And did you not say to yourself I'll walk away from this as it's too risky? Did you understand the risks? When you say any house, you mean only houses being built by developers? You could presumable have bought a second hand house with none of the risks associated with buying off plan.
Can Developer force me to close contract?
- Thread starter Rolaga
- Start date
And did you not say to yourself I'll walk away from this as it's too risky? Did you understand the risks? When you say any house, you mean only houses being built by developers? You could presumable have bought a second hand house with none of the risks associated with buying off plan.
Complainer
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What makes you think it was off-plan? What makes you think second-hand house purchases use a different contract form than new houses?
I
inamuddle
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It is hard to understand why there are so many people out there with this problem if you were not caught up in it, so to respond to some of the questions raised....I bought off the plans because it was the cheapest way (and only way for me at the time) to get on to the property ladder. You needed generally a 5,000 deposit and then had time to save the remaining deposit required during the time that the property was being built, which was usually outlined as 18 months. To buy a completed house, you needed a larger deposit, so by just saving for 18 months, the property that you liked origionally was probably 10,000 more (at best) when you had saved your funding. At least by buying off the plans, the amount due wasn't changing so you could budget for exactly what was due. At that time you were constantly chasing the market with no bursting of the bubble in sight so it was more manageable to finance off plans then buying a new build or second hand house therefore. (In hiensight, I don't know what this frantic need for owning a home is in the Irish genes, perhaps renting is more investment savvy)
In relation to the contract in favour of the builder, yes, readily admit that without a legal background, I didn't fully appreciate the wording of the contract at the time of signing so put faith in my solicitor. Is that not why you use a solicitor as a middle man if only to identify loose wording? Again, to put into perspective, people were queing over night to get houses, so you felt elated to actually get your pin in the wall to secure a house. You then had 15 days to sign the contract or the house would go to the next hopefully buyer behind you, so yes, docuaments were probably not read properly. Not as easy to say therefore that as it is the biggest investment of your life that you would read everything, there were other pressures at play but again.....in my personal opinion....solicitors have some questions to answer on this. In my profession and most others, we would not get away with this type of sloppy work, so I would have expected the same from the legal professions.
Finally, the mortgages. Your approval only lasts a year, so if there is a delay in the property being completed, your mortgage approval runs out and you have to reapply. Conditions have changed since many applied the first time, so people getting 100% approvals at the time (thankfully not me), can no longer get that, so can no longer afford the property.
Not looking for sympathy, just trying to help you to understand why people are in trouble with this now and I completely understand the OP. (By the way Rolaga, there are court cases going on all the time on this, worth following to see if your personal situation is mirrored and what the outcome was if so).
In relation to the contract in favour of the builder, yes, readily admit that without a legal background, I didn't fully appreciate the wording of the contract at the time of signing so put faith in my solicitor. Is that not why you use a solicitor as a middle man if only to identify loose wording? Again, to put into perspective, people were queing over night to get houses, so you felt elated to actually get your pin in the wall to secure a house. You then had 15 days to sign the contract or the house would go to the next hopefully buyer behind you, so yes, docuaments were probably not read properly. Not as easy to say therefore that as it is the biggest investment of your life that you would read everything, there were other pressures at play but again.....in my personal opinion....solicitors have some questions to answer on this. In my profession and most others, we would not get away with this type of sloppy work, so I would have expected the same from the legal professions.
Finally, the mortgages. Your approval only lasts a year, so if there is a delay in the property being completed, your mortgage approval runs out and you have to reapply. Conditions have changed since many applied the first time, so people getting 100% approvals at the time (thankfully not me), can no longer get that, so can no longer afford the property.
Not looking for sympathy, just trying to help you to understand why people are in trouble with this now and I completely understand the OP. (By the way Rolaga, there are court cases going on all the time on this, worth following to see if your personal situation is mirrored and what the outcome was if so).
Bad as it seems, are you sure the home is at risk?
assuming you are married.....
Developer cant force you to sell it to pay the investment property purchase price without spouse's consent? Did you BOTH sign the 2nd property contract? IF the family home is paid for/nearly paid for, your situation is stronger?
Not a solicitor myself, check it out tho
Wrong. The Family Home is an asset of which OP owns half. If push came to shove and a judgment was obtained, Bank can force the sale of the family home but only the portion of the sale proceeds belonging to the defaulter can be claimed by the Bank. The other spouse is entitled to their share.
mf
" How could I loose!" It was this stupid greed that the country in the shapes it's in. You couldnt be happy with just once house and not price ftb's out of the market.
