Off Plan gone wrong - developer looking for more

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bingojoe

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In March 2004 I signed a contract to buy an apartment off plan in Leeds from a UK developer for 196 k STG and paid a 7 % deposit.
The intention was that the price would increase a good bit and I could flip the contract and this notion was promoted by the Irish Broker who was handling the deal. Well the market has been flat and when I was called to complete 5 weeks ago, I decided not to in the knowlwdge that I would lose my 7 %. In the contract there was a clause entitling the developer to call on me to pay a further 3 % , to make up a 10 % contract deposit.

One might think that having already got over 12 grand STG from me for nothing he might leave it but apparently not - I have been told he is going to pursue the other 3%.
Legally he may be so entitled, but morally ....well - he is probably not too well up in morals.

I have taken a fair hit on the chin and don't particularly want to throw more money away.

Does anyone have any advice ?
 
Are you serious?

You entered into a speculative contract. You got a right to buy a property at a future date at a fixed price. You paid 10% of the price for that right. The builder had an obligation to sell you at a fixed price, irrespective of the market value at that time.

You were motivated by profit. The builder was motivated by profit.

He is legally entitled to ask you to complete your side of the contract and, I would say, he is morally obliged to ask you to complete your side of the contract.

Brendan
 
bingojoe said:
The intention was that the price would increase a good bit and I could flip the contract and this notion was promoted by the Irish Broker who was handling the deal.
Click to expand...

What would you expect an Irish auctioneer / estate agent / broker to say ? Pay your deposit, the property price will probably fall ?
 
bingojoe said:
Legally he may be so entitled, but morally ....well - he is probably not too well up in morals.
Click to expand...
"Morally" you are the only one who is or is attempting to break a contract and as a result commit a "wrong".
You are breaking a deal, a promise in effect!
 
bingojoe said:
In March 2004 I signed a contract to buy an apartment off plan in Leeds from a UK developer for 196 k STG and paid a 7 % deposit.
The intention was that the price would increase a good bit and I could flip the contract and this notion was promoted by the Irish Broker who was handling the deal. Well the market has been flat and when I was called to complete 5 weeks ago, I decided not to in the knowlwdge that I would lose my 7 %. In the contract there was a clause entitling the developer to call on me to pay a further 3 % , to make up a 10 % contract deposit.

One might think that having already got over 12 grand STG from me for nothing he might leave it but apparently not - I have been told he is going to pursue the other 3%.
Legally he may be so entitled, but morally ....well - he is probably not too well up in morals.

I have taken a fair hit on the chin and don't particularly want to throw more money away.

Does anyone have any advice ?
Click to expand...

At 10% hit you should rethink ...maybe you should try to complete. Leeds is one of the better bets on places in north uk that may see gain etc
 
How would you feel if you were in a position to profit on the deal but then the developer decided not to honour the contract??
 
Who was the Irish broker? I think the replies have been a little harsh given that the OP was lead to believe he was not buying a property but could flip a contract. The builder would have been aware of this also unless the broker was lying.
 
Nobody is stopping him from flipping the contract - he has chosen not to because the market isn't where he thought it might be. There is nothing to suggest that the broker and/or developer are preventing him from flipping the contract. Whether he makes a gain or suffers a loss in doing so is his own business.

Frankly, I can't see why the OP believe the developers actions to be immoral. Developer had agreed a sale, and OP is now pulling out. Developer now has to readvertise the property, possibly incur further interest on loans/overdraft and risk selling the property for a lower price.

I'm afraid I'm in the no-sympathy camp.
 
bingojoe said:
In March 2004 I signed a contract to buy an apartment off plan in Leeds from a UK developer for 196 k STG and paid a 7 % deposit.
The intention was that the price would increase a good bit and I could flip the contract and this notion was promoted by the Irish Broker who was handling the deal. Well the market has been flat and when I was called to complete 5 weeks ago, I decided not to in the knowlwdge that I would lose my 7 %. In the contract there was a clause entitling the developer to call on me to pay a further 3 % , to make up a 10 % contract deposit.

One might think that having already got over 12 grand STG from me for nothing he might leave it but apparently not - I have been told he is going to pursue the other 3%.
Legally he may be so entitled, but morally ....well - he is probably not too well up in morals.

I have taken a fair hit on the chin and don't particularly want to throw more money away.

Does anyone have any advice ?
Click to expand...



I would say you should complete. You cant walk away from this. At least if you complete you could hope to rent out the property. It doesnt sound wrong at all that you are being asked for more money. What does sound wrong is that you have been entised by a broker/agent who has been a little overzelious and not made you aware of the pitfalls shoudl the market not live up to his overexpectations, but he was obviosly a good salesman. It cant be all that bad, okay you havent acheieved a flip to walk away with equity but you will own the property and perhaps look to sell in a year or 2 down the line? Was this a first attempt at looking to flip a property or have you done it before?
 
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