# Property Purchase contract - is this void.



## foxylady (21 Jan 2008)

Here goes the question. Group a buys property from plans in say 2006 and completion to between 18  - 24 months. Group b the builder has prolonged the completion of said property by approx  5 to 6 more months on top of this bring it up to around 30 months (this new date is also only approx and could go on longer)

Builder is refusing to release group a from contract and expects thme to be tied to this forever and a day.

What comeback does the purchase have in said case ?


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## mf1 (21 Jan 2008)

You know what the answer is going to be! 

Whats in the contract, what advices have their own solicitors given them, is this anything to do with the down turn  in the property market and the feeling that what they have agreed to pay is more than the property may be worth on completion, have they agreed to the extension of time, are there mitigating factors, etc.,etc. 

mf


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## ClubMan (21 Jan 2008)

Surely group a should be asking their solicitor what's what since s/he has access to the contracts etc.?

_Post crossed with mf1's!_


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## foxylady (21 Jan 2008)

mf1 said:


> You know what the answer is going to be!
> 
> Whats in the contract, what advices have their own solicitors given them, is this anything to do with the down turn in the property market and the feeling that what they have agreed to pay is more than the property may be worth on completion, have they agreed to the extension of time, are there mitigating factors, etc.,etc.
> 
> mf


 
It is nothing to do with downturn in the property market as group a very much want their own home being ftb's it is more to with the fact that they are being messed around and expected to wait over two years for a place to be built while their money is also earning interest for developers.


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## ClubMan (21 Jan 2008)

So what has their solicitor advised?


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## foxylady (21 Jan 2008)

ClubMan said:


> So what has their solicitor advised?


 
Solicitor has mentioned arbitration but group does not know the costs or whether they can afford this option. Surely a contract has to protect both parties and not just the ones with all the money(builders)


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## Purple (21 Jan 2008)

What does the contract say?


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## foxylady (21 Jan 2008)

Purple said:


> What does the contract say?


 

Purchaser was never given contract to read as they were assured it was all straight forward.


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## mf1 (21 Jan 2008)

Lets try this again. 

Why don't they get a copy of the contract now, read it  and ask the solicitor to explain to them in really simple terms (a)  what it says and (b) what was to happen if the building timeframe was exceeded? Let them ask their solicitor, if legally, they can walk away from the contract and, if no, why not? 

mf


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## foxylady (22 Jan 2008)

Camry said:


> So if you were never given a contract, how did it get signed?


 
I mean it was not read by party A as their solicitor told them it was all above board.


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## efm (22 Jan 2008)

foxylady said:


> Solicitor has mentioned arbitration but group does not know the costs or whether they can afford this option. Surely a contract has to protect both parties and not just the ones with all the money(builders)


 
I believe it is widely recognised that the standard building contract used in Ireland certainly favours the builder and not the purchaser.


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## ClubMan (22 Jan 2008)

And if people don't like the standard contract after reading it and getting advice from their solicitor then they are free to decline and/or negotiate.


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## Stifster (22 Jan 2008)

efm said:


> I believe it is widely recognised that the standard building contract used in Ireland certainly favours the builder and not the purchaser.


 
our house was about 18 months over its due completion date. As soon as they were finished the builders put the pressure on, even serving a completion notice when we weren't happy after the snag.

I'd agree with efm, the building contracts give minimal get out clauses to the buyer.


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## foxylady (22 Jan 2008)

Camry said:


> I would have expected a solicitor to have informed you of your right and obligations and potential risks under the contract.
> 
> Was this a solicitor provided by the developer by any chance? If so, you need to go find another one (of your own). If not, go back and ask them some challenging questions, like:
> 
> Do you think it your repsonsibility to inform your client of any important obligations, or waivers of rights contained within a contract?


 
This was brought to the attention of the solicitor who said that  the contract was straightforward property ourhcase contract that is standard in this country and that matters would only be resolved by arbitration.


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## efm (22 Jan 2008)

Camry said:


> I would have expected a solicitor to have informed you of your right and obligations and potential risks under the contract.


