Laragan customers lose their deposits

Status
Not open for further replies.
Kate10 said:
Plywood it was absolutely bog standard for deposits to be released to builders on foot of having a homebond guarantee.
Kate.
Click to expand...

I am well aware that everybody did it, that doesn't mean it was correct. I am dealing with this everyday and I have recently dealt with a development which has gone bust where the solr held the deposits and one which went bust where the solr lodged the deposits to the developers loan and guess who was correct. A court ordered that the deposits be returned by the solr and solr no 2 didn't have them anymore. Legal opinion was sought and the result was that solr no.2 was wrong to have forwarded them to the Bank.
 
Plywood said:
I am well aware that everybody did it, that doesn't mean it was correct. I am dealing with this everyday and I have recently dealt with a development which has gone bust where the solr held the deposits and one which went bust where the solr lodged the deposits to the developers loan and guess who was correct. A court ordered that the deposits be returned by the solr and solr no 2 didn't have them anymore. Legal opinion was sought and the result was that solr no.2 was wrong to have forwarded them to the Bank.
Click to expand...

Do you have a record number and judgment details for this?

mf
 
mf1 said:
Do you have a record number and judgment details for this? mf
Click to expand...

Sorry its work related so can't reference it on the web. You'll note that the solicitor who posted didn't disagree with me though, she just said that "it was absolutely bog standard for deposits to be released to builders on foot of having a homebond guarantee".

It was also bog standard for depositors to pretend that they were non residents not that long ago (Banks even advertised non resident DIRT free accounts in their windows) and look where that ended up. Bog standard is no defence.

I don't think that people who paid deposits will be able to follow the Hanly Group. The parent would need to have guaranteed the company for that to apply and if that was the case Anglo/AIB wouldn't be following their money, they would be going for the jugular (of the parent co).
 
andycole said:
Hi Samantha -

At the Unsecured Creditors Deposit Holders Blocks A - D Creditors Meeting
on Tuesday - the examiner was asked a question specifically about the possibility of accessing assets in the Alan Hanly Group of which Laragan Developments Ltd is a subsidiary.

A Sunday Business Post article: [broken link removed] mentioned that Laragan Developments Ltd was a subsidiary of the Hanly Group.

On the Hanly Group website: [broken link removed]
the company Laragan Development Ltd is mentioned as a subsidiary.


An Examiner is entitled under Section 4 of the Companies (Amendment)Act 1990 to exercise his powers as an examiner over the Parent Company where the Company under examinership is a Subsidiary of the Parent Company. See attached Section 4 of the Act.

However at the Creditors Meeting on Tuesday - the examiner argued that Laragan Development Ltd was not a subsidiary company of the Hanly Group - and that he could not go into the Hanly Group to use the assets of the Hanly Group to pay the creditors who are owed monies from Laragan Developments Ltd.
Click to expand...

There were some posts about Laragan Developments Limited being a subsidiary of Hanly Group. So thought I would make this post to clarify if Laragan is or is not a subsidiary.

I have just had a quick scan of the last annual return submitted by Laragan Developments for the year ended 31 December 2007. They state that Laragan Developments is a 100% subsidiary of Laragan Holdings Limited. They also include a note that states "the company guarantees the liabilities of its subsidiaries in Ireland".

Can anyone confirm if any of these subsidiaries have been included in the examinership process? The financial statements show total assets less current liabilities of c. €9million. Considering we are not almost 18 months on it is easy to imagine that the group is now insolvent!

The financial statements also mention that the company is controled by Alan Hanley, this would appear to confirm Paul McCanns statement.
 
andycole said:
They have bought a home from Alan Hanly. Why should he be able to walk away from this contract, to be able to breach a valid contract and also to have €14,850 Euro in his back pocket?
Click to expand...

I think this is the central point in your angst, the fact that it is €14,850 of money that YOU scrimped and saved to provide, and you've some third party telling you "Ah sure not to worry, it could be worse !". Yet again, another developer gets his backside bailed out by the system.
 
Hi everyone -

Jack that is interesting - with regard to the fact that they do mention Laragan as a subsidiary. However I think we need to be careful with posting anything around the issue of the Hanly Group company structure - the examiner did say that he could not go into the Hanly Group and other associated companies in order to refund our deposits - so I think the business structure in this case must be very complex with regard to company law. Lets keep away from this issue.

I think we should just focus on the Homebond Insurance Certification concern - because its a consumer issue - something that does affect nearly everybody who is buying property. And its an interesting question to consider as to why contracts are offered by builders (many different builders throughout the country no doubt) with completion periods that extend longer than the Homebond Deposit protection period.

If a builder is going to be delayed in the construction of a building site should the buyer be informed that the deposit protection period will expire as a result of the delays in building?