I
inamuddle
Guest
===================================
Preamble
Yes, bearing in mind you cannot and should not act unlawfully to frustrate the sale, you can certainly make sure you're getting what you are being asked to pay for - a compliant, competently built building.
Although the below advice seems exhaustive it is not. You should retain a competent inspecting architect and design team to undertake this level of inspection and make sure they are supported by a good combative, but not abusive, solicitor.
General
Firstly, don't do or say anything that may affect your negotiating position and your solicitor can advise you on this. The below is a fairly hard-nosed approach to putting the developer/builder/design team through the hoops just before a closing.
While you may be forced to complete eventually there may be quite legal ways to delay handing over the money for an extended period or to make it easier for the developer to let you go on your merry way.
Here is some food for thought.
Check the small print on your contract closely
Contracts are sometimes self-defeating. Your eagle-eyed brief may find that all has not been carried out strictly per the terms of the contract and it may be possible to declare it null and void on a technical matter. Unlikely, but it should still be checked. See what is supposed to be acceptable in terms of completion dates and what you are permitted to do in the event of a dispute.
If your inspecting team [see below] discover defects and these defects are significant and your solicitor can come up with supporting argument/ precedent, it may be possible to rescind the contract. I am mindful of comments by others suggesting that the contract may favour the developer. This may itself may be a weakness if the courts take a view on this following a flood of similar cases coming before them.
Inspect the Building minutely
Have you had the property and the development in which it is situated competently surveyed? Very few buildings are perfect and a competent inspecting architect, engineer and mechanical and electrical engineer can usually find one or two items it can cost money to put right.
Building Regulations Compliance items are the ones to look for, but even small defects can cripple profitability if there are enough of them and they are repeated throughout the scheme. Using a borescope to check that insulation is where its supposed to be in cavity wall construction, for example, can show up missing wall ties, displaced DPMs et cetera.
In particular, Fire Safety issues are the ones to look at.
Have all the Fire Doors been properly installed:
- 3 mm gap max
- self-closers working
- tumbler operated locks
- intumescent seals and smoke seals in place where required
- ironmongery bedded in intumescent paste - if required by the cert for the Fire Door and Doorsets.
Are all the Fire Exit Routes complete, with
- good footing
- clear of obstructions
- in compliance with Parts B, K and M
- minimum 2M clear except for door frames
- doors opening in the direction of travel [except in the middle of corridors]
- no locks on final exit doors
- are the stairs made from non-combustible material
- leading to a final exit across safe footing free from builders debris, rubble and impediments to the Public Domain?
What about the Safety Health and Welfare and Work Regulations. The latter may apply in apartments in relation to where maintenance personnel may have to work.
Are all the building services complete and commissioned apart from the Fire Safety ones? Water, electricity, gas, air-con/heat exchanger, security?
Are there any obvious building defects:
- are there any plumbing leaks with follow-on consequential damage to fit out, surfaces and/or insulation?
- are parts of the building missing - cladding, roofing tiles, paving stones, handrails?
- are there problems with condensation, or damp stains suggesting cold bridges?
- are there adequate ventilation ducts with the correct overrun times for extract fans for bathrooms, shower rooms and/or kitchen
- are all kitchen and bathroom fittings working and installed per specification?
- is the tiling done?
Examine the Certification Closely
Check the detail of the Opinions being offered by the architect and the Schedule A assurances/certificates supporting them from
- the structural and civil engineer,
- the mechanical and electrical engineer,
- the fire safety consultant
- the sub-contractors and
- the specialist suppliers.
The Architects Opinion on Building Regulations should state that it relies on the the Schedule A Assurances, and that means the date on the Opinion should not be earlier than any of the dates on the supporting documentation.
All certs can be dated the same date, but the architects Opinion should otherwise show that the architect saw all the supporting documents before he signed [and dated] his Opinion. Similarly, the Inspection date cannot precede the Issue date.
In the Opinion on Planning, the date of inspection of the planning documents must be a date on which the planning authority offices is open to allow such an inspection, unless online inspection is claimed. Where this is claimed the quality and completeness of the online documentation should be checked. Similarly, the Inspection date cannot precede the Issue date.
Check to see if there are any enforcement warning letters or proceedings are already under way against the builder or the developer on either this or any other job they have undertaken, either separately or together. learn from this.
Check to see if any notices to quit or desist have been served by either the Fire Prevention Section or the Health and Safety Authority.
Check to see if any vandalism or damage by others that may have occurred during the buildign programme has been made good, particularly fire damage or arson attack and see who oversaw the work and who certified the repair.
