannot be legally or accurately determined if this indeed is the case - its just an accusation at the moment.
> This is legally dangerous to discuss so we should leave this alone.


 
I am nearly certain that this is the same creditor that was petitioning the High Court to appoint a liquidator but the Examiner was appointed in before the case was heard!


----------



## Kate10

HI everyone,

Jack the furniture example is not comparable.  If you buy a piece of furniture the shop undertakes to deliever it within a limited period of time.  In this situation people signed contracts with a very long construction period - in other words they agreed that the builder did not have to build or deliver the apartments for years.  They may have expected the apartments to be delivered sooner, but that is not what their contract said.

Re. the release of deposits - plywood there is nothing legally incorrect in releasing a deposit as long as both side agree to do so.  In the vast vast majority of housing developments in this country, purchasers agreed in their contracts that their deposits could be released to the vendor, subject to delivery of homebond/premier direct documentation on exchange of contracts.  To compare this to off-shore accounts and fraud on the Revenue is just stupid.  I don't know where your example is coming from, as you will not cite it, but the only way a solicitor could be at fault for releasing the deposits would be if he/she were not permitted to do so under the contract, but did so anyway.  That is a completely different situation.

Just to clarify when I mentioned insurance - homebond/premier guarantee are insurance policies.  I have seen contracts for UK property purchases which provided for the purchase of new insurance where there were delays in completing for whatever reason.  I've never seen anything like that in Ireland.

I think Andy's points are well made.  Frankly I think that the issue re the gap between the construction period and homebond cover is likely to be brought up in a law soc practice note or something similar, and solicitors and their clients will be less likely to accept such contracts in the future.

However, in terms of liability, it seems to me that the company has accepted that it is liable to the purchasers for the contract deposits.  Unfortunately, as it is insolvent, it cannot afford to repay them.  The only reason people are getting out of potentially ruinous contracts however, is because the company is insolvent.  Again I think the purchasers are bloody lucky.


----------



## jack2009

Kate, 

Are you actually saying that the builder has an infinate amount of time to complete the build?

My example is comparable in that I have been saying that it is not right/fair that the builder has so much protection and that they and can miss the original completion date with no penalty.  Also, not right that the period of the build is not covered by Homebond, considering the amount of similar developments! This practice as you say definately needs to be reviewed.

In the absence of homebond the builder should not be allowed to use deposits that should be available for refund should the builder be unable to complete the contract.


----------



## Bronte

I'm going to put this another way, which one of the 95 deposit holders would be happy today if Laragan was taken over by another builder who agreed to finish the estate at the prices contractually agreed. Do the same scenario, 1 year 2 years ago etc. So then tell me financially who is at a loss. The deposit holder today or the person who received or would receive a completed property. 

Kate in relation to the insurance, what a simple solution that would have been. In relation to the Law society it's like a case of horse and bolted. 

I don't understand why this could not be thought about before thousands of people signed contracts. I really do feel that a legal advisor has a duty of care to ensure their client a purchaser is protected but I keep getting told that the purchasers would have signed anything just to get on the property ladder. 

We have basically purchasers purchasing from a limited company, any limited company can go bust, the simple basics of company law would tell you that, and what do Irish people do, hand over deposits in large numbers and amounts with completion dates that mean diddly squat, meanwhile there are overruns on completion and circumstances change and people who are not now eligible for a mortgage are forced to complete as they signed a contract with no mortgage clause. Somewhere in there is negligence.


----------



## jack2009

Bronte said:


> I'm going to put this another way, which one of the 95 deposit holders would be happy today if Laragan was taken over by another builder who agreed to finish the estate at the prices contractually agreed. Do the same scenario, 1 year 2 years ago etc. So then tell me financially who is at a loss. The deposit holder today or the person who received or would receive a completed property.
> 
> Kate in relation to the insurance, what a simple solution that would have been. In relation to the Law society it's like a case of horse and bolted.
> 
> I don't understand why this could not be thought about before thousands of people signed contracts. I really do feel that a legal advisor has a duty of care to ensure their client a purchaser is protected but I keep getting told that the purchasers would have signed anything just to get on the property ladder.
> 
> We have basically purchasers purchasing from a limited company, any limited company can go bust, the simple basics of company law would tell you that, and what do Irish people do, hand over deposits in large numbers and amounts with completion dates that mean diddly squat, meanwhile there are overruns on completion and circumstances change and people who are not now eligible for a mortgage are forced to complete as they signed a contract with no mortgage clause. Somewhere in there is negligence.


 
Bronte I agree with you but I feel that home buyers being consumers buying into something so complicated should have been protected.  I do not think that the arguement as to wheather the deposit holders are or are not worse off is the only issue at hand and that needs to be resolved going forward.


----------



## Plywood

Quote:
 	 	 		 			 				 					Originally Posted by *Kate10* http://www.askaboutmoney.com/showthread.php?p=889817#post889817 
_Re. the release of deposits - plywood there is nothing legally incorrect in releasing a deposit as long as both side agree to do so. In the vast vast majority of housing developments in this country, purchasers agreed in their contracts that their deposits could be released to the vendor, subject to delivery of homebond/premier direct documentation on exchange of contracts._

Kate

I think its healthy to explore our respective motivations for the posts we put up. 

I have no motive for the statements I have made except to alert people who could potentially be stung for their deposits that they may have a means of redress. A solicitor however could potentially be exposed to possible claims if the great unwashed became aware that solicitors make mistakes and that there is a means for people to obtain compensation. 

If the contract is based on the standard terms and conditions issued by the Law Society and they aren't amended, and the developer fails to complete the house/apartment etc within a reasonable timeframe a borrower can be successful in an action to withdraw from the purchase. This has happened in a number of developments, two of which I am familiar with. It just so happens that in one of these developments the solicitor for the developer forwarded the deposits to the bank when he was confirming that X number of new contracts had been signed. In the the other the solicitor for the developer refused to forward the deposits on the basis that he was holding them in trust for the purchaser pending completion of the houses.

