Builders Charging Interest

Hi mf1

Thanks for taking the time to give your opinion on this matter. Re: your quote: " Where it is patently never going to complete, keep the file open. If there is an upturn, maybe, maybe, allow the purchaser out." Did you get an idea how long this process i.e. do you have to sweat it out for months/ years to see if you are going to court or not? Thanks
 
Dublin 13,

You are in a difficult position as you entered a legally binding agreement which the builder can enforce in a number of ways. As mf1 said, many people are trying to pull out of contracts as they simply no longer wish to buy the property due to the "change" in the property market.

I have dealt with a number of builders solicitors and invariably the builder instructs them to try and close as aggressively as possible in the first instance and threaten to charge interest.

I have seen builders that will drop the price of properties to that of comparable second hand units in the area to close a sale quickly. That may be an option if you could afford to buy the property for a lesser value.

Builders are very reluctant to allow people to walk away, even if keeping the deposit, as they must then sell the unit again and that may not be easy to do. If a property costs €300,000. Even if a third was pure profit, the builder is still down €200,000 minus maybe €10,000 if they let people walk away. They have their own bank loans that must be repaid when properties are sold.

Trying to sub-sell the property was mentioned but again that could be difficult given the current market and if you sold it for less than the purchase price you would be liable for the difference.

From my own experiences, builders are taking the view that they have signed agreements which should be honoured and will threaten everything they can to see if someone can be scared into closing as they do not know which financial hardship cases are truthful.

As you are buying a one bed I suppose it's not an option to see if anyone will buy it with you now.
 
Thanks FKH

Your message is pretty clear and I understand you comments re builder's point of view. But my financial circumstances have changed so much that there is no way in heaven (bar winning the lotto) that I can afford this - Even if they were to drop price a bit. I can understand them wanting to separate the cases of 'just not interested any more' to the genuine financially troubled cases. Regardless of their tactics, It looks like I am in this process for the long haul, as there is just no way I can afford this apt. Or else I can pray for that when they see the letters I sent them from lending institutions, which shows that I cannot afford the apt by a long shot, they might release me. Who knows, its nervewrecking and a very stressful situation to be in.
 
It must be a horrible situation to be in. Unfortunately you are at the mercy of the builder. You could ask your solicitor if he made the contract subject to loan approval as you had not obtained if when you signed the contact. As a solicitor I would not let anyone sign a contract without loan approval unless they informed me in writing that they knew the consequences of doing same and would take the risk. It would be a very long shot but you could try and argue that your solicitor was negligent.

In many ways the easiest thing would be to do nothing once you've set out your position to the builder. Assume you'll lose the deposit and leave the ball in their court. If they don't have a current address for you it will make it difficult for them to pursue legal action against you.
 
Really? Surely they just contact the individual's solicitor who is then responsible for passing any messages onto their client?
 
Although I am in no way advocating this course of action, it would be possible to discharge the solicitor from your employment and tell them not to accept service of court proceedings on your behalf. If a summons was sent to the solicitor's office they would then simply return it to the builder's solicitor stating they were no longer acting for the client.
 
Dear FKH & Clubman

Thanks for your input. very helpful & much appreciated. Is there anybody who knows of precedents in this scenario. I am asking - because, I have read some messages where prison has been mentioned and others where huge costs can be brought against you, but no actual case histories. The thought of these actions being taken again you makes life very stressful at the moment. Thanks.
 
Based on what somebody else posted a while back prison is an issue when it comes to contempt of court in a civil debt case - nobody is jailed for being a debtor per se. You should be asking your solicitor these questions.
 
As stated before, you can go to prison if you do not make payments that you are ordered to pay under an installment order for contempt of court. In an installment order situation the court will have regard to what you can afford which could be €50 per month or €500 per month depending on the particular circumstances. So long as you keep these up you would be fine.
 
ClubMan said:
Really? Surely they just contact the individual's solicitor who is then responsible for passing any messages onto their client?
Click to expand...

A solicitor has to have their clients authority to accept service of proceedings.

I wasr ecently in correspondence with a firm solicitors in a dispute, in the end i issued proceedings, and served them on the solicitors assuming they;d accept service. However they sent them back to me saying they had no authority to accept service.

So i wrote back to them saying that i was surprised to find that their client might engage another firm to deal with the actual proceedings and I served their client, lo and behold the solicitors entered an Appearance. In those circumstances it was just twattery really as I was serving a limited company but if the party being sued was an individual I would have to serve them personally and it could take some time.
 
Dublin 13

I have read the posts above and would like to say this: as someone who deals with builders and developers on a regular basis through my work as a contractor on building sites, i think you need to make your case in a different way rather than solely depending upon the legal route. As far as i can see many solicitors practices are now out of work due to the slowdown in the building industry. Some of them have been solely dependent upon conveyancing for their living over the last few years and now have to look for other ways to make money. Going after people like yourself seems to an avenue for racking up fees to their own clients, this practice would have been unheard of up until the slowdown in the industry as they would have been too busy with other matters.