Again I want to point out that there was a condition within my contract that stated that my deposit was being handed over to the developer/builder. And I was aware of this when I signed the contract. I do not think that there are actually any standards with regard to where deposits are held - people just need to read their contracts carefully to determine what applies in their particular circumstances.

Lastly I am not trying to give out about any advice from my solictor - about this Homebond issue - I have a good relationship and when I eventually do buy a house I will be asking for assistance again. I firmly believe that the responsibility lies solely with both the developer/builder and also the Government in the form of proper legal legislation to inform and guide buyers that their Homebond Deposit Guarantee may expire due to any possible building delays.

This whole mess can only happen when there is no established legal frameworks in place to protect a buyer, and also lets not forget protection for the builder as well.

There really is a startling lack of legal protection at present.
 
Plywood said:
A court ordered that the deposits be returned by the solr and solr no 2 didn't have them anymore. Legal opinion was sought and the result was that solr no.2 was wrong to have forwarded them to the Bank.
Click to expand...

I understand you don't want to say which case it was, could you tell us why the judge ordered the solicitor to return the deposit? The only reason I can see would be that the solicitor was negligent in handing it over to the builder in the first place but on what grounds.

It is interesting in Kate's post that there is apparently insurance in cases of deposit, I was not aware of this. Why didn't everybody just have insurance for the deposit if the homebond had time limits?

In relation to the hardship of saving for deposits, I find it hard to believe that people who were going to purchase 500K houses have a problem now saving a new deposit. They were going to be able to pay 480K mortgages (based on 20K deposits) so how on earth were they going to repay such hefty mortgages? Something is not adding up in this. It's also madness that the deposit were not even close to 10%, no room for manoeuvre at all, and I wouldn't be surprised based on my experience on AAM if the deposits weren't borrwed as well. About a year ago (?) interest rates rose for a while, I do wonder how people on these large mortgages would have coped with even a 1% rise.

I'm still waiting for one purchaser to prove how they are financially worse off because of this lose of deposit.

This whole purchase of property off plan was a complete collective Irish madness it seems to me. I dont' know about Laragan but as I'm interested in property I've visited many many housing estates both being built and completed and I am still amazed at the shoe boxes, lack of storage, lack of finish, no green areas, no parking, no public services. I imagine in the future a lot of them will become like wastelands and will probably be pulled down to build something more suitable for families and for proper collective living.
 
Last edited:
andycole said:
Hi everyone -

Jack that is interesting - with regard to the fact that they do mention Laragan as a subsidiary. However I think we need to be careful with posting anything around the issue of the Hanly Group company structure - the examiner did say that he could not go into the Hanly Group and other associated companies in order to refund our deposits - so I think the business structure in this case must be very complex with regard to company law.

My post is based on the Laragan Group, the information has been dowloaded from the CRO. The "Hanly Group" is a different group of companies that I have not looked into.
Click to expand...
 
Bronte said:
Why didn't everybody just have insurance for the deposit if the homebond had time limits?

I dont think anyone was aware untill now that it had a time limit of 24 months. When i purchased my house not once was this mentioned by anyone involved.


I'm still waiting for one purchaser to prove how they are financially worse off because of this lose of deposit.


They are angry at losing their deposits at the moment, which is understandable. When your angry and feel you have been done you tend to focus more on what you have lost and not what you have gained.
Click to expand...
 
Bronte said:
I understand you don't want to say which case it was, could you tell us why the judge ordered the solicitor to return the deposit? The only reason I can see would be that the solicitor was negligent in handing it over to the builder in the first place but on what grounds.

I dont understand why the case cannot be mentioned if a judge has made a decision then the decision is public information.

It is interesting in Kate's post that there is apparently insurance in cases of deposit, I was not aware of this. Why didn't everybody just have insurance for the deposit if the homebond had time

Can only guess that the purchasers advisors failed for advise to do so.

In relation to the hardship of saving for deposits, I find it hard to believe that people who were going to purchase 500K houses have a problem now saving a new deposit. They were going to be able to pay 480K mortgages (based on 20K deposits) so how on earth were they going to repay such hefty mortgages? Something is not adding up in this. It's also madness that the deposit were not even close to 10%, no room for manoeuver at all, and I wouldn't be surprised based on my experience on AAM if the deposits weren't borrwed as well. About a year ago (?) interest rates rose for a while, I do wonder how people on these large mortgages would have coped with even a 1% rise.

Well there are lots of possible reasons for this one being that at the time of purchase a young couple doing say professional training and knew that by the time the house was built that they would be on x and if there was any shortfall they could rent out a room or two. However, now they are out of a job and have no house to rent out a room.

I'm still waiting for one purchaser to prove how they are financially worse off because of this lose of deposit.

