Budapest - Issues with Szinyei Merse

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ketelkedo

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Hello all,


We have bought an apartment in the Szinyei Merse development when it was released over 2 years ago. The development was originally due for completion in August 2006 then delayed to December. According to our contract if the apartment was not finished by the end of February we have the right to cancel the contract in which case Autoker would have to pay a total of ~ 13% penalty. They told us the apartment was finished on the 7th February, but on our visit on the 1st March the terrace was not finished, a door was missing, appliances were not plugged in, ect… Moreover the building is no where near completion. It is obvious they rushed the handover in order to save paying the penalties. On the top of that they are missing some kind of building permission from the Budapest office. We told our lawyer that we would like to cancel our contract, but we feel he is protecting Autoker’s interests more than ours.


We would like to hear from any other owners that may have come across similar problem. Any advice would also be greatly appreciated.


Any one else buying in the Szinyei Merse development?
 
If you are using an estate agent/developer's recommended lawyer, then chances are that he will be protecting their interests. If you need a reference for an excellent independent lawyer to assist with this, just PM me.

There may be some ambiguity though over what is considered 'finished', which depends on the exact wording of your contract.
 
Hi ketelkedo,

Who did you appoint to perform the technical checking and handover? Did you use Autoker's recommended agent, or an independent agent? The technical checking stage is really the "defining moment" at which Autoker is put on notice of snagging. From my experience with this particular developer (but not this particular development), they have a standard pro forma "technical checking" form for completion and you can ask for a copy of this if it has not already been provided to you.

At the contractual level, again based on my experience with this developer (but at a different site) the procedure is that Autoker will set a date for "handover". The handover will not take place until after the final instalment has been paid. If, at the point of handover, the snagging items on the technical checking form have not been rectified, then you have not been provided with an apartment in accordance with the contract. Your contract will probably contain a clause dealing with this scenario, giving Autoker a period of time (10 calendar days only in my case) to rectify the snagging.

If the snagging is not rectified within that time frame, then there is a breach of contract, and you would have a prima facie right to damages subject to proof of loss (eg loss of a tenant because the apartment was not ready for immediate occupation). In your position, I think I would be inclined to try to get more information about the "technical checking" stage. If, as I found, the "technical checking" has not been carried out with due care and attention, then you have a right of recourse against that agent, but on a practical level the next step should be to get another agent to carry out a second "technical checking" and to notify Autoker of the snagging so that it can be rectified.

Subject to what you discover in relation to the "technical checking" aspect, I think you probably have the upper hand here. In your position, if the snagging is the only consideration, I would not rush to exit. Feel free to PM me if you need any more information.
 
Hi ketelkedo,

We also purchased in this development. My other half is travelling over there today & will have snag list done tomorrow. Will report back to you about how this goes.

Rgds,

valc
 
ketelketo, you need to check your contract with autoker and mainly the conditions for the hand over which are usually the following:
- completion of the building work and hand over of the site from the contractor to the developer
- obtaining of the usage permit - if not the legally binding usage permit
if those conditions are not met they can not force the handover.
as Budapest is saying the lawyer that you dealt with when you sign the contract is actually representing autoker and was also paid by them, if you want some recommendations PM me, I met 2-3 good lawyers there.
I know from experience that autoker has many problems with the technical handover (for example in the marina project) you should be aware that the law is on your side and not let them convince you to sign and acceptance protocol if things are not 100%.
 
I did technical checking and handover in Szinyei the early March. Everything went well and the apartment was in outstanding condition. It was over my expectations.

But I would suggest you use a good communication chanel with Autoker. If you spend time with them and asked them to do what they should do, they will do.

I had a very long discussion with Autoker before handover. We asked them to inspect the apartment and send us a report before doing technical checking. Probably, it seems to be abnormal but communicate, communicate and communicate. Seating and waiting for gold fish will lead to problems.

If you need any assistance in Szinyei send me PM.
 
Hi budapest,

Thank you for your response. Yes the lawyer was suggested by our estate agent (they like to call themselves investor!).
 