 
For what it is worth my experience with solicitors and conveyancing has been poor to say the least - I have bought three new build houses and one new build apartment over the last ten years and have used four different solicitors firms - two were big name Dublin firms, who charged big name fees and two were local, and recommended, firms who charged less. In hindsight, for none of the purchases did I feel that the solicitor properly explained all of my possible obligations and risks. 

Also, three of the four solicitors were unwilling to even consider any changes I requested to the wording of the standard building contract - the standard response was "lookit, it's the same for everyone - nobody else ever complained".


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## Stifster (22 Jan 2008)

efm said:


> For what it is worth my experience with solicitors and conveyancing has been poor to say the least - I have bought three new build houses and one new build apartment over the last ten years and have used four different solicitors firms - two were big name Dublin firms, who charged big name fees and two were local, and recommended, firms who charged less. In hindsight, for none of the purchases did I feel that the solicitor properly explained all of my possible obligations and risks.
> 
> Also, three of the four solicitors were unwilling to even consider any changes I requested to the wording of the standard building contract - the standard response was "lookit, it's the same for everyone - nobody else ever complained".


 
I accept your point to a certain extent but ultimately were there any difficulties?

It is virtually impossible to get changes to the standard terms accepted though special conditions are often put into the contract for sale.


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## efm (22 Jan 2008)

Stifster said:


> I accept your point to a certain extent but ultimately were there any difficulties?


 
Luckily there weren't any difficulties but that was not because the standard building contract is a robust, fairly balanced and even handed document, but because I was lucky enough to get average quality builders whom I badgered and cajoled to the best of my ability and who delivered buildings only 6 months after the original delivery date and to a barely acceptable standard.

However, I feel that had I not been so lucky I could have been badly exposed to interminable delays, sub standard construction and uncapped price increases.

Just for a bit of balance - I work with solicitors and in-house lawyers on a regular basis in my industry and I have a huge regard for many of them - however, I don't hold some of their colleagues in the conveyancing game in the same regard!


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## Vanilla (22 Jan 2008)

I disagree that the building contract is all one sided. However the standard building contract is silent as to what will happen if the builder runs over time ( and this time is usually in itself quite delayed). 

The problem over the last 10 years is that the negotiating power has been firmly on the builders side so even if a solicitor wanted to make changes for their client the builder would simply refuse. It is then up to the client to either agree the standard terms or walk away. But people havent been willing to walk away. Understandably they have found their dream home, dream plans, dream investment and they cannot contemplate walking away. Whether that is about to change remains to be seen.

There has also been an ancillary problem in that people want cheaper and cheaper legal fees which means that solicitors must process more and more files to make a profit so that a certain percentage of solicitors, IMO, may not be taking the time to explain every detail to their clients. Although I feel that any conveyancing solicitor worth their salt should firmly point out the potential problem should a builder be late in closing even where they cannot do anything about it.

And then of course there is also a certain percentage of clients who simply do not listen when advices are given and afterwards claim ignorance.


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## ClubMan (22 Jan 2008)

Stifster said:


> It is virtually impossible to get changes to the standard terms accepted


Is this true? Is it because clients or solicitors don't push hard enough? Is it because it has been a seller's market for a long time? Was it always this way?


> though special conditions are often put into the contract for sale.


Like what? You mean some sort of additions to the main body of the contract?


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## Vanilla (23 Jan 2008)

ClubMan said:


> Is this true? Is it because clients or solicitors don't push hard enough? Is it because it has been a seller's market for a long time? Was it always this way?


 
Did you miss my post or just ignore it?


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## Purple (23 Jan 2008)

Vanilla said:


> Did you miss my post or just ignore it?



A Vanilla / ClubMan spat; I haven't seen one of those before! 


Continue...


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## ClubMan (23 Jan 2008)

Vanilla said:


> Did you miss my post or just ignore it?


I simply missed it.


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## Purple (23 Jan 2008)

ClubMan said:


> I simply missed it.



Bit of a damp squib...


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## efm (23 Jan 2008)

Purple said:


> A Vanilla / ClubMan spat; I haven't seen one of those before!
> 
> 
> Continue...