They are worse off because their deposits are gone! The system should have ensured that deposits were available for refund to in the event that the build could not be completed in the agreed time frame. Just like the way the depositors had to buy property creating negative equity if the build was compete. People wanted their deposits before the examiner was appointed because they were fed up being held up. If the company had returned the money these people would have the deposits available to them now! I think the point is that these people were looking for their deposits back long before the examiner was appointed!

This whole purchase of property off plan was a complete collective Irish madness it seems to me. I dont' know about Laragan but as I'm interested in property I've visited many many housing estates both being built and completed and I am still amazed at the shoe boxes, lack of storage, lack of finish, no green areas, no parking, no public services. I imagine in the future a lot of them will become like wastelands and will probably be pulled down to build something more suitable for families and for proper collective living.
Click to expand...

I totaly agree, it was madness and a sin with what the builders were getting away with but I think people felt that they were being forced to buy in this way because of the rate at which property prices were increasing. I think a lot of people were just buying what they could to get on the property ladder.
 
Hi, did anyone listen to Joe Duffy yesterday where a supplier was on and he said he had proof that Laragans didn't have the money to complete the builds since Sept 2006 he said that anyone can contact him. I missed his name and was wondering did anyone else catch it?
 
Caz said:
Hi, did anyone listen to Joe Duffy yesterday where a supplier was on and he said he had proof that Laragans didn't have the money to complete the builds since Sept 2006 he said that anyone can contact him. I missed his name and was wondering did anyone else catch it?
Click to expand...

Well if this is the case the company was trading while insolvent and is a serious no no and it proven the directors of the company can be held personally responsible for the debts of the company.
 
I was listening to this yesterday on the Joe Duffy show.
I think the company was Connelly Construction based in Drumcondra/Fairview.
However Joe did say that this cannot be legally or accurately determined if this indeed is the case - its just an accusation at the moment.
This is legally dangerous to discuss so we should leave this alone.

Caz said:
Hi, did anyone listen to Joe Duffy yesterday where a supplier was on and he said he had proof that Laragans didn't have the money to complete the builds since Sept 2006 he said that anyone can contact him. I missed his name and was wondering did anyone else catch it?
Click to expand...
 
That's why I like to talk him. My examiners document is with my solicitor so can't scan the suppliers names. I don't want to say what he does or where he is located on this forum.
 
andycole said:
I was listening to this yesterday on the Joe Duffy show.
I think the company was Connelly Construction based in Drumcondra/Fairview.
However Joe did say that this cannot be legally or accurately determined if this indeed is the case - its just an accusation at the moment.
This is legally dangerous to discuss so we should leave this alone.
Click to expand...

I am nearly certain that this is the same creditor that was petitioning the High Court to appoint a liquidator but the Examiner was appointed in before the case was heard!
 
HI everyone,

Jack the furniture example is not comparable. If you buy a piece of furniture the shop undertakes to deliever it within a limited period of time. In this situation people signed contracts with a very long construction period - in other words they agreed that the builder did not have to build or deliver the apartments for years. They may have expected the apartments to be delivered sooner, but that is not what their contract said.

Re. the release of deposits - plywood there is nothing legally incorrect in releasing a deposit as long as both side agree to do so. In the vast vast majority of housing developments in this country, purchasers agreed in their contracts that their deposits could be released to the vendor, subject to delivery of homebond/premier direct documentation on exchange of contracts. To compare this to off-shore accounts and fraud on the Revenue is just stupid. I don't know where your example is coming from, as you will not cite it, but the only way a solicitor could be at fault for releasing the deposits would be if he/she were not permitted to do so under the contract, but did so anyway. That is a completely different situation.

Just to clarify when I mentioned insurance - homebond/premier guarantee are insurance policies. I have seen contracts for UK property purchases which provided for the purchase of new insurance where there were delays in completing for whatever reason. I've never seen anything like that in Ireland.

I think Andy's points are well made. Frankly I think that the issue re the gap between the construction period and homebond cover is likely to be brought up in a law soc practice note or something similar, and solicitors and their clients will be less likely to accept such contracts in the future.

However, in terms of liability, it seems to me that the company has accepted that it is liable to the purchasers for the contract deposits. Unfortunately, as it is insolvent, it cannot afford to repay them. The only reason people are getting out of potentially ruinous contracts however, is because the company is insolvent. Again I think the purchasers are bloody lucky.
 
Kate,

Are you actually saying that the builder has an infinate amount of time to complete the build?

My example is comparable in that I have been saying that it is not right/fair that the builder has so much protection and that they and can miss the original completion date with no penalty. Also, not right that the period of the build is not covered by Homebond, considering the amount of similar developments! This practice as you say definately needs to be reviewed.

In the absence of homebond the builder should not be allowed to use deposits that should be available for refund should the builder be unable to complete the contract.
 
Status
Not open for further replies.
Back
Top