Demand a complete set of documents to cover everything, because as a Member of the Management company, its your sinking fund that will pay for future defects after the builder goes. Investigate every new material, odd method of construction, or unique foundation type. Commissioning Certs and Manuals for everything should be available for inspection on the date.
Ask to see the test logs for the concrete cubes. Make sure any fire engineering solution has been fully tested i.e. its no point testing each item in isolation - the heat detector in the kitchen must activate the fire alarm siren, the zone board at the entrance as well as the atrium vent [for example] - if the cert doesn't state what actual testing was done, ask for verification in writing.
Ask for the Building Energy Rating Cert for your apartment.
=====================================
Conclusion and Caveat
I cannot stress the following principle enough - accept nothing, question everything, including this advice.
As noted above, this is not an exhaustive advice note. Some or all of these inquiries may turn up useful information, some responses may only hint at troubles covered up. The developer, his professionals and/or the contractor may become aggressive or even abusive during your questioning - that's generally a good thing and don't let either it or vague threats from his legal team faze you.
Best of luck with it and revert here occasionally to let us know how you're getting on.
Correction.
In the above piece, I stated:
"the Inspection date cannot precede the Issue date"
Unforced error on my part and apologies for any confusion arising.
Its the other way around:
"The Inspection date cannot be after the Issue date"
Inspection can be on the same day as the Date of Issue.
Inspection cannot be on a day following the Date of Issue, because by the Date of Issue, all inspections must have occurred.
This refers to both the inspection of the documents and the inspection of the built work.
Apologies once again for that gaff.
HostBidder
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I think this is probably the best advice you got in this thread. Try to talk to the builder directly (not through an estate agent or solicitor). Tell him you can't afford to complete and ask him for suggestions. Don't commit to anything or make any agreement until you consider his offer (if he does make one) and speak to your solicitor about it. Chances are the builder is also experiencing financial difficulties and will be anxious to work something out with you.
Are you confident that your solicitor has looked at your contract in detail, with a view to finding a way to get you out of it?
Obviously, if the builder doesn't complete the property by the agreed date you will try to get out of the contract that way. If the builder says that the property is complete, check to see that he has the required documentation and certification in place to legally back up his claim. You might also consider engaging your own Engineer to give a letter or report as to whether or not the property is in fact complete.
On the issue of blaming builders for the contracts and saying that everything was in their favor - I don't agree. I was in a very similar situation to the OP and had to pay the full price for the property. I knew the risks when it came to signing the contract and asked (through my solicitor) for some amendments that would reduce the risk. The builder refused to make these amendments (because there was huge demand at the time, and could easily sell the property to someone else). I decided to take the risk and lost out. What's unfair about that, the builder didn't force me to do anything?
The builder in my case has since run into his own financial problems and is no longer building. As we all know, lots of builders have lost millions - it's not as if they didn't take any risks or suffer any losses.
This may sound like not-picking, but no, we don't know that.
Builders are paid contract sums to construct buildings.
They risk losing money when Employers fail to pay them what they are due.
Developers are entrepreneurs who offer [for this example] speculative developments to market.
They risk losing money on their investment when the market falls.
The newer breed of Builder-Developer is exposed to both sets of losses.
FWIW
From your website:
"I have high blood pressure, and I struggled for a couple of years to manage this through diet and exercise. But I just couldn’t seem to get it low enough to avoid damage to the heart, so I bit the bullet a couple of years back and went on medication. I’m on 40 mg of Micardis daily plus 75 mg coated aspirin. This used to cost me about €42 per month, but I’ve managed to reduce this significantly over recent weeks."
--------------------------------------------------------
Here's a clew.
I weigh around 17 stone.
I don't diet and I don't do much exercise.
I have had a steady 120/80 since I was eighteen.
Perhaps a change in attitude might help with your blood pressure.
We're not here to judge people but to help them - so let's lighten up a little, ehhh?
Complainer
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Thanks for the lifestyle tip (and for boosting the traffic to my website). However, given that BP problems have been in my family for 3 generations, I'm pretty sure it is not an attitudinal issue.Here's a clew.
I weigh around 17 stone.
I don't diet and I don't do much exercise.
I have had a steady 120/80 since I was eighteen.
Perhaps a change in attitude might help with your blood pressure.
We're not here to judge people but to help them - so let's lighten up a little, ehhh?
Perhaps a bit more 'judgemental' advice in the past might have encouraged people to take investment decisions a bit more seriously, and to consider the downside as well as the upside?
omq - thank you for that really good advice, I have printed it out and forwarded it to my solicitor. I will definitely use it when the time comes. I really appreciate your advice and the time you took to post it.
I still haven't been contacted by the developer or his solicitor even though the 36 months since contract signing has now expired.
I am reliably informed that if the developer sells at half the contract price he will still be making a hefty profit on the project. (Yes, I know I signed a contract at the original price).
Here's a bit of 'judgemental' advice to 'encourage you to take your health a bit more seriously and to consider the downside of your lifestyle as well as the upside':
Loose a bit of weight and do a bit of exercise and don't wait until you are taking up a valuable hospital bed and wasting my tax money on treating you due to your own lifestyle excesses. If BP problems are in your family for 3 generations do you think that gives you a licence to bury your head in the sand instead of addressing the problem?
I still haven't been contacted by the developer or his solicitor even though the 36 months since contract signing has now expired.
I am reliably informed that if the developer sells at half the contract price he will still be making a hefty profit on the project. (Yes, I know I signed a contract at the original price).
Here's a bit of 'judgemental' advice to 'encourage you to take your health a bit more seriously and to consider the downside of your lifestyle as well as the upside':
Loose a bit of weight and do a bit of exercise and don't wait until you are taking up a valuable hospital bed and wasting my tax money on treating you due to your own lifestyle excesses. If BP problems are in your family for 3 generations do you think that gives you a licence to bury your head in the sand instead of addressing the problem?
Ah well, sorry to hear about the blood pressure history and I hope you took what this fat person said in jest as intended.
No problem boosting website traffic for you at all
Mebbee when we get the revised site - really a totally new site - up and runing you'll be returning the favour.
[memo to self: keep personal details cryptic...]
You're absolutely right about taking sufficient time to consider investment decisions and all I can say is I stand by that comment 100%.
I've seen several friends do well from the property situation over the past few years, nice cars, boats, multiple annual holidays, a holiday home, et cetera.
Their trappings of success might nudge €5M apiece.
One guy I know was caught with a development headache, leavng him in a very precarious position financially, with his owings a multiple of what he made.
He did good work generally, and sold well, rolling over the profit into the next investment, always adding value to the site as opposed to merely buying and selling on a rising market.
Didn't read the indicators.
Yours truly OTOH has lived like a relative skinflint.
One annual sun holiday, but only every other year, etc.
Our practice deals in niche markets, not big commercial deals.
We don't see our boat rise as high on the tide as others.
But also we don't then get tempted to take bigger risks.
Right now our assets considerably exceed our liabilities.
But its like a certain Mr. Hobbs once said:
"Unless you're willing to sell your house and live in a tent, you can't fully realise the equity you have tied up in your house."
And while we might not be in such dire straits as others, we still need new work to support current expenditure.
After next month, we'll be looking for more...
<cue the spooky music...>
Its great to be appreciated
Just make sure you print out the correction I posted as well!
On another, more balanced note, I agree in principle with what other posters have said about you having willingly taken the risk.
However what has happend is that people who would not normally take risks in the property market have taken huge risks with their biggest investmen - their home.
This means that the fallout from this current downturn is likely to be far more severe than others, because of people being stuck paying outrageous prices for houses.
By giving purchasers a legally sound strategy to perhaps persuade developers to revisit their prices, I'm hoing that the purchasers will have a bit more disposable income to spend bringing this economy back up.
And as you pointed out Rolaga, dropping his proces will mean that the developer can still turn a profit, just not as much as he might have done.
This should have follow on benefits in helping the market for those houses achieve a reasonable balance between what you may end up paying for it and what the market will sustain say next spring.
There may be a method to my madness after all!
<LOL!>
Complainer
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Thanks for the advice and the remarkably inaccurate insights into my lifestyle. I'll give your comments all the attention they deserve.
HostBidder
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...Developers are entrepreneurs who offer [for this example] speculative developments to market.
They risk losing money on their investment when the market falls.
The newer breed of Builder-Developer is exposed to both sets of losses.
FWIW
Thanks for the clarification, the builder developers were actually the people I was referring to and I should have been clearer on that.
T
Trou
Guest
Hi, I put a deposit on an apartment in 2006 and signed a contract which said the whole development would be complete within 18 months. Not only was the deleopment not finished, neither was the apartment. In late 2007 when it was apparent that the place wouldn't be finished within the contract deadline I asked for my deposit back but it was refused. In the mean time I lost my job and my circumstanstances have therefore changed. The developer is now suing me to complete and told me that the completion date means nothing, they can complete the development whenever they like. They know I can't complete the purchase / can't get a mortgage / don't have the money, but and told me they will want to be awarded damages. Do I have a case / any chance?