Yes, but these are still threats... very real , i know, but has anyone actually paid up anything other than losing their deposits... and have you got good litigation lawyers ? or else are you just going to pay up without lawyer?

Franco

I am aware of at least 3 developments where purchasers have been sued for damages over and above the loss of deposits. There are proceedings also being issued on a major development in Canary Wharf where the losses are enormous.

Once judgment has been obtained, the developer has several options for enforcement; A Charging Order on the family home, Attachment of Earnings or, if all else fails, a petition for bankruptcy.

Just because these are property transactions, the potential in bringing a breach of contract claim particularly when the market has fallen is the main method in the developer maintaining its position with its funders; they are not going to issue proceedings in a rising market as there is simply 'no loss".

Professionally, I am seeing a lot of damages claims and every purchaser who fails to complete must be wary of a very real threat and, that a developer can issue proceedings up to 6 years from the date of the Breach.

I don't wish to worry you all but you should be aware that such claims are realistic and are taking place.

Hi, Court Papers have been served on me, due to my financial circumstances I have applied for legal aid. Current situation is that me lawyer can find no way out of the actual missives, unless someone else has? She is going to attempt to reduce the amount the developer is suing me for as she feels that they did not mitigate their losses. My situation is the same as everybody's Reserved the flat, then could not get the mortgage to complete, Would love to hear if anyone has been successful in defending this action by the developers?

i'm sorry to here that polly, truly i am. has the court offered you terms or a schedule of payment? how long were you from exchange of contracts to completion? if you don't mind telling us, where are you and what development? good luck to you, i can't help feeling the authorities / government should be made aware of this situation, something that is out of our control...

Hi, I am in scotland the developer is Taylor Wimpey, I am in touch with someone else where the same thing happened to them only difference was they were made redundant, and they could not complete either, but the same process is being applied to them.

Reserved Property in March 2009 property was ready in December, I knew late October that I could not raise the money so told them and tried to renogatiate a different entry date and asked them to remarket the property then, they would not help in any way and just let the entry date pass then go through the motions. I actually sent someone to the sales office who was interested in the property and they were told that it was sold!

I

Hi All

Has anyone purchased a property in the Bristol Cabot Circus development? I have exchanged contracts in March 2008 on the harvey Nichols tower in Bristols new cabot circus. The original completion date was January 2009 but it has now been delayed until August 2010. I received an initial 15% discount and had a mortgage approved, but now my finance has expired.

I dont want to wait until August 2010 and wish to recind the contract.

Has anyone got any experience of their development being delayed by 18months or so? Surely us buyers should not have to wait this length of time? It seems as though the developers are holding back if and when the market picks up (which it seems to be doing in Bristol).

Anyones advice would be much appreciated.

Check your contract; there should be a clause allowing recission of the contract after a specific period if the development has not been completed, as for example 30 months in our case. There will also likely be a clause allowing the developer to extend under certain 'unforeseen' circumstances - finance.groups.yahoo.com/group/flintglass

Thanks Flint

My contract does not have anything regarding a late completion. Unfortunately the contract I signed is very much in favour for the developer. There is no long stop date.

Other solicitors that I have been too have said that I have been given very poor advice from my own solicitor. They new of my intention for a January 2009 completion, but did not advice me of the contract that I signed; i,e they did not warn me that the completion date could in fact be delayed by a long period of time. If I had know this was the case I would have sought for confirmation in the contract to have a long stop date etc. Unfortunately I am only learning this now and assumed that as I was paying for professional advice my interests would have been looked after.

There is one section in the contracts that state the builders agreed to complete the property in accordance with the planning permission specification etc, with the intention that the completion certificate shall be issued as soon as "reasonably practicable" This aruguably imposes upon the builder an obligation to pursue the building of the property with all reasonable promtitude and within a reasonable period of time.

I guess if it can be shown that the builders are delaying because of lack of finance or not wanting to release the development in a downturned market, I may be able to recind the contract under their own breach.

I have tried to join your group but cannot find it. Many thanks

hello people,

i bought an apartment off plan in 2007 that i have now forfeited my deposit on.

the developer has now gone into administration, what are the chances of me being sued for any shortfall in resale price? i guess any action would be brought by the administrators, are they likley to do this does anybody think?

Hi jfingy,

when were you supposed to complete on the apartment? Have they actually finished building it? - obviously if not they are in breach of contract.

We are in the same situation in that we can't complete on a contract. We feel that we were encouraged into an unwise purchase by a very persuasive marketing claim with no pointing out of the risks involved.

I found this recent case that happened recently in New Zealand Zhang v VP302 SPV & Others [2009] NSWSC

The court ruled that two Chinese property speculators were permitted to walk away from a contract to purchase a $1.07 million ’off the plan‘ terraced building in Sydney because of misleading and deceptive conduct by the real estate agent. Both the vendor and the agent were held liable for the return of the deposit.

The misleading conduct mainly related to the content of an advertisment.

Any views on if the courts are likely to go along with this in the UK? Especially in light of recent EU Directives on misleading advertising?

Hi all, just wondering if anybody had any updates on their predicament. Has anyone been dragged to court or have you been able to negotiate with the developer? I'm due to complete end of october...now seriously losing sleep over this. Have a shortfall of about 100,000!!!!

Luckystar - I think its time for a name change!! £100k sounds like you bought into a Berekeley Development. You'll need to find a mortgage for as much as you can borrow to use as a negotiation tool. If its Berekeley there have a support group you need to join. Do a google for your development.

Good luck

Whilst I'm not involved in any such purchase - there is a related article in the property section today's Daily Telegraph that may be of interest to you all.

A word of warning however - it's not for the faint hearted

See link below:-

http://www.telegraph.co.uk/finance/personalfinance/investing/6154187/Buy-to-let-investors-backing-out-of-off-plan-deals-face-court-action.html

gsstr - thank you for posting this link.

To date the consequences of not completing on these transactions has been under-reported in the press. I found this comment interesting as I have still to encounter anyone who has suffered the wrath of the courts in this respect;

"According to the law firm the number of buy-to-let investors who have had judgments against them are now numbering in the hundreds. These court judgments are enforceable in Ireland as well as many other jurisdictions."

I found this comment even more interesting, as it seems to promote the idea that negotiation is desirable:

“As the law in this area is so clear, it is in an investor’s interests to reach a settlement with developers before a court ruling as that ruling, in itself, may impact on the individual’s credit rating.”