 


ClubMan said:


> I simply missed it.


 


Purple said:


> Bit of a damp squib...


 
I feel I was ripped off, I was expecting at least two pages of line by line dissection of post and counter post - who should I complain to?


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## Vanilla (23 Jan 2008)

efm said:


> I feel I was ripped off, I was expecting at least two pages of line by line dissection of post and counter post - who should I complain to?


 

In my case, the Law Society, in ClubMans, NASA.


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## ClubMan (23 Jan 2008)

Vanilla said:


> In my case, the Law Society, in ClubMans, NASA.


In my case talk to the hand ...


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## Vanilla (23 Jan 2008)

ClubMan said:


> In my case talk to the hand ...


 
Jeeze, you're really not with it today- that's what *I* said.


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## Stifster (23 Jan 2008)

efm said:


> Luckily there weren't any difficulties but that was not because the standard building contract is a robust, fairly balanced and even handed document, but because I was lucky enough to get average quality builders whom I badgered and cajoled to the best of my ability and who delivered buildings only 6 months after the original delivery date and to a barely acceptable standard.
> 
> However, I feel that had I not been so lucky I could have been badly exposed to interminable delays, sub standard construction and uncapped price increases.


 
There is undoubtedly an issue with regard to the delay and the fact that the purchaser has so little comeback, ultimately of course the builder will only have received 10% OF THE PRICE UNTIL THEY COMEPLETE SO IT IS IN THEIR INTEREST TO DO SO. (wasn't meant to be caps but not retyping that!).

The contract couldn't protect you from sub-standard construction taking place however it was worded, if it happens it happens and you do have comeback, ultimately the contract is voidable if the defects cannot be remedied.

I haven't come across a building agreement that allows uncapped price increases yet, the buidling agreement and contract for sale specify the price. How were you so exposed?


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## juke (23 Jan 2008)

Stifster said:


> I haven't come across a building agreement that allows uncapped price increases yet, the buidling agreement and contract for sale specify the price. How were you so exposed?


 
Whilst I've never seen it happen in practise, if paragraph 6a is not deleted from the standard Building Agreement the the building costs could rise.


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## efm (23 Jan 2008)

juke said:


> Whilst I've never seen it happen in practise, if paragraph 6a is not deleted from the standard Building Agreement the the building costs could rise.


 
I think from memory that was one of the paragraphs that I wanted changed.

With regard to sub standard construction - I take the point that a signed contract doesn't eliminate below par construction but I feel that the arbitration process outlined within the standard building contract is too cumbersome and weighted in the builders favour (however, I may conceed that point apon strenous cross examination  )


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## Stifster (23 Jan 2008)

maybe by the time the next boom happens the contract might be slightly less weighted in favour of the builder...


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## efm (23 Jan 2008)

Stifster said:


> maybe by the time the next boom happens the contract might be slightly less weighted in favour of the builder...


 
Well...that should give us about 15 years to get it right


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## foxylady (24 Jan 2008)

Vanilla said:


> I disagree that the building contract is all one sided. However the standard building contract is silent as to what will happen if the builder runs over time ( and this time is usually in itself quite delayed).
> 
> The problem over the last 10 years is that the negotiating power has been firmly on the builders side so even if a solicitor wanted to make changes for their client the builder would simply refuse. It is then up to the client to either agree the standard terms or walk away. But people havent been willing to walk away. Understandably they have found their dream home, dream plans, dream investment and they cannot contemplate walking away. Whether that is about to change remains to be seen.
> 
> ...


 
I'm too sure about people not being willing to walk away, its more to do with the fact  they cant as devleopers will go after them for money if they have to resell at a lower price.


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## Vanilla (24 Jan 2008)

foxylady said:


> I'm too sure about people not being willing to walk away, its more to do with the fact they cant as devleopers will go after them for money if they have to resell at a lower price.


 
I was talking in the context of walking away BEFORE signing contracts.


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## foxylady (25 Jan 2008)

Vanilla said:


> I was talking in the context of walking away BEFORE signing contracts.


 
If they did that they would not be on here asking for advice now would they?


