new apartment purchase- delay in build, trying to get out contract, any advice?

C

caitlin

Guest
Hi,

I signed contracts for the purchase of an apartment in a new development 16 months ago, it was due for completion this summer however building on the block I bought in has not yet commenced and the overall development is way behind. I am being told it will be another year before it is built.

I have been trying through my solicitor to get out of the contract but without success, has anyone found themselves in a similar situation or have any advice?
 
Is there anything in the contract about when the apartment will be complete? If not then there isn't a whole lot you can do without loosing at least some cash.

I do know people who have pulled out and the builder agreed to just keep the deposit but not chase them for the rest of the money. However in the current climate i'm not sure that would happen.
 
I don't think it states in the contract when the apartment will be complete (I bought it on the understanding that it would be finished this summner) however the contract does expire in June 2009.

I would be prepared to lose my deposit at this stage if I could just get out of the contract however I have been informed that I will be held liable for the full amount if I breach the contract.

Thanks for your reply.

Any Other advice/ input welcome!
 
I don't think it states in the contract when the apartment will be complete (I bought it on the understanding that it would be finished this summner) however the contract does expire in June 2009.

I would be prepared to lose my deposit at this stage if I could just get out of the contract however I have been informed that I will be held liable for the full amount if I breach the contract.

Thanks for your reply.

Any Other advice/ input welcome!

You could call their bluff and instruct your solicitor to inform the party that you are no longer completing the contract.
If they call your bluff , you haven't lost anything.

If you believe that the property will be worth substantially less than what you are paying for it, you could decide ( for example ) to take a leave of absence from work and thus rendering you unable to complete the contract owning to the bank unwilling to give you a mortgage based on your job status.

Dramatic perhaps, but nonetheless a valid option should it save you over 50K.
 
If you believe that the property will be worth substantially less than what you are paying for it, you could decide ( for example ) to take a leave of absence from work and thus rendering you unable to complete the contract owning to the bank unwilling to give you a mortgage based on your job status.

Dramatic perhaps, but nonetheless a valid option should it save you over 50K.

No - contracts are seldom subject to loan approval.

It is likely that there is no legal way out of the contract. It is possible that the OP could be compelled to complete - it is possible that the OP could appeal to be let out losing only their deposit but it is the precise position of both OP and developer that guides this.

So, precise advices of the solicitor employed by OP is the only way to go. Everything else is pure speculation.

mf
 
I know with houses there's usually a contract for sale and a building agreement, and there's often an time limit clause in the building agreement. It may be different for apartments, but have a look over your documentation and see if there's something similar.

@Flyfishing, there's no way that would work as you caused your own inability to complete the contract, and that's not a way out.
 
So, precise advices of the solicitor employed by OP is the only way to go. Everything else is pure speculation.

mf

But is it not the purpose of this forum to speculate as to possible avenues.

Also, I do not believe a solicitor would advise their client to take a leave of absence off work, and yet, i do believe it is a valid and reasonable option.
 
i do believe it is a valid and reasonable option.

I do not agree with this because the contract is between the builder and the purchaser and the builder will want the purchaser to go through with the contract, irrespective of any other issues. If the OP takes time off work, this is a completely seperate issue, as far as the builder is concerned, and this has nothing to do with the contract.

I would say that in a case such as this, if the purchaser pulls out the builder could possibly sue the purchaser for the lost profit, when the property has be build. This would depend upon the wording of the contract - this is one of the reasons why a solicitors advice is required.
 
... you could decide ( for example ) to take a leave of absence from work and thus rendering you unable to complete the contract owning to the bank unwilling to give you a mortgage based on your job status.

Dramatic perhaps, but nonetheless a valid option should it save you over 50K.

:confused:
 
Id like some of the legal bods to comment on this one:

There often are 2 "contracts" in the sale of an off plans unit. ( 1st being my theoretical contract, but there is some form of actual contract at this point ....)

A. A contract to pay a full deposit to then enter into a contract based on the info presented at the point of sale.
B The actual contract for sale on payment of full deposit, with all the waivers and wriggle proof clauses.

Contract B is generally fairly water tight and if a solicitor out there had found a way of getting out of this succesfully then Im sure there would have been plenty of coverage of it. Given the amount of people keen to get out of contracts.

However if the purchaser agreed to enter into a building contract based on info that has since proven woefully inaccurate, presented prior to the booking deposit, what affect may this have on "contract A". To enter into the contract proper, people hand over a deposit based on the completion dates given at point of sale. it is this " contract " I am seeking to explore.....