Hi zsizsik,

The situation is rather complicated, at least this is how Autoker like to present it! According to our contract a technical inspection from the Bank who financed the project should be carried out in order to declare the apartment finished. Then Autoker is supposed to send a letter notifying us of the takeover, which they did. Autoker generously offered to take care of the technical inspection and handover for us. But we thought they would not really be impartial :). So after writing a few emails we found an independent engineer and I met him in Budapest. As mentioned in my first post, the apartment/building were far from being completed. We completed a snag list and a representative from Autoker stayed with us the all time and completed its own snag list.

We have not received a standard pro forma "technical checking" form for completion. Do you know if this form is normally issued before or after they inform you that the apartment is finished? According to our contract there is no fixed period of time for Autoker to complete the snag list. From our understanding we can only obtain breach of contract if the apartment is not ready for handover on the 1st March. There is one other issue that Autoker is very reluctant to answer our question and it's about this missing final subsistence permit (some kind of building permission from the Budapest office).
 
Hi lee-m,

We have read our contract over and over again. One of the problems is that the initial contractor is not working on this development anymore. Apparently Autoker are now taking care of the completion of the project. We asked them at what stage they can declare if the apartment is finished and they never offered a clear answer. In reality they did as much as possible before the deadline and then just told us it was finished. I could not find a specific clause about usage permit in our contract. It’s funny you are saying the law is on our side because up to now everybody seems to think it is impossible to prove that Autoker is wrong. We would be very keen to know more about the marina project issues.
 
Hi ketelkedo,

The pro-forma form I referred to was not provided to me initially. I visited the apartment last week to get a clearer picture of what was going on, and it was then that I discovered the true extent of the snagging. At that stage I asked Autoker to send me the snag list compiled at the time of the technical check (which took place in December 2006) and I received by e-mail four pages of a pre-printed document containing handwritten comments, signed by my engineer and countersigned by representatives from Autoker. This document appeared to be part of a larger document, possibly extending to 34 pages. I have since been advised by a new company that the four pages do not refer to the snagging that I observed on site, and I propose to arrange a second "technical inspection" to ensure that Autoker are on notice of the full extent of the problems.

Your understanding of the circumstances in which you could run the "breach of contract" points fits with my own. As to the building usage permit, that is interesting. I have come across this in 2 separate contexts. First, in relation to the requirements of the project financing bank. By the way, if you are asked to sign a waiver or release in favour of such a bank, make sure that it is expressly without prejudice to your rights against the developer!. Second, in relation to mortgage financing issues. Put shortly, it is usually a condition of mortgage finance that there should be a final occupancy permit. This extends not just to the Apartment, but also to the host building. If the apartment is complete, but the building is not, the permit will not be issued, hence the need to apply for a usage permit from the local district office.

My involvement is at Marina. The situation is fluid. I will let you know how things go over the next few weeks.
 
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hey, im marina I helped a guy to take possesion on the apartment, there was a long snag list made by an engineer and it took autoker 4 months to get it done...
I have good understanding of the law in hungary but I am not a lawyer and I havn't seen the contract, contracts made by the lawyer of the developer are usualy in favour of the developer but there is general regulation which keep you right not to receive an apartment which is in a non usable condition, oblige the developer to get the usage permit for the whole building, there is no such thing as usage permit for one apartment etc. you need to find a lawyer which is not related to the agency you worked with or the developer and get a fair opinion from him
 
Hi zsizsik,

Thank you for the information. Concerning the mortgage we have been told that the only bank prepared to give us a loan before obtaining the final occupancy permit is the bank financing the project. But we now suspect that even they are not prepared to lend us money until the issue with the building permission is solved.
 
Hi lee-m,

Would 4 months to complete a snag list still be considered a finished apartment? Looks like Autoker are late on many projects.

I think we slowly start to understand what may be the problem with the Szinyei Merse. The usage permit (or what our lawyer call the subsistence permit) is not available for the Szinyei Merse development because they are still waiting for some approval to modifications they made to the original building plans. Autoker are saying that they have an oral agreement with the municipality and they are just waiting for the written confirmation. At the moment we have no reason to believe them…
 
ketelkedo said:
Hi zsizsik,

Thank you for the information. Concerning the mortgage we have been told that the only bank prepared to give us a loan before obtaining the final occupancy permit is the bank financing the project. But we now suspect that even they are not prepared to lend us money until the issue with the building permission is solved.
Click to expand...

Do not despair! In the case of Marina, I am aware that there are a number of different banks that have been willing to finance apartments. In my case Erste Bank. I can tell you that this is Erste Bank's first experience of working with Autoker in relation to new-build and it may be the last! From my dealings with Erste Bank's lawyers (who are the trustees on delivery for the performance of the financing obligations and with whom I have been in close contact by telephone and e-mail) they are tearing their hair out in relation to the failure on the part of Autoker and/or their lawyers to produce the confirmations stipulated in the financing agreement to which Autoker is a party. I am confident that this will resolve itself. It is little comfort in the sense that the opportunity cost of my investment is not currently being maximised, but I can live with that because I entered the market for the long term, and I still believe it will come good.
 
valc,

Could we tell us your feedback about handover in Szinyei? I am just curious how you did get on.
 
Hi Hungary,


Other half did not make it to Budapest on Monday. Long story as to why - but that's irrelevant here! Trip recheduled for 22nd April.

Relative also bought an apartment in this development & had snag list done by an Autoker engineer. While she has not yet seen the apartment & is only relying on verbal communication with the engineer, his report said apart from a few small cosmetic issues, all was ok but according to him, the electrics could not be checked! Autoker since made contact with her to say there is a problem with the electrics in her apartment. Apparently not all sockets can be used at the same time. She is also travelling to Budapest on April 22nd to review.

rgds.,

valc
 
Thanks valc,

That is an interesting story with sockets. I have also an experience with the electrics in another Budapest development. The place for ceiling light was just a hole with a wire but it was not conacted to electricity supply. We had to do it, which was a 6 hours work. The fun is that the apartment was inspected by engineer but he did not check them. It was turned out when the apartment was taken over from the management company that was responsible for entire technical inspection.

Therefore, we ask developers to install light bulbls to all light places in order to avoid similar unexpected surprise.

I will fly from Dublin to Budapest at 22nd April (early morning with Malev). What a coincidence:)
 
Hi there. Autoker have just told me that my Apt will be ready by the end of this month. I'm using Parragi Law as my legal rep. I've bought a 2 bed on the 7th floor. Can anyone give me their views on the finished apartment spec, how extensive are the Snag lists, etc.
You comments are much appreciated.
cheers.
 
By finding this site you are obviously internet-savy. I would use that to your advantage. Firstly, if something like this did happen to you (handed over an incomplete apartment), then you are more than likely not alone. I would take measures to find the other investors....which are probably banging their heads on the wall just like you. I once had a similar problem with a development in France. I found a lot of other buyers in that same development....and together we hired ONE lawyer to act on behalf of all of us.

For me, developers think they can get away with these type of things (especially with us foreigners) because they know the likelyhood of ONE single individual taking them to court in an unfamiliar legal climate is next to none. However, what they fail to realise is our ability to be resourcefull. Be resourseful.

If you need a push in the right direction feel free to PM me.

Good luck
 
Hi Adam JL,

I presume your apartment is in the Szinyei Merse development. As mentioned at the beginning of this thread, I went to Budapest to inspect our apartment. The first thing I would suggest is to use an independent technical inspector (not referred by Autoker or by your agent). Also it is preferable if you can be present during the inspection. I brought my digital camera and a long check list (I can send you a copy if you are interested). Apart from the apartment not being finished I found a lot of defaults and things missing (like a door!). You should verify all the appliance and try to get them running at the same time. As valc mentioned there seems to be some problems with the electrics in several apartments. In my case the air conditioning, the fridge and the hob were not even connected. In general the quality is good, but they could have done better on some details. It gives the feeling that they've rushed to do the finishing touch (are not finished in our case!). And don’t let them convince you that such or such things are not important, don’t forget how much you are paying for this! And of course, be really careful as they will probably ask you to sign a document in Hungarian saying the apt is ready. I am sure you know that you should never sign something in a language you don’t understand.
 
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