Anyway, back to your own predicament, as i said i have dealt with many builders and developers over the years. Many builders who develop housing schemes themselves are generally guys who have come up from very little themselves and have got rich during the building boom. These guys are normally very approachable and understanding of these type of situations, they are probably just being advised by their solicitors to go this route. Developers are a different kettle of fish and are harder to track down as they can be made up of a number of financiers from different backgrounds. If i were you i would try and find out who the owners of the company are, outline your predicament in a letter and leave it into the builders office marked private and confidential and ask them to contact you. Its important to get a name of someone - either a director or company owner, if you dont get a reply then make a point trying to get to talk to the owner or director. If they see that your case is genuine and not just someone trying to pull out of a contract because the prices have dropped then they more than likely will cancel the contract. You've got to remember though that a lot of building companies are now extremely strapped for cash - nothing is selling and bank interest is mounting up on land purchases and investment in sites and infrastructure that is half finished. That is why they are going down this route of chasing people to close contracts.

If the above doesn't work and you get no joy by going direct to the builder i would go straight to your local TD, local newspaper, radio station, national newspaper etc and highlight your case, i would also contact the CIF and tell them that you are going to publicise your case in the media. If a builder or a developer is shown to be heartless when it comes to genuine cases like yours then the adverse publicity will be far worse than trying to force you down this road where they likely will get no money anyway.

You have to take the bull by the horns and do something about this situation yourself rather than relying on your solicitor.

Hope this advice is some help and good luck.
 
"Going after people like yourself seems to an avenue for racking up fees to their own clients, this practice would have been unheard of up until the slowdown in the industry as they would have been too busy with other matters. "

I spend a lot of my time trying to explain to people where solicitors fit into the BIG picture. Look at that statement - its all but saying that clients ( in this case - builders/developers) do not make their own decisions - solicitors do. Be under no illusion - solicitors advise, clients decide. And looking at that statement above-
A. This situation did not arise in the good times - if a purchaser could not complete, there was always someone else who could and it was far easier/more practical to let the first guy out and take the second willing guy.
B. The clients of the solicitors weigh it up - do they let contracts go or do they instruct the
solicitors to pursue their ( the clients) rights under executed contracts.

It is not a question of solicitors racking up fees for their own clients. It is an unpalatable aspect of the current climate.

mf
 
I thought most contracts were signed subject to funding approval and that if it was a genuine case of the institution refusing to fund then it is a legitimate method of voiding the contract.
 
HighFlier said:
I thought most contracts were signed subject to funding approval and that if it was a genuine case of the institution refusing to fund then it is a legitimate method of voiding the contract.
Click to expand...


This has not been the case for many years. Until recently , and probably for at least 8-10 years prior, purchasers were told by their estate agent, builder and solicitor, that loan approval clauses were not acceptable in the heady days of the property boom. If they did not like it, tough - there was always another purchaser waiting. That has changed and I rather suspect that , in the unlikely event that anyone was buying anything at the moment, ( which they're not) that builders would allow purchasers insert anything in a contract to get it signed!

mf
 
Unfortunately, as part of the General Conditions of Sale and the Building Agreement, you are in a binding contract and are legally obliged to complete it. If you do not, you lose your deposit, are liable for interest running from the Notice and risk forfeiture (this may have happened already). If forfeited, the builder may place the property back on the market and if not sold or sold for less than what you contracted to buy for within 1 year of forfeiting, you may be sued for the shortfall. If judgement is obtained, then it can be registered, published and the sheriff sent in to seize goods. The builder is legally entitled to do all of this.

Your best bet is to get your solicitor to do a nice letter, basically a begging letter asking them to not sue you. You will most likely lose your deposit anyway.

Best of luck
 

Did you read any of the previous posts in this thread? - much if not all of what you said has been covered and discussed
 
Hi guys,

Thanks to all of you for taking time out for the discussion, it has helped me a lot.

I just came to know from my solicitor that we never got any floor plans or architectural plans from builders. I went to see the apartment, the builders have not built the boundary walls separating our balcony to neighbours balcony. Though i have the glossy brouchre which i got from estate agents which shows the drawings of separation of boundaries.

Now so far i have measured the apartment, but may be i should because it could be different from what it was promised.

Will all these things will hep my case......

any suggestion or advice is very welcome....

Thanks in advance to all of you....
 
Best of luck, let us know how things go.
 
Well I am currently in a situation where the builder has not honoured the contract as a window, which was on original drawings submitted by the builder with the contract (so it was not just on the brochure), was not in the final build. I would not snag the appartment until this was done or sufficient compensation was provided. I broght this to thier attention in june last year & the contract ended in november. I have still not heard from the builder who my solictor has called & faxed at least once a week since june. They still have my deposit & dont seem to care if i take them to court.
It all looks like theres one law for the builders & a separate one for us!!
 
"I went to see the apartment, the builders have not built the boundary walls separating our balcony to neighbours balcony. Though i have the glossy brouchre which i got from estate agents which shows the drawings of separation of boundaries."

Usually the Contract & Building Agreement specifically state that representations made by the estate agent etc prior to signing the contracts are not binding on the builder and most contracts allow for some leeway with the plans. Again, check with your solicitor as to what your contract says.
 
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