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## FKH (25 Jan 2008)

You should contact your solicitor and get them to check if their is a time limit for completion in the Building Agreement. It should be near the front (I believe if is clause 2 -Completion Period). The standard is that the property will be built withing 18 months. I have seen this extended to 24 months and in some a time limit removed altogether. This should be your first step.


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## foxylady (25 Jan 2008)

FKH said:


> You should contact your solicitor and get them to check if their is a time limit for completion in the Building Agreement. It should be near the front (I believe if is clause 2 -Completion Period). The standard is that the property will be built withing 18 months. I have seen this extended to 24 months and in some a time limit removed altogether. This should be your first step.


 
That is in the contract 18 months which was extended to 24 but ne completion date is approx 5 to six months over the 24 months


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## efm (25 Jan 2008)

Vanilla said:


> However the standard building contract is silent as to what will happen if the builder runs over time ( and this time is usually in itself quite delayed).


 
So...to get back to the OP's original question - what options are open to the purchaser if the builder does not complete on time?


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## ClubMan (25 Jan 2008)

And to get back to the original answers - depends on what's in their contract and what their solicitor advises presumably?


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## mercman (25 Jan 2008)

The market has changed and Builders will jump through hoops backwards to get a contract signed. I had a similar case in the UK (already posted) on AAM, where completion went on and on - to the extent 2.5 years later and the development still not completed. However in this case the purchaser still wants the property. My case I couldn't give a damn, and I got out of it by getting a Barrister involved. The contracts in the UK and Ireland are similar. You have to want to fight the builder legaly and if you can show that there is a deliberate case of delay you have something.


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## FKH (25 Jan 2008)

_"That is in the contract 18 months which was extended to 24 but ne completion date is approx 5 to six months over the 24 months"_

It would seem that if you haven't agreed to any extension over the 24 months you are now free to walk away.


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## ClubMan (25 Jan 2008)

When walking away under such a clause do you lose nothing (e.g. including any deposit)?


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## efm (25 Jan 2008)

ClubMan said:


> And to get back to the original answers - depends on what's in their contract and what their solicitor advises presumably?


 
As stated already the contract says 18 months, which was subsequently extended to 24 months - it is now 30 months since contracts were exchanged.  OP's solicitor suggested arbitration.  Vanilla says that the standard building contract is silent if the builder runs over time.

So given all the information we have learned in this post - what are the OP's options - is arbitration as suggested by their solicitor the only one?


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## FKH (25 Jan 2008)

I'm looking at a Building Agreement as I type. At the start there is the Covenant to Build (Clause 1), then the Completion Period (Clause 2) and then the Method of Payment (Clause3), under which the parties sign. The standard language in Clause 2 is as follows:

_"The Contractor shall complete the Works and make same fit for habitation and use (vacating the Site and clearing away all scaffolding, unused materials and rubbish therefrom) within eighteen calendar months from the date hereof."_

In General Condition 1 later on it states that the Contractor will complete the works within the time specified in Clause 2 _"provided that the completion period shall be extended for a reasonable time if the Contractor is delayed in performing this Agreement by any cause which is not reasonably within his control..."_

If you are in a position to invoke Clause 2 then the contract is at an end and your deposit is fully refundable. Obviously the Builder may seek to claim that they were delayed by something outside their control. Getting the deposit refunded could potentially still turn messy in such an instance but the issue would turn into one of whether the delay was reasonable which may be difficult to prove rather than the Purchaser simply facing a Breach of Contract claim.


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## foxylady (25 Jan 2008)

FKH said:


> I'm looking at a Building Agreement as I type. At the start there is the Covenant to Build (Clause 1), then the Completion Period (Clause 2) and then the Method of Payment (Clause3), under which the parties sign. The standard language in Clause 2 is as follows:
> 
> _"The Contractor shall complete the Works and make same fit for habitation and use (vacating the Site and clearing away all scaffolding, unused materials and rubbish therefrom) within eighteen calendar months from the date hereof."_
> 
> ...


 

What exactly do you mean by invoking clause 2 is that the same as arbitration ?