Perhaps ill need to re explain or make, some clarifications or tease out ideas live here, but Im sure someone can see what Im getting at and I would be interested in seeing some theories on this.
 
There is only one contract - and that is B. There is no other contract ( although you usually have linked/simultaneous building agreements and contracts for the sale of land/airspace - but for our purposes they can be described as one contract).

Before that, anything said is verbal, non binding, "subject to contract/contract denied" and, this is crucial, either side can walk away. Everyone is free to walk away before contracts are signed and they are free to query/tie in anything they want to be inserted in the contract.

mf
 
Hi,

I signed contracts for the purchase of an apartment in a new development 16 months ago, it was due for completion this summer however building on the block I bought in has not yet commenced and the overall development is way behind. I am being told it will be another year before it is built.

don't think it states in the contract when the apartment will be complete (I bought it on the understanding that it would be finished this summner) however the contract does expire in June 2009.?

I can't see any builder completing an apartment block in 11 months from start to finish. I'm no legal expert but surely his not completeing the apartment before the contract expires renders it void? I would advise to sit tight for the time being and see if this way you get your deposit back?
 
There is only one contract - and that is B. There is no other contract ( although you usually have linked/simultaneous building agreements and contracts for the sale of land/airspace - but for our purposes they can be described as one contract).

Before that, anything said is verbal, non binding, "subject to contract/contract denied" and, this is crucial, either side can walk away. Everyone is free to walk away before contracts are signed and they are free to query/tie in anything they want to be inserted in the contract.

mf

Ah yes, isnt that the unusual thing about property that it is the only? situation where a written contract under normal sale circumstances is specifically required?

As you say no contract exists despite a promise being made and a fee being handd over for a property? Exclusive o property deals?
 
I can't see any builder completing an apartment block in 11 months from start to finish. I'm no legal expert but surely his not completeing the apartment before the contract expires renders it void? I would advise to sit tight for the time being and see if this way you get your deposit back?

As you say you are no legal expert and that is completely wrong and to take that adivce a bit mad ! They will only give the deposit back if someone want to pay more for it...probability of that right now is low...
 
Its just the law. For a legally binding contract to exist for the sale of land certain absolute requirements must be met.

It can sometimes be hard to actually establish is a binding contract exists but that is normally when there is a lot of messing and awkwardness. In todays climate it happens a lot.

In this case, The Block is probably right. It may be that the time limits will expire and the contract will be ended.

mf
 
As you say you are no legal expert and that is completely wrong and to take that adivce a bit mad ! They will only give the deposit back if someone want to pay more for it...probability of that right now is low...

That's right and I'll say it again I'm no leagl expert..but the question still remains if the builder does not complete before the contract expires is the contract still vaild? Can they be forced to complete? I take it from you post that the op has no chance of the deposit back but they seemed resigned to that.

Over to you legal expert ;)
 
"In this case, The Block is probably right. It may be that the time limits will expire and the contract will be ended. "

If this happens, I suspect it is highly likely that whereas OP may be legally entitled to their deposit back, that it simply will not be there and that the developer will have folded.

mf
 
if its not started it wont be finished in time,

secondly the builder could be holding back because only a few of the apartments in that block might be sold. Id get your lawer on the case, it might be the best for the builder aswell. unless it 80% sold, there's not much in it for the builder,

P
 
That's right and I'll say it again I'm no leagl expert..but the question still remains if the builder does not complete before the contract expires is the contract still vaild? Can they be forced to complete? I take it from you post that the op has no chance of the deposit back but they seemed resigned to that.

Over to you legal expert ;)

what do you mean contract expire? The build date is practically never put into these off plans contracts, why would they?? If it is in this contrcat then surely the solicitro for the OP would have gone : cut and dry no bother....not met the contract date....so why has the solicitor not done this if its so easy.....??

The only committment to dates usually is at "subject to contract contract / denied stage" when giving the deposit. If the OP can advise there is a date in the actual contract then I would be surprised but then there is no issue, as the date was not met and then the builder has breached......Would this not be right ?

If there is no date specified then there is no "out" I would think, within "reason".
This has been discussed many times and I have indeed been in the exact situation and many others have failed to get out of contracts that were late on delivery.

Again, I too am no legal expert but Im throwing out questions and not making recommendations...
 
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