Has anybody pulled out of a contract to buy an apartment and been pursued??

I act for a developer and we are pursuing a few people, retaining the deposit, selling (at current value) and then looking to recover the loss. They are fairly liquid though.

I get the impression that many big fish are too busy trying to stay afloat to think about chasing the small fry.

Personally i think it's a bit rich, however it's my job.
 
Problem for FTB's is that they wouldn't actually be able to borrow the money to buy the apartment (nor would an investor). The banks will not lend money where the property value is worth less than the loan and most banks are having properties re-valued.

This is why I feel it is being harsh on people to say "they may have problems obtaining finance or they may quite simply have decided (in an acutely "blonde" moment) that actually they don't feel like completing. Contracts are binding. People should not sign them if they do not intend to be bound." No-one I know would have €500K cash sitting around to buy a property and it has happened to clients of mine that the bank re-values the property and will not loan what they first agreed to loan when the contract was signed.

Letters from builder's solicitors used to arrive with contracts stating in the letter that they could not be signed subject to loan approval and people would get approval for x amount. Loan offers usually expire after a year and you can guess what happens now if the property has taken a long time to build. Bank has to issue new offer and property is worth less. Everyone's a loser really as usually the FTB's want to buy the properties and live there.
 
Interesting Stifser that they are going the damages route rather than specific performance. I have always figured that it may be a better option for developers and I guess from what you say that they pick and choose their targets. I would also guess a few smaller ones will go belly up before they get into court.
 
frankor2 said:
Based on current rents, using a rental multiplier of 18, the property is worth €345,600, assuming rent of €1,600 per month which is on the high side for a 2 bed. There is really no other way to value when there is no market.
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As a supposedly sophisticated property investor, what other way could you possibly "value" the proposed investment, other than the rental yield?

I hope the developer goes to town on you. If I were him I would sell that apartment to my cousin/nephew for €50k and sue you for the difference. I would quite happily put you out onto the road to get my money back too.
 
Nice.
 
"As a supposedly sophisticated property investor, what other way could you possibly "value" the proposed investment, other than the rental yield?

I hope the developer goes to town on you. If I were him I would sell that apartment to my cousin/nephew for €50k and sue you for the difference. I would quite happily put you out onto the road to get my money back too."

Meow!
 
You should ask your solicitor to serve a completion notice if there is an 18 month time limit specified in the contract. It is arguably not necessary and you could issue proceedings now but it would be extra protection and would give them 28 days to complete after which you could issue proceedings against them.
 


we did and basically got the 2 fingers back, issuing proceedings would take too long and too much money, money that we dont have
 
It sounds very much like the builder has no money themselves. Is the property even being built? You could ask your solicitor about the option of trying to wind up the company as they can't pay their debts.

Homebond could then be used to claim back your deposit. You should probably have your solicitor contact Homebond and write to the builder's solicitor saying will pursue deposit from Homebond and if necessary seek to have the company liquidated.
 

Foundations have been laid and work is still ongoing.
 
foxylady said:
Foundations have been laid and work is still ongoing.
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This saga has been going on for nearly a year. Has it not become obvious that you have to bite the bullet, decide what you are going to do, do it ( with all the attendant risks) and then get on with it?

Either you are going to stick with the extended completion period and hope for the best i.e. that the builder does not go bust in the meantime or you are going to serve the completion notice and, ultimately, look for your deposit back. Which you may or may not get. Including serving proceedings which, yes, will cost you. ( Any reason why the solicitor should work for nothing?) And, yes, will very likely push the builder into liquidation. But at least you will have ended the torment of not knowing what is going on.

This is serious and you are the one who has to decide what you want to do.

mf
 
Foxylady, was there a set time limit in the building agreement for the property to be built? It there was and it has passed then you arguably are entitled to rescind the contract immediately (baring the force majeure clause which allows them to extend work for happenings outside theri control and I believe this would have to be construed strictly under the contra proferentum rule)

To be extra certain you could serve a completion notice stating that you are ready willing and able to close. Then the builder has a further 28 days to close. If they do not comply then write to them stating that the deposit must be returned. (they have 5 working days to do so).

If they do not then you can either sue them in the appropriate court for the amount of the deposit. Alternatively you could bring winding up proceedings immediately as a creditor of the company although it is felt that you will be in a better position with a court judgment against the company.

MF1 is right in that you have to act and bring matters to an end. Service of the Completion Notice and written request for deposit after 28 days should mean that contract is at an end and can no longer be enforced against you but does not guarantee return of your deposit which the builder may not have in any event.

Court proceedings are probably the only way to force a final outcome so that you can move on and look at buying another house. The threat of liquidation may force the builder to return the deposit.
 

timeframe was 18 months, notice was served and ignored. How do we go about bringing winding up proceedings. We do want an end to this but currently arent been let ou of contract
 
We are trying but it aint that easy, if it was there would be no problem. I dont expect the solicitor to work for nothing but do expect him to work.
 
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