can't complete on UK property

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zxcvbnm

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I have bought a property in the UK last year off plan and will not be able to complete due to simply not having the finance due to falling prices and tighter lending.
(Won't be completed for another 2-3 years)

Also - I do not have any money to be sued for here in ireland.

What is a realistic outcome to this situation?

Presumably I will lose my deposit anyway.

But what after that?

As I said - The developer can sue me - but i don't have anything to give him !

WHat happens next?

Is it just a case of bad luck on the developer (and me with losing my deposit).

Or are there more serious consequences that i am not aware of?
 
If it will not be completed for another 2-3 years, how are you so sure that you will not be able to afford it? Can you save money in the interim time to bridge the gap between price and loan?

Have you approached the developer about pulling out? The developer may be happy to take your deposit and not build at all.
 
ontour said:
If it will not be completed for another 2-3 years, how are you so sure that you will not be able to afford it? Can you save money in the interim time to bridge the gap between price and loan?

Have you approached the developer about pulling out? The developer may be happy to take your deposit and not build at all.
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I cannot save as i have other financial commitments.

Besides - the property is in london. I bought right at the peak.
it will probably be down 20% - 30% by the the time the completion date comes around the way things are going.

Also - it is a unit in a large development - builking has already started.
So me pulling out is not possible.
 
Probably the most serious consequence would be if the builder purused you and registered judgements, your credit rating would be impaired.

If you have other assets, they may be able to register judgements against those.

Realistically if it is 2-3 years away and the developer will not let you pull out now, you have no choice but to take a wait and see approach. London may be more resilient with the Olympics not to far away from your expected completion timeframe.
 
Would that affect my credit rating here in ireland?

Or would it just apply to the uk?

Also - what does register a judgement against other assets mean?
That they are next in line after the irish banks to any eventual profits in the event of me selling?
 
You will need to read the terms of the contract in order to find out what options are available to the contractor if you decide to pull out. You will probably find the answers to most of your concerns there. For advice on something like this you should really go to your solicitor.

However, the following could be a possibility:

If you pull out there is a chance that the developer could keep your deposit and sue you for the difference between the price that you agreed to buy it for and the price that he eventually gets for it (not sure what the chances of him doing this are). It is unlikely that you would be able to prove to him that you have no assets without it going to court.

As far as the developer is concerned, you entered a contract to purchase the property and he is likely to expect you to complete the purchase, as per the contract. The fact that you are unable to raise the funds to complete the contract is your problem.

Also, by 2 or 3 year's time mortgages may become more readily available and the market value of the property will have changed. No-one can say for definate if the prices will contine to fall or if they will have started to improve by then. It all depends upon supply and demand and the supply of mortgages. As there are very tight restrictions on building in London, demand for property often excedes supply so the current price falls may not last as long as elsewhere.
 
Steve D said:
As far as the developer is concerned, you entered a contract to purchase the property and he is likely to expect you to complete the purchase, as per the contract. The fact that you are unable to raise the funds to complete the contract is your problem.
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Thanks for the reply.

However - one bit where i would disagree with you is the line that "The fact that you are unable to raise the funds to complete the contract is your problem."

Yes - it is my problem - but is it not therefore ultimately also the developers problem whether he likes it o notr?

I suspect a lot of developers are concerned that a lot of their units that have been signed cannot be comleted by the purchasers.
This is not a good siuation for develpers.

You are right in that it would probably involve a court trip to prove i have nothing.
But i actually have nothing to give - so in that regard the court trip doesn't bother me.
 
I realise that it will be a problem for the developer..that is why he is likely to try get as much money from you as he possibly can.

Yes, but a court trip may possibly bankrupt you! That would have very serious consequences!

You really need to get your solicitors advice on this.
 
would it be an irish court?

If you are bankrupt in one country are u considered bankrupt in all countries?

Is the fact that the property is the uk and not ireland of any advantage to me ?
 
Oh for goodness sake!

Do people have any concept of personal responsiblity for personal actions? Why are people constantly trying to slither and slide away from responsibility for their own actions?

You agreed to buy something, you signed a formal, legally binding, important contract that you must have understood and now you've changed your mind and you want out.

I think if I was a developer I would sue all of the renegers, get my judgments and wait in the long grass to pounce when fortunes improved.

And yes, they can get their judgment here and enforce it here.

mf
 
This is absolutely ridiculous. So, you bought a property for the purpose of flipping it with the intention of walking away with a nice tidy profit and it hasn't worked out. The market has changed and you are crying wolf, and hoping the developers will leave you alone. So this is Modern Capitalism -- take the profits and walk away from the losses.

Wakey wakey -- it does not work like this. You signed and are legally obliged to complete. Bankruptcy in the UK is much easier to enforce in the UK than in Ireland and it remains on your record for quite a period in time.

I doubt if any developer will be easy on you in the present market. Your best option is to try and sell your contract on, with a loss or to pay somebody to take it on, risk and all.
 
mf1 said:
Oh for goodness sake!

Do people have any concept of personal responsiblity for personal actions? Why are people constantly trying to slither and slide away from responsibility for their own actions?

You agreed to buy something, you signed a formal, legally binding, important contract that you must have understood and now you've changed your mind and you want out.

I think if I was a developer I would sue all of the renegers, get my judgments and wait in the long grass to pounce when fortunes improved.

And yes, they can get their judgment here and enforce it here.

mf
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That's a crazy rant.

It is not that i am trying to slither and slide as you suggest.

I am calling it like it is - I thought I would be able to purchase it given my financial situation at the time.
My financial position has since changed.

I now simply do not have the funds to buy it.
If I could I would - however I don't. Flipping it was not my intention at all.

Simple as that. These things happen.
It's not like I haven't lost a few quid in the deal myself and am walking away without a care in the world.

Lets keep a little bit of reality on the situiation here without getting carried away with ourselves in thinking we're great taking the moral highground.

Maybe a constructive suggestion instead might be an idea if you have one?
 
Your best option is to try and sell your contract on, with a loss or to pay somebody to take it on, risk and all.[/quote]

That's a suggestion. Worth a bash ??
 
As I know the London market well (meant to anyway), send me a PM with the details and I will offer you an opinion on the best route forward.
 
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