Milner Square - bank valuation of 300k down from 420k

The bank are in effect saving him from paying 200k over the lifetime of the mortgage and he thinks this is a bad thing? The property is over-priced. It MUST come down to what people can afford.

Problem is he signed a contract to purchase at top of the boom prices and now can’t get out!

The developers are blaming the weather for not completing within 24 months of contracts being signed!

Not many happy campers on that thread.

Doesn’t read like that to me; in fact he says a bit further on he’d be happy to loose his deposit rather than have to complete.

Let me get my head around this.

These people bought apartments more than two years ago, knowing that it might not be ready for up to 2 years (perhaps longer).

Ok, it was a crazy time, I can deal with that.

But…with a purchase price back then of 420K, they are now finding banks only willing to value the place at 300K.

Now, correct me if I’m wrong but that suggests a drop in actual value of approx 30% from 2006 prices.


Those 2006 prices were off the plan prices which should in theory have been on the low side.


These apartments still aren’t built.

Clucking Bell :open_mouth:


I’m surprised that you’re surprised Rob. Gird your loins cause it’s gonna get far worse. You’ll be all out of surprises by the time the big surprise comes. The big surprise is BertieBasher wasn’t bearish enough. I got the time line all wrong but my 80,000 for a 2 bed apartment in Dublin is gonna be right.

Stop referring to yourself in the 3rd person BB.

Who do you think you are, Julius Caesar :slight_smile: :slight_smile:

Has anyone actually heard of any of these contracted buyers going to court yet ?

This guy, for example is looking at a €120k NE hole, assuming he can get a mortgage & then he has to pray the value doesn’t drop any further. With money like that at stake I’d be camping out in my solicitors office looking for ways out of the contract.

I’m surprised that my name is Rob.



And he has to fund it from he’s own pocket, who said negative equity only effect you if you have to sell!


Surely there is an implied term in the contract, that the buyer was getting a mortgage, and that the contract had an implied term that it was:

  1. subject to a mortgage being granted, and the property being constructed to a standard that would would render it good security for a mortgage advance to facilitate its purchase.

  2. subject to the lender concurring with the value

  3. subject to the property being completed on time

Implied terms are determined by the notional bystander test

It is difficult to see how the weather could have delayed construction

Well I’d love to see them use the argument that rain delayed construction of something in Ireland :slight_smile:

As for the contracts for new builds, I was warned off by my solicitor in relation to the developer holding all the cards in one particular the contract. I’m not sure that people were offered the same advice but I am sure that at the time people were just happy to get there hands on a place off plans what with the queuing overnight etc… and any contract weaknesses would have been ignored I’m sure.


I found the answer to my own question in that thread page#16

If one article ever summed up the total clusterfuck that is the irish property market this is the one !

, the perfect starter home for a young couple.

“When we arrived at the show apartment there was a frenzy of buying,” says Reeves. “This was the peak of the property boom, and within hours of arriving prices were already going up. We made a snap decision to sign for a two-bedroom apartment with a completion date of 18 months, in November 2007. We have regretted it ever since.”

Reeves paid a EUR20,000 deposit and signed a contract for the EUR505,000 apartment, but, two years on, he has nothing to show for his money. He says that Laragan Developments, the builders responsible for the scheme, have not been in contact over completion delays, so he turned to Douglas Newman Good, the selling agents, for an explanation. “I was then told that due to unforeseen complications the completion date would be February 2008,” says Reeves. "The explanation given was that the rock was harder than expected.

“Then I was told there was trouble moving electricity pylons. The next explanation for delays was the bad weather and, finally, I was told the council wouldn’t allow the developers access to the main road. I’ve now been told the completion date will be anything from April to the summer of 2009, three years after putting down a deposit.”

Tired of waiting, Reeves and his girlfriend, Emma Masterson, bought a property in a neighbouring development by another builder, and no longer want their Carrickmines Green apartment. But rescinding their contract has been difficult, with legal doubt over whether they can get their deposit back.

“Our solicitor explained that the wording in the contract, ‘the apartment will be completed as soon as practical’, was ; open to interpretation,” he says.** “We are considering legal action to obtain our deposit as we feel three years or longer to build an apartment is totally unacceptable, **but this is a big risk as we will be taking on a large development company.”

In the property downturn, some builders have experienced financial trouble, with the result that suppliers to these builders and other buyers are affected. An ominous sign for buyers like Reeves is that Laragan Developments and the Hanly Group, of which it is a subsidiary, face High Court actions from suppliers, contractors and a real-estate agent, Savills HOK, over an outstanding debt.

Other Dublin schemes are in a similar position as buyers wait for builders to finish homes they agreed to buy several years ago. The problem is, however, that most purchasing contracts are issued stating a completion date with a provision to extend finishing times if needed.

“Generally, in a contract for a new house, you don’t have an exact closing date,” says Niamh O’Grady, an associate in the property department of William Fry Solicitors. "There is a standard form of a building agreement between the Law Society and the Construction Industry Federation [CIF] thatstatesyou must close within 14 days of notice from when the developers or the developer’s solicitors tell you the property is completed. The problem with completion periods is that they are usually fairly long, and if you’re a solicitor acting for the developer, you would normally advise them to be flexible and take a completion period of between 12 and 24 months.

“In that same agreement, there is a provision stating the period can be extended for a reasonable time if the completion or builder is delayed by a cause not within his control, or by the interference of the employer or purchaser.”

People who believe the completion date agreed in their contracts with builders has long passed can take the matter to court or try to have the deposit refunded.