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## FKH (26 Jan 2008)

I mean that you have your solicitor write to the builder's solicitor and explain that as the time for completion of the property under Clause 2 of the Building Agreement has expired (plus the agreed extension of 6 months) you are now treating the Contract as at an end and the deposit should be returned.


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## foxylady (26 Jan 2008)

FKH said:


> I mean that you have your solicitor write to the builder's solicitor and explain that as the time for completion of the property under Clause 2 of the Building Agreement has expired (plus the agreed extension of 6 months) you are now treating the Contract as at an end and the deposit should be returned.


 

Solicitor did that only to be told that delays were due to things beyond their control and would therefore not be returning the money.


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## mercman (26 Jan 2008)

Of course they said that. What would you expect them to say ?? A lame duck excuse. They are building houses not space rockets and their problems are not yours. Example - if they didn't pay their suppliers and could not get the goods is it your problem. You should ask for details in the first instance


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## FKH (28 Jan 2008)

Your solicitor should get details of the claimed delays. Delays reasonably within the control of the contractor cannot be considered. They may claim that bad weather affected construction or some such. If you badly want out of the contract you will to have your solicitor challenge them on this and explain all delays in detail.


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## smurf (28 Jan 2008)

I am in a similar situation. Deposit paid. Over 2 years ago. The builders are overdue. 

If a person said that "the bank won't give mortgage".  Then a person could not go through with contract. What can the developer do.       

I appreciate people advice to ask solicitor whats in contract i have asked and the advice is ' the developers can come after you" has this happen people. 

I would like to know what  people experiences with  developers  actions  

I have paid 11k deposit - total cost 250k ... with  15equity & SD & Fit out  I dont want to chase  11k with approx 56k and would be happy to step back from contract ....   

My options 

1. Walk away and get deposit back  ----   best option 
2. walk away lose deposit  ===========  2nd best option 
3. Forced to continue and buy property ---- worst options  
4. get into legal battle with developer be pursued have to pay 250k and loose 
house  -- nuclear option 

opinions welcomed


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## Brendan Burgess (28 Jan 2008)

Smurf

While I am sorry for you, is there any point to your post? Has it not been covered extensively already in the thread?

Brendan


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## smurf (28 Jan 2008)

I don't think so. I appreciate that guidance has been given re contacting solicitor. 

However I am interested as to whether other posters who may have have had experiences of this and the actions of developers, the guidance of solicitors in these situations.  Also others may have had experiences where banks may not have given mortgage yet deposit was paid.  

I think there is a lot more mileage. 

also 
Got PM 
Trying to add comment but forum won't allow me. You need to contact the Administrator to sort this out and then you might get comments.


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## Brendan Burgess (28 Jan 2008)

If anyone has any more to add, they can add it to this thread. But it seems to me that the question has been answered. You are asking the same question, so you will get the same answer. 

If other people have been in this situation, they can share their experiences with us on this thread.

Brendan


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## FKH (29 Jan 2008)

I do know of a situation where a person was to purchase a property in Dublin. It took over one year to be finished and the mortgage offer they received when signing the contract had expired. Their bank valued the property at a lesser value than that in the contact. There were second-hand units on sale in the development for the lower amount. The vendor agreed to an independent valuation and ultimately agreed to negotiate on the price.

In this particular instance it would have been impossible to sell the property at the higher price as second-hand units were available cheaper and I would presume that the vendor took the view that it was better to sell and make some profit rather than be stuck with the property which they may not sell.

The vendor had other options legally but they chose to go this route so not all builders will aggressively push for the contract price and threaten legal action if the purchaser can't complete. I hope that helps answer your question. Ultimately my advice would be to talk to your solicitor and have them run through your options.


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## Dublingirlie (6 Mar 2008)

Does anybody know of any instances where the builder has successfully sued the purchaser in this instance. Obviously you would lose your deposit but if you have no additional savings then what can the builder sue you for. 

Also does anybody know of specific cases where a person has managed to get out of a contract or negotiated a lower price with the builder inline with market price so that the buyer can actually get a mortgage to close the contract.

Thanks


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