Some purchasers in both developments took legal action to withdraw on the basis of late completion (not non completion). The court ordered that the purchasers should have their deposits returned. Obviously the solicitor who held them in trust was correct in his actions and this has been confirmed to me by an independent solicitor, from a top firm, who specialises in property.


You can disagree if you like but this is fact, and my strong view (and I'm entitled to it) is that even if the law didn't state it, it could not be morally correct or proper for a developer to be given the deposits of purchasers, to be used as his equity input to the development, thereby exposing the purchasers to the risk involved.

Banks provide the debt.
Promoter (developer) provides the equity
Purchasers purchase the product
 	Quote:
 	 	 		 			 				 					Originally Posted by *Kate10* http://www.askaboutmoney.com/showthread.php?p=889817#post889817 
_To compare this to off-shore accounts and fraud on the Revenue is just stupid. I don't know where your example is coming from, as you will not cite it, but the only way a solicitor could be at fault for releasing the deposits would be if he/she were not permitted to do so under the contract, but did so anyway. That is a completely different situation._

My comment was an analogy (you don't normally have to state that it is an analogy). You made the point that it was bog standard practice for deposits to be forwarded to the developer. I made the point and I stand by it, that common practice (or bog standard as you so eloquently put it) does not establish a legal basis for the practice. I compared it to the situation with non resident accounts. Banks openly promoted these to depositors who were not 'non resident'. When the revenue decided to crack down on the practice, the defence that "everyone was doing it" did not hold any weight.


----------



## mf1

"Some purchasers in both developments took legal action to withdraw on the basis of late completion (not non completion). The court ordered that the purchasers should have their deposits returned. Obviously the solicitor who held them in trust was correct in his actions and this has been confirmed to me by an independent solicitor, from a top firm, who specialises in property."

So, can you give a citation? If the Court so ordered, it would have made big news. It would also have had a huge impact on solicitors who would have been alerted by each other and the Law Society as to a possible exposure.

You are actually incorrect  in your view of the law. If the contract provides for the forwarding of the deposit to the vendor/builder, which was the most usual scenario, then, if later the purchaser becomes entitled to withdraw from the contract and is entitled to the return of the deposit he looks to the vendor/builder , not the vendors solicitor. 

It will also depend at what stage of the  downturn these events happened. A year or so ago, a vendor /builder may have had the funds to return the deposits and may have done so voluntarily but its more likely now that they do not have the funds. 

mf


----------



## Kate10

Plywood,

Let's simplify things for a second, shall we?

My point is that if a contract, properly negotiated between two legally represented parties, allows for the release of deposit monies to a vendor, there is nothing legally incorrect in doing so.

Do you disagree with this?  You keep referring to your example, but you have not said what the terms of the relevant contract were.  

Please either give a citation, or post the specific special conditions in the contract relating to the release of the deposits.

Secondly, you seem to believe that a vendor's solicitor has some sort of moral duty to a purchaser.  I believe that a solicitor has a moral and ethical duty to practice in a certain way, but it sounds to me like you think a solicitor acting for a vendor should put the purchaser first.  The logic behind this escapes me, I'm afraid.  I think you misunderstand the role of the solicitor.


----------



## andycole

The Irish Times Editorial today - Monday June 29th:

[broken link removed]

*Lost deposits*

_"Among the ranks of the disillusioned are 95 homebuyers who paid deposits to buy apartments in Dublin over two years ago. The apartments, however, were either not built or not completed. And the buyers have found now that they have lost their deposits, after Laragan Developments, a property company, was placed in examinership"_

_"Nevertheless, to ensure what has happened cannot be repeated the terms of the Homebond scheme must be changed. The Construction Industry Federation should now accept the need to guarantee all deposits made by housebuyers, and without a time limit. 

A failure to reassure homebuyers that their deposits are safe, and recoverable, can only further depress a depressed property market."_


----------



## onq

I may be wandering a little off the point here and I apologize in advance of so.
I not that all below comment is made as fair comment in the public interest.

I think there are three separate issues here:


the legality in principle of non-refudable deposits -vs- protection for the consumer/purchaser
the completion of the contracted matter in a timely manner to avail of the Homebond guarantee scheme.
the credibility or otherwise of the Homebond scheme having such a limited time period and from a purchase point start date.
  I understand Brendan's point in relation to the avoidance of negative equity, but I think the other purchasers points about the loss of their deposits and having no dwelling are well made [I'm paraphrasing].
In my personal opinion in an ideal world the deposit should have been returned once the builder exceeded the term and effectively broke the contract - having broken the contract what basis did he have to retain a "deposit"?

The law allowing him to have use of the depositors money all this time with no recourse and no end product [even one in negative equity] needs to be looked at.
On this latter point, and I may stand corrected here, the local authority as planning authority and building control authority have five years from the date of completion within which to take action if something is built in breach of either body of law.

In relation to the contract, there appears to have been trading on market position by many developers looking for long lead in periods.
Some of these periods seem inordinately long, but laypeople can fail to take account of the long delays that planning and High Court actions can bring to the delivery of a competed development.
That having been said two and a half years seems inordinately long if no planning or legal problems had arisen.

I would be surprised if it the Home Bond Guarantee Scheme Purchase Date  equates to the date the deposit is handed over, but that's the meaning I've taking from what's been posted.
A deposit is one thing in legal terms, but I understand that the actual purchase isn't made until the contracts are signed and returned with the money and keys being exchanged.

Separately but on a related point, it seems only fair and reasonable that any kind of guarantee scheme should be run from a completion date as opposed to a purchase date - after all, what is there to guarantee until the work is complete - are they guaranteeing incomplete work, and if so, how can they do that?

FWIW

ONQ.


----------



## Timbo

A couple of points worth adding to the pot here:

It was always the case that these deposits were going to the developer in order to provide cash flow and allow funding of the project. Any form of escrow was never cards (the developers put the projects together on the basis that the deposits would be forthcoming) and everyone knew that. So stop blaming others for your counterpary risk.
The homebond scheme was what it was. If you were worried about counterparty risk you should have taken steps yourself or not bought "off plans". Again, stop blaming others.
What exactly are you trying to achieve here? The words blood and stone immediately spring to mind.
Don't forget that *not all depositors' interests are aligned here*. Some have a stronger case for a deposit refund (from failure to perform) than others. Those "others" might find an alternative scheme could mean they are held to their contracts in order to pay the refunds for those released.


----------



## andycole

Hi Timbo - 

What exactly are you trying to achieve here?


Just to answer your question briefly - 

1. Generally just some clarification regarding the Homebond Insurance Certificate Scheme - and how it works - to seek the opinions of other people who hopefully may be able to offer some professional opinion if they work within Law, and also from people who are home owners themselves.

To ask some questions such as:

2. Can a builder offer a Homebond Guarantee when a Contract has a Completion Period that is longer than the Homebond Guarantee?

3. If a building project for Apartments and Houses is going to be delayed is a builder obliged to inform a buyer/deposit holder that their deposits will not be protected due to the ongoing delays in completing their Apartments and Homes?

I have mentioned earlier that I was aware that my deposit was being forwarded to the builder - this was a condition in the contract.

Well yes - the Homebond Scheme does seem to be what it was/is!
But I am asking opinions from people if they think that there could be some room for improvement with regard to the Homebond Scheme - for example should the protection period for Deposits be extended until the Completion Date? 

This has been a good thread here on Askaboutmoney - and I have found it informative to read - some technical information is complex legally which is difficult to understand myself but are comments from people who I think are working in the legal profession? But its interesting to also hear their views on this Homebond Scheme. 

But I think's it unfair to say that the focus has been on "blaming others".


----------



## southside

Very interesting / informative thread. Thank you to all those who take the time to contribute. 

Clearly there are questions to be answered in relation to the effectiveness of the homebond product.  If it doesnt do what it says on the tin, then what was the point. Ill watch this one from afar. 

*The point re termination of contract due to late completion is very important. I'd just like to emphasise how useful it would be to have a reference to the case in question. *

*Finally, a point for the solicitors who provide very interesting insight here.*  In the past I have seen legal opinions from senior council support the setting aside of contract terms where both parties were professionally advised on the basis that the terms were (among other things) unbalanced or that the intent of the parties entering into the contract were not reflected in specific clauses and both parties were aware of this at the outset.  This wasin an english law / jurisdiction environment.  Surprised me at the time (but not the lawyers from a top 4 UK firm that were representing us at the time).  

Reason that I mention this is that I suspect that many property purchasers have a stronger position in relation to repudiation of long dated purchase contracts under law than a strict interpretation of the contract may suggest.  

Any thoughts?

*P.S.  Thanks again to all those contributors who really do help people who would otherwise have nowhere to go for some common sense advice.  *



mf1 said:


> "Some purchasers in both developments took legal action to withdraw on the basis of late completion (not non completion). The court ordered that the purchasers should have their deposits returned. Obviously the solicitor who held them in trust was correct in his actions and this has been confirmed to me by an independent solicitor, from a top firm, who specialises in property."
> 
> So, can you give a citation? If the Court so ordered, it would have made big news. It would also have had a huge impact on solicitors who would have been alerted by each other and the Law Society as to a possible exposure.
> 
> You are actually incorrect in your view of the law. If the contract provides for the forwarding of the deposit to the vendor/builder, which was the most usual scenario, then, if later the purchaser becomes entitled to withdraw from the contract and is entitled to the return of the deposit he looks to the vendor/builder , not the vendors solicitor.
> 
> It will also depend at what stage of the downturn these events happened. A year or so ago, a vendor /builder may have had the funds to return the deposits and may have done so voluntarily but its more likely now that they do not have the funds.
> 
> mf


----------



## Sconhome

jack2009 said:


> There were some posts about Laragan Developments Limited being a subsidiary of Hanly Group. So thought I would make this post to clarify if Laragan is or is not a subsidiary.
> 
> I have just had a quick scan of the last annual return submitted by Laragan Developments for the year ended 31 December 2007. They state that Laragan Developments is a 100% subsidiary of Laragan Holdings Limited. They also include a note that states "the company guarantees the liabilities of its subsidiaries in Ireland".
> 
> Can anyone confirm if any of these subsidiaries have been included in the examinership process?  The financial statements show total assets less current liabilities of c. €9million.  Considering we are not almost 18 months on it is easy to imagine that the group is now insolvent!
> 
> The financial statements also mention that the company is controled by Alan Hanley, this would appear to confirm Paul McCanns statement.



Under section 17 of the Companies act this is the case. The problem is in the examinership this fact was not allowed be brought to light and when the question was placed by trade creditors, we were ignored as the process had already been ratified irrespective of the vote. The weighted creditors (Anglo & Revenue) accepting the offer supercedes all other votes.

Laragan accounts for 2008 are in the middle of lodging with CRO, due within the next 24 days. The section 17 statement should be included in these returns.

Case is in the High Court next tuesday.


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## Sconhome

Sorry may have the section number wrong re the companies act, dont quote me on that, all other info is correct.


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## jack2009

Sconhome said:


> Sorry may have the section number wrong re the companies act, dont quote me on that, all other info is correct.


 
Hi Sconhome, 

No you are referring to the correct act.  

I can understand why the Examiner did not entertain questions of this nature.  The Examiner is only there to investigate the possible survival of Laragan and no other company within the group.  The Examiner is not there to necessarily get the best deal for the company's creditors.

Section 17 would kick in if Laragan was placed into liquidation.  However, this may be on no use if the whole group is insolvent!

Can I ask how you learned about the completion of the financial statements.

Regards

Jack.


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## Sconhome

Jack,
B1 annual return has been received by CRO up to 09/2008, the actual account details have not been received or possibly not yet posted by CRO for this period
This information has been circulated among the trade creditors.


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## jack2009

Sconhome said:


> Jack,
> B1 annual return has been received by CRO up to 09/2008, the actual account details have not been received or possibly not yet posted by CRO for this period
> This information has been circulated among the trade creditors.


 
That B1 has accounts for the year ended 31 December 2007 attached to it and is available from CRO!


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## andycole

The confirmation hearing for the Scheme of Arrangement put forward by the Examiner is on Tuesday 7th July. With that in mind can I ask if anyone can advise on the format that this confirmation hearing will take? For example are creditors allowed to raise / ask questions to the Judge at this hearing? Or is the protocol that any issues which a creditor wishes to raise or feels is important for consideration - must be submitted in advance?

I wish to attend the confirmation hearing myself - but I am looking for advise on what will happen on the day.

Thanks.


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## jack2009

Andy I would suggest you get your lawyer to represent you as Judges like questions raised/asked in a particular tone but.  Also, it may be inappropriate to ask some of the questions you may have so I would suggest that you run your questions by your lawyer.

However, you may find that there is a creditor already contributing to this forum who may plan to attend on 7 th July so perhaps you could team up with them!


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## foxylady

Plywood said:


> Foxylady
> 
> If the contract was bog standard that means that it was governed by the Law Societies standard terms and conditions of sale. Under these terms and conditions the solr is supposed to retain the deposit as it is refundable in the event that the builder doesn't complete. Obviously if it is forwarded to the developer he couldn't get it back as it will have gone into cashflow. If this is the case you can claim against your solicitors professional indemnity cover.
> 
> I suspect that it wasn't a bog standard contract but if this is the case and your solr told you it was, you could claim against his PI on this basis too, so all may not be lost.
> 
> I have to say that I think the fact that this guy is currently building a 10,000 sq ft house for himself in Roscommon and driving around in an extremely flash car when his development activities are causing so much hardship is distasteful to say the least.


 

Plywood can i send you a pm as I have a question for you?


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## MOB

Just a quick note to add;  the limitations on Homebond cover are very clearly set out in the Homebond Guarantee documents.  This used to be printed on the 'HB10' and 'HB11' documents; then it was included in a separate booklet which came with the HB10 and HB11.  Policy documentation has changed again recently. But the point is, the information was always there for anyone who wanted to read it.  It is entirely possible that some solicitors may be found to have been negligent in not specifically bringing this to attention of clients - but I think this finding ( if made) will be harsh.   Builders have been goiing bust for years.  Buying off plan is inherently risky.  Such is life.


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## foxylady

MOB said:


> Just a quick note to add; the limitations on Homebond cover are very clearly set out in the Homebond Guarantee documents. This used to be printed on the 'HB10' and 'HB11' documents; then it was included in a separate booklet which came with the HB10 and HB11. Policy documentation has changed again recently. But the point is, the information was always there for anyone who wanted to read it. It is entirely possible that some solicitors may be found to have been negligent in not specifically bringing this to attention of clients - but I think this finding ( if made) will be harsh. Builders have been goiing bust for years. Buying off plan is inherently risky. Such is life.


 
Mob speaking for myself , I was not aware of the time limits on this and nor was it pointed out on signing contracts. Also our solicitor allowed the contract to be extended from 18 to 24 months when the time limit would have already expired without gaining any further insurance or pointing this out to us at the time.


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## mf1

foxylady said:


> Mob speaking for myself , I was not aware of the time limits on this and nor was it pointed out on signing contracts. Also our solicitor allowed the contract to be extended from 18 to 24 months when the time limit would have already expired without gaining any further insurance or pointing this out to us at the time.



Do you think your solicitor is solely responsible for this situation? 
Do you think the economy has anything to do with it? At any stage, before the Examinership process, did you have any concerns about the builders liquidity and did you consider what would happen if they went bust?
Do you think your solicitor should be held responsible for paying you your deposit?  
What steps have you been taking to make yourself aware of your legal remedies - Over the years, since this saga first started unfolding?
Have you paid your solicitor? 

mf


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## andycole

Each person has to take resonsibility for signing the contract that was put in front of them - the deposit was being forwarded to the builder in this example - this was a condition of the contract - I was aware that the deposit was being forwarded to the builder - and as this condition was stated clearly I personally feel no one could claim confusion about this - so again each buyer has to take responsibility in being aware that this was happening.

In terms of educating ourselves - presently I am reading the following:

National Consumer Agency - The Home Construction Industry and the Consumer in Ireland - Volume 4. 

This is a review of insurance issues - dated November 2008.

In particular the Homebond Insurance Deposit Guarantee is very interesting - especially as I have posted about possible lack of protection that this gives buyers - however this is commented upon in this review.

Recommendations are made within this report also - and these are well made. 

So again I do believe that every person has to take personal responsibility in terms of educating themselves about the conditions that appear in contracts. 

However is this not a valid point - most people only buy property once, twice or probably at most three times during their lives? But building developers and solicitors are involved in property contracts nearly every week. So in terms of experience and understanding the advantage lies with the developers who write up these contracts and also the solicitors who are involved in reviewing these contracts.


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## foxylady

mf1 said:


> Do you think your solicitor is solely responsible for this situation?
> Do you think the economy has anything to do with it? At any stage, before the Examinership process, did you have any concerns about the builders liquidity and did you consider what would happen if they went bust?
> Do you think your solicitor should be held responsible for paying you your deposit?
> What steps have you been taking to make yourself aware of your legal remedies - Over the years, since this saga first started unfolding?
> Have you paid your solicitor?
> 
> mf


I dont think he is solely responsible however I do think he has a lot to answer for. we are first time buyers an not solicitors so not au fait with building agreements or contract. We hired our solicitor in good faith.
All concerns with the development were communicated to the solicitor and in fact everything that was found out about the development was us feeding the info to him and this company seemed to be having problems a long time ago
.
and to answer your question should the solicitor pay the deposit, well if he has messed up well then yes he should be liable for his mistakes


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## mf1

"and to answer your question should the solicitor pay the deposit, well if he has messed up well then yes he should be liable for his mistakes"

But can you see that this is the million dollar question? Has your solicitor messed up?

Taking everything into account, is he solely responsible? I think the answer to that is no. I don't know how you behaved during the process, did you ask questions,   did you  seek to educate yourself on what the process was all about or did you blindly follow everyone else who was buying off the plans? And if the solicitor had spent several hours with you explaining everything, would you have listened and made a calculated decision? I think the answer to that is no - my view is that most ftb's buying off plans are more interested in the flooring and window dressing than in this huge investment. 

So, here is another question - are you going to sue your solicitor for your loss? And if everything had gone ahead and you were now in negative equity, so that your loss is considerably less does that make any difference to your thinking? Because if you sue, you will have to prove that this solicitor was negligent and that  your current loss stems from that. I don't think you can make that case. 

There is a big difference between smarting over a deposit loss and trying to fix blame on someone , anyone  AND proving that a solicitor should be held solely responsible for the multiplicity of issues that led to that deposit  loss. 

mf


----------



## foxylady

mf1 said:


> "and to answer your question should the solicitor pay the deposit, well if he has messed up well then yes he should be liable for his mistakes"
> 
> But can you see that this is the million dollar question? Has your solicitor messed up?
> 
> Taking everything into account, is he solely responsible? I think the answer to that is no. I don't know how you behaved during the process, did you ask questions, did you seek to educate yourself on what the process was all about or did you blindly follow everyone else who was buying off the plans? And if the solicitor had spent several hours with you explaining everything, would you have listened and made a calculated decision? I think the answer to that is no - my view is that most ftb's buying off plans are more interested in the flooring and window dressing than in this huge investment.
> 
> So, here is another question - are you going to sue your solicitor for your loss? And if everything had gone ahead and you were now in negative equity, so that your loss is considerably less does that make any difference to your thinking? Because if you sue, you will have to prove that this solicitor was negligent and that your current loss stems from that. I don't think you can make that case.
> 
> There is a big difference between smarting over a deposit loss and trying to fix blame on someone , anyone AND proving that a solicitor should be held solely responsible for the multiplicity of issues that led to that deposit loss.
> 
> mf


 Before signing contracts we asked plenty of questions and whether or not we needed to read the contract and we were told no its straightforward, everything above board. Also the solicitor we hired passed us onto someone else cos he was too busy and then someone else could never or maybe would nevre answer our queries which led us having to go above them, so I dont think this was good practice. Do you?


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## mf1

I think we will have to agree to disagree on the respective responsibilities of you, your partner and your solicitor. I don't think the solicitor is responsible for your predicament - I think it is a combination of many factors. You have posted about your predicament many times in the past (approx) 18 months and received some very good advice.

I have a mantra in my office - it is "Shurely Shomebody Elshe Should be held Reshponsible  for Thish". As in, bad things should only happen to other people, not to me. And when they hapen to me, then I want somebody else to blame. 

My clients hate it but they would hate it even more if I did not try and point out the holes/flaws/ downside of their grievances. 

I would just say to you that just because you are aggrieved that it does not automatically mean there is someone who will be held responsible. 

mf


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## foxylady

mf1 said:


> I think we will have to agree to disagree on the respective responsibilities of you, your partner and your solicitor. I don't think the solicitor is responsible for your predicament - I think it is a combination of many factors. You have posted about your predicament many times in the past (approx) 18 months and received some very good advice.
> 
> I have a mantra in my office - it is "Shurely Shomebody Elshe Should be held Reshponsible for Thish". As in, bad things should only happen to other people, not to me. And when they hapen to me, then I want somebody else to blame.
> 
> My clients hate it but they would hate it even more if I did not try and point out the holes/flaws/ downside of their grievances.
> 
> I would just say to you that just because you are aggrieved that it does not automatically mean there is someone who will be held responsible.
> 
> mf


 

I understand what you're saying and will also agree to disagree as we could be arguing this back and forward forever otherwise.


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## Madangan

Just to add my tuppence worth as a solicitor and purely on the issue of whether a solicitor may be held negligent and liable for the loss of the deposit in any particular case.

For what its worth I think a solicitor who did not point out to their clients all the pitfalls of buying off plans where there wasnt even a hole in the ground at the signing of contracts could be held negligent. One of the pitfalls is the potential expiry of the Homebond deposit cover. 

Now I know from bitter experience that at the height of the madness you could be almost eaten alive by ones clients if one had the temerity to suggest that there was a flaw on title or that contracts were unfair or there was a risk etc... and that maybe clients should walk away from the purchase of their "dream home", I certainly saw the eyes of my clients glaze over when I pointed out all sorts of horrors and having finished speaking would inevitably hear "Yeah thats terrible can I sign my contracts now?" so I dont doubt that solicitors who did point out the problem with the time limits/Homebond deposit etc.. would for the most part have been ignored but unfortunately for my colleages who did not point out the risk that may not get them off the hook.

I also agree that most of those who lost their deposits would prefer that than to have to complete their purchases at the old high price and would happily have walked away from the deposit if given the option by the builders.

However the argument can be made that had they been told by the solicitor about the danger to the deposit they would have walked away and still have the deposit or have bought elsewhere and long since be in a completed dwelling or as time limits edged closer taken action to get back the deposit or negotiated with the builders to request Homebond to extend the timelimits or that the deposit would not be handed over at all
to the builder. As they were not told of the risk they had no opportunity or so the argument may go of doing any of the above(I agree that the chances of them having successfully done any of the above were slim to none).

So while I agree that all the purchasers are damn lucky not to have to proceed with their purchases and are only losing their deposits I do believe that some solicitors may be at risk of being held liable and if so I can only say but for the grace of god go I


I think however that if the timelimits for completion in the Laragan contracts were actually within the Homebond Time limit purchasers would not be in a better situation as even when the time for work to be completed expires purchasers are not automatically let out of the contract and in order to be let out ( and get back their deposit)would have to sue the builder for breach of the building agreement. There is no guarantee of that having been successful. The reality is that, and hindsight is wonderful,  the Homebond deposit cover has been flawed from the very start and the standard agreed Building agreement is also flawed and inadequate on this issue.

All of which is cold comfort to the purchasers and their solicitors!


----------



## andycole

Hi Madangan - 

Absolutely I agree with your points -  

_"I also agree that most of those who lost their deposits would prefer that than to have to complete their purchases at the old high price and would happily have walked away from the deposit if given the option by the builders"_

And definitely yes;  _"all the purchasers are damn lucky not to have to proceed with their purchases and are only losing their deposits"_

I don't believe that solicitors are at fault in any way for people who find themselves in a similar situation to the Laragan Developments Ltd situation. People are responsible for reading/understand any contracts put in front of them and also for signing the contracts.   The real fight is with the Construction Federation Industry and Homebond, _and also the Irish Government for not realising a proper set of regulations to govern the Construction Industry, Irish Developers etc._  Wherever self regulation is the norm within any one industry - its proved disastrous for consumers. The standard building agreement will probably be reviewed.

I recommend everybody read this report published in November 2008:

National Consumer Agency - The Home Construction Industry and the Consumer in Ireland - Volume 4.  This is a review of insurance issues.

The recommendations put forward are excellent - plain to read and understand for anyone. In the context of my contract I can easily see how it applies - and can be used as a guide for the future. One point mentioned is that any deposits paid to a developer will not be covered by Homebond Insurance - if these payments are paid before the house/apartment/duplex is registered with Homebond by the builder. This report highlights this as a risk to consumers and is termed a risk of under insurance I think. I am uncertain at the moment if Laragan Developments Ltd did register the apartments and duplexes at Milners Square with Homebond - before taking deposits from buyers.


----------



## AlbacoreA

IMO Its not the solictors remit to give you professional investment, or financial advice, regarding buying off the plans or in property investment in general. However I would expect them to give advice if the contract is weak or has legal pitfalls. Its a complete cop out to say the buck stops with the client if some legal aspect is missed. Thats making a strong case for not using a solictor at all. Just because someone won't act on advice given. Doesn't mean you shouldn't give that advice. Or that theres a professional obligation even if theres no legal obligation to do so. 

I think most people in this thread are aware that the current process is deeply flawed. Its disappointing that its the National Consumer Agency that has to point this out, instead of the "professional" bodies involved.


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## FKH

It's certainly not a solicitor's remit to give investment or financial advice. A solicitor steps in when the decision to buy property has been made by the purchaser. The solicitor then deals with the legal aspects of the property and raises any issues that they need to. If there is a problem with the property it is brought to the attention of the buyer.

I have on  occassion informed people of the time frame for completion and that the Building Agreement is in the builder's favour and usually they are not interested or tell you that the estate agent told them the property would be ready in a couple of months. I explain Homebond is limited protection with time limits but again so long as people hear "Homebond" after that they lose interest.

To compare I know people who will take their car to the garage who take no interest in what the mechanic tells them about their car or what has to be done to it.


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## AlbacoreA

Ummm, considering the poor rep of the car industry, servicing, cartels, overharging etc, analogies may have different interpretations than intended. 
Perhaps this is an analogy too far. But is it reasonable that a client be responsible for something a mechanic missed considering the clients lack of mechanical or technical knowledge? Contracts are rarely simple.


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## mf1

I think the only real issue for solicitors is the matter of the time limit on Homebond. 

Everything else, is down to the headlong rush to get on the property ladder at all costs, the inherent issues/risks of buying off plans and dealing with limited liability companies , the global recession and the massive slump in property prices. 

So - are solicitors responsible for their clients' woes ? Should they be held responsible for the loss of the deposit? Would a Court find that if a Solicitor had failed to  point out all the risks of buying off plans, dealing with limited companies, and the fact that property prices could slump, and if the clients truly, truly, hand on  heart say that if they'd known all this and even at the height of the frenzy, they would deffo not have gone ahead - would a Court find that the solicitor should pay up for their lost deposits? 

Or will the Court say : are you not relieved not to be stuck in a seriously devalued property? And you are actually in a nett gain situation? 

So, I think we're back to the issue of smarting over the loss of the money and wanting the butter on both sides of the bread. 

And maybe, maybe, we will see a major sea change in the way that buying off the plans operates. It is risky - for the purchaser, if it all goes pear shaped and for the developer, if the purchaser wants or needs out. I cannot see a bank being willing to fund a development unless there are purchasers  contracted to buy.


mf


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## AlbacoreA

mf1 said:


> ...Or will the Court say : are you not relieved not to be stuck in a seriously devalued property? And you are actually in a nett gain situation?
> 
> So, I think we're back to the issue of smarting over the loss of the money and wanting the butter on both sides of the bread. ...


 
+1

I hope theres a sea of change. I'm not expecting one.


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## andycole

Hi Mf1 - 

Today the Scheme of Arrangement is being decided upon by Justice Clarke at the 4 Courts. So it will be interesting to see what comments or recommendations that may be made by the Judge. And as you say will the Court say : are you not relieved not to be stuck in a seriously devalued property? And you are actually in a nett gain situation? 

I am now beginning to think that Homebond may not protect deposits - the National Consumer Agency published in November 2008 a publication regarding Insurance Issues relating to purchases of property. Regarding deposits, it says that any deposit paid to a builder for property purchased will not be protected if this payments is paid before the property is registered by the builder with Homebond.

I am not certain of the implications of this - for example if a builder who is starting to build a 300 house development - will he register all 300 houses/apartments with Homebond before he starts to sell these properties and before he starts to accept deposit payments from buyers? - if he does not then any deposit paid by any buyers will not be protected! This is how I read the situation now.


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## AlbacoreA

Don't want to drag this off topic but TBH before this thread I was not aware that the Homebond protected deposits at all. Even in the limited scope that it appears to. I'm sure the vast majority of people don't. TBH the homebond covers very little other than structural issues. There is a need for some other cover for poor workmanship and other problems that are not structural. Seems strange you can return low value consumer goods but you can have major problems with a house and have no cover what so ever as a consumer.


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## mf1

"I am not certain of the implications of this - for example if a builder who is starting to build a 300 house development - will he register all 300 houses/apartments with Homebond before he starts to sell these properties and before he starts to accept deposit payments from buyers? - if he does not then any deposit paid by any buyers will not be protected! This is how I read the situation now."

If I understand you correctly, you are asking if (a) booking deposits and (b) contract deposits were protected by Homebond. As I understand it, unless the properties were registered with Homebond ( and that is one thing the solicitors did always check), nothing was ever protected. If the property was registered with Homebond, then the deposit was protected - subject to the time limit and also to a monetary limit for each developer. I understand that this particular developer would not have had sufficient cover for all the deposits.

mf


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## andycole

Thanks MF1 for reply - 

The Homebond issue was discussed yesterday and importantly it was pointed out that the Homebond Scheme would not have covered the amount of deposits owed. The Homebond Scheme has a limit of just over €0.5m, whereas the deposits in this case amount to €1.44m.


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## AlbacoreA

Has a limit of 0.5m per builder? Can't see how that would work


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## gillarosa

According to the Irish Independent today the Court has decided the Depositors can buy the properties at current market value.


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## foxylady

gillarosa said:


> According to the Irish Independent today the Court has decided the Depositors can buy the properties at current market value.


 
Thats so kind of them   as people do want to live on a building site


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## andycole

If a creditor is considering this offer by Laragan Developments LTD  - 
I would recommend that they review Volume 3: Review of legal issues: Dated November 2008. This is a publication by the National Consumer Agency titled "The Home Construction Industry and the Consumer in Ireland".

The reason why I mention this report within this context is that Section 9 "Unfair Contract Terms" highlights 16 terms that have been considered unfair. 

_"Generally, unfair terms are severable and will not result in termination of the contract. In other words, the unfair term can be severed from the contract, and the rest of the contract will remain effective" _

_"Additionally it mentions that there has been extensive commentary on these unfair provisions, some of which have suggested that the Order may not have gone far enough"_

Have a look at these conditions - 

1. That any site layout or plan is for identification purposes only, and does not necessarily show the correct location, size, or area of the site.

2. That the contractor will be entitled to vary or alter the development in any manner, subject to planning permission.

Both of these conditions appear within the contract offered to buyers for the Milners Square Complex. I believe that anyone considering taking up the offer by Laragan Developements LTD to be able to purchases their apartments now at today's prices plus their €15,000 Deposit paid - that it is in your interest to suggest to your solictor that you are requesting the removal of these conditions from your contract. 

I cannot say with certainty that other similar conditions appear within the contracts offered by Laragan Developments LTD.


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## AlbacoreA

andycole said:


> ..._"Generally, unfair terms are severable and will not result in termination of the contract. In other words, the unfair term can be severed from the contract, and the rest of the contract will remain effective" _
> 
> 
> Have a look at these conditions -
> 
> 1. That any site layout or plan is for identification purposes only, and does not necessarily show the correct location, size, or area of the site.
> 
> 2. That the contractor will be entitled to vary or alter the development in any manner, subject to planning permission.....


 
Those kind of terms should not be allowed by law.


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## andycole

For the Information of the reader - 

A Homebond policy has a payout ceiling of €508,000 per development.


Google's Cache of [broken link removed]. It is a snapshot of the page as it appeared on 7 Jul 2009 23:46:17 GMT


_"The court also heard that the Homebond insurance policy, which was taken out by depositors in 2006 to cover their deposits had run out after two years. But even if the policies had not run out, there would not have been enough money in it to cover all of the deposits.

The policy had a payout ceiling of €508,000 per development and the company owed deposits of €1.44 million.

Mr Justice Clarke said he suspected the ceiling on protection was news to a lot of people who felt they were protected by the policy.

“It came as a surprise to the examiner,” Mr Dunleavy said."_


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## foxylady

AlbacoreA said:


> Those kind of terms should not be allowed by law.


 

The whole "standard " building agreement need to be looked at or else called a template as , developers seem to be able to take out what they dont like and stick in whatever things they do like.


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## foxylady

_"The court also heard that the Homebond insurance policy, which was taken out by depositors in 2006 to cover their deposits had run out after two years. But even if the policies had not run out, there would not have been enough money in it to cover all of the deposits._



Surely this would be deemed as wreckless trading


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## AlbacoreA

The whole process is a shambles. This collapse has brought it clearly into focus. The "professionals" end up looking pretty shabby tbh. The public is being sold snake oil. Theres more consumer protection on a €10 watch than a 1 Million Euro house.


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## mf1

"The public is being sold snake oil. "

The public were like lemmings in their rush to buy snake oil! If you'd put a brick wall in front of them they would have torn it apart with their bare hands to get to the other side. 

mf


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## AlbacoreA

I guess people should do their own legal homework rather than paying anyone else to do it.


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## mf1

AlbacoreA said:


> I guess people should do their own legal homework rather than paying anyone else to do it.



You know - its just sooooooooooooo easy to take a pop. 

But solicitors are not parents. They can only advise - people need to make their own decisions. And when people are engaging in the biggest transaction of their lives, they should engage with what is happening. Not do the silly, tra la tra la tra la crap of just thinking  about floor covering and not what would happen if, or should I be doing this or can I afford it?  

And - if what you mean is that the solicitors should have known that the property market would collapse, that the developers could collapse and that the economy would go into free-fall! What were going to do - refuse to act for a  client who wanted to buy and who knew that if they did'nt someone else would take their place? 

So far, one person on this board appears to be blaming her solicitor. andy cole is very sensible and has  made it quite clear that he knew what he was doing when he did it - he just did not anticipate the above. No-one did. But the whingers who are now running around trying to apportion blame on everyone else - but not them, oh no sirree- deserve nothing.  

mf


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## Brendan Burgess

Were the limitations of the Home Bond scheme public knowledge two years ago? 

I can't remember seeing any posts on Askaboutmoney or elsewhere, telling people to be careful about Home Bond. That it expires after 2 years and that there is a maximum claim per builder.

Brendan


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## mf1

It was actually quite clear in the Homebond paperwork - it was just never an issue before. We have'nt had had such overruns and insolvency for years. 

mf


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## foxylady

mf1 said:


> It was actually quite clear in the Homebond paperwork - it was just never an issue before. We have'nt had had such overruns and insolvency for years.
> 
> mf


 
If so why arent people told, and by the way what I'm blaming my solicitor is on poor or rather lack of advice . I'm not saying all solicitors are the same however they're not all saints either


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## andycole

Not really relevant to what the Judge is responsible for - specifically to decided if the present Scheme of Arrangement is the best offer in the present circumstances.


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## AlbacoreA

mf1 said:


> You know - its just sooooooooooooo easy to take a pop.
> 
> But solicitors are not parents. They can only advise - people need to make their own decisions. And when people are engaging in the biggest transaction of their lives, they should engage with what is happening. Not do the silly, tra la tra la tra la crap of just thinking about floor covering and not what would happen if, or should I be doing this or can I afford it?
> 
> And - if what you mean is that the solicitors should have known that the property market would collapse, that the developers could collapse and that the economy would go into free-fall! What were going to do - refuse to act for a client who wanted to buy and who knew that if they did'nt someone else would take their place?
> 
> So far, one person on this board appears to be blaming her solicitor. andy cole is very sensible and has made it quite clear that he knew what he was doing when he did it - he just did not anticipate the above. No-one did. But the whingers who are now running around trying to apportion blame on everyone else - but not them, oh no sirree- deserve nothing.
> 
> mf


 
I wasn't taking a pop at all. Not involved in anyway. Other than be cynical of "professional" advice in every sector. But you seem to be throwing the baby (and the toys) out with the bath water. Its a simple observation that what sense does it make to pay for professional services, that you have to duplicate by doing yourself. Double checking things that you are not qualified to check. Thats an obsrvation in general, not specific to this topic or property contact solely. 

If I take a car into a garage for a service, and they advise the brakes need attention before the car is safe , and I refuse to get the work done. They will get the client to sign a disclaimer that they were made aware of the problem and choose to ignore the advice of the garage. Thats the level of professional service I would expect.

Your suggesting that clients are being informed and are recklessly ignoring such advice, 





> tra la tra la tra la


 (nice) However that so many are not aware of these issue suggests the reality is very different. Though I have no doubt there are very many who don't listen. If it were me I'd think I'd be doing what the garage does if clients refuse advise. Signed disclamers. Doesn't matter if its contract law or going to the dentist. The principle is the same. 

That the homebond is weak Guarantee, or the building boom, or how builders do business, or clients greed, panic are clearly seperate issue's. I'm certainly not blaming solicitors for that.


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## andycole

Not really relevant to the decision that the Judge is being asked to make,  of whether the Scheme of Arrangement is the best offer in the present circumstances.


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## foxylady

andycole said:


> Just to update people -
> 
> We have not yet received any reply from the solicitors for the Examiner - confirming if they have presented this new issue to the attention of Mr. Justice Clarke this morning.
> 
> Initially the reply that we received was that the Homebond limitations have already been presented to the Court.
> 
> But we then made the point that this is a new issue, while related to Homebond, was actually about making Mr. Justice Clarke aware of the Homebond Warning that was issued by the Law Society in 2000 and requesting that a "Client Warning Notice" be included by builders solicitors in contracts.
> 
> So we am unaware if Mr. Justice Clarke is aware at this moment in time of the existence of the "Client Warning Notice" .
> 
> *Request for Help:* Can anyone who is going to the Hearing today bring this new issue to the attention of the Examiner, Mr. Paul McCann and his legal representatives?


 
Any idea how many more days this will be in court


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## DerKaiser

mf1 said:


> It was actually quite clear in the Homebond paperwork - it was just never an issue before. We have'nt had had such overruns and insolvency for years.
> 
> mf


 
...and isn't this the kind of thing a solicitor would be paid to point out?

The regulation in the property market (or lack thereof) is an absolute joke, I'm thinking mainly estate agents before you jump down my throat on solicitor bashing.

The least anyone who is part of the wider industry can do is acknowledge the various shortcomings.

Saying people deserve no regulatory protection because they 'rushed in like lemmings' does not fill me with confidence in the conscientiousness with which you deal with clients


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## foxylady

For anyone who is interested this is the latest http://www.rte.ie/news/2009/0714/laragan.html


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## Brendan Burgess

I have opened a new thread to discuss the liquidation of Laragan:

Laragan - Judge rejects Scheme of Arrangement


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