Buyers in Carrickmines Green openly discuss their concerns over delayed completion dates on an online forum. One participant claims to have been given seven completion dates, while another has been told their three-bedroom townhouse, bought in May 2006, will not be ready until November. Those who have moved in, however, are complimentary about the finish.

Elsewhere, buyers in the 300-unit Miner’s Square development in Santry, also built by Laragan Developments, are threatening legal action after the developer missed completion deadlines. One buyer, a 27-year-old college graduate who did not want to be named, paid a deposit of EUR15,000 in May 2006 on a twobedroom apartment costing EUR435,000. When he signed for the apartment, the contract stated a completion date of June 2007. The buyer was told last December that because of bad weather the apartment would not be ready until November of this year.

“I have now issued a completion case to the builder which states that they have to have the apartment ready within 28 days,” he says. “I received a letter from solicitors acting for the builders who don’t believe their client is in breach of contract. The correspondence stated that if I pull out of the contract I’ll lose my EUR15,000 deposit, and if the apartment then sells for a loss, I will be responsible for the shortfall. The entire process has turned out to be a disaster.”

Losing a deposit is one of several worries facing these buyers. Some apartments bought two years ago have dropped in value — one Milner’s Square buyer estimates the value of their unfinished apartment has fallen by EUR100,000 —and mortgage borrowing is more difficult to secure. “When I bought, my parents paid the deposit, and I had to come up with EUR50,000 of the overall costs for the banks to lend me EUR380,000,” he says. “This was with my parents as guarantors. But the problem is, I bought off the plans and when you get mortgage approval it only applies for six months. This means 1 am unlikely to be able to borrow the same amount in the current climate, and leaves me high and dry.”

In a statement to The Sunday Times, the Hanly Group confirms that Laragan Developments has completed the first phase of the Milner’s Square complex, with the remaining phases to be completed in the next 12 months. Completion statements have been issued to phase 1 buyers (Block F). All remaining customers can expect completion statements in the coming months.

“Unfortunately there were some unforeseen delays in completing this development which related to the demolition of a pre-existing industrial unit on the site and the removal of industrial power lines and services,” says Enda Hanly. “However, we have kept our customers fully informed of progress over the past 12 months and we are delighted to have the first residents of Milner’s Square now moving into the development.”

In relation to Carrickmines Green, Laragan Developments confirmed that phase 1 is ready and phase 2 is nearing completion. The company says completion statements have been issued to most clients and further statments will be issued in the coming weeks. The entire scheme will be ready next year.

The economic downturn and declining property prices have affected other builders. In May, the High Court appointed a provisional liquidator to two related development cpmpanies in Dublin. The court was told that Denis Finn Ltd (DFL), operating since 1983, and a related company, Keverville Ltd, were insolvent. One of the reasons was houses built by DFL were “simply not selling”, and the company has a number of sites in the Howth and Sutton areas that are unfinished Construction sites.

Builders could argue that delays have always occurred and often benefited buyers, particularly investors, when property prices were rising.

The CIF says it is not aware of builders leaving unfinished developments or facing legal action, and that it is not a widespread problem for buyers. Legal experts say the number of buyers trying to pull out of purchase contracts is rising as consumer confidence falls. Some lawyers say that taking the legal route is long and arduous, and the courts insist on’a certain degree of reasonableness on land transactions. This can include lengthening completion times for developers after contracts have expired.

“This issue has come up a lot because of the downturn and people want to get out of contracts,” says Conor McGowan, a solicitor specialising in property law. “The reality is that if they have paid their deposits and mortgage payments haven’t commenced, they are not suffering ongoing loss. The only loss is the deposit, which they would have paid anyway.”

Look at what I will call the Available Funds Ratio or AFR for this property.

  1. In January 2007 the borrower could have borrowed 100% of €420k or 420k

  2. In August 2008 with the banks valuer kyboshing the developers valuer and with an obligation to save or obtain hard cash by other means to make up 15% of the low valuation the borrower can only Borrow €255k

€255k is only 61% of €420k .

The banks are only funding 61% of what they were funding over a year ago …and thats what I call a low AFR .

40% down , partially market driven but additionally by skin requirements of 15% ( no guarantor) and ruthless valuations .

The 24 months threshold is the only out for people stuck in this predicament.

Tbh, I’d be at the solicitors a week in advance and make sure the letter was going to the builder the first second of the 25th month.

Record No. 2009/83COS

Advertised in today’s Irish Independent - located on p.24 Classifieds
Petitioners are Velfac Windows Ltd against Laragan Developments / Hanly Group to have company wounded up.
Hearing is this Monday 23rd March 2009 in the High Court. … tcount=590

Today’s Irish Independent dated Thursday March 12th 2009
Location - Classified page 24 beside Cinema Movie Listings.

In the matter of Laragan Developments Limited
And in the matter of The Companies Act 1963 - 2006
Laragan Developments Limited

NOTICE is hereby given that a peitition for the winding up of the above named Company by the High Court was on the 20th of February 2009 presented to the High Court by VELFAC Ireland Limited (the Petitioner) whose registered office is Ground Floor and Third Floor, Unit H, Own Door Offices, Citywest Shopping Centre, Citywest, Co. Dublin a Creditor of said company and that the said Petition is directed to be heard before the High Court on the 23rd March 2009 and that any Creditor or contributory of the said company who wishes to support or oppose the making of an Order on the said petition may appear at the time of the hearing by himself or his Counsel for that purpose and a copy of the Petition will be furnished to any Creditor or contributory of the said Company who requires it by the said undersigned on payment of the regulated charge for the same.

Simon Carty Solictors
Solictors for the Petitoner
25 Lower Leeson Street
Dublin 2

NOTE: any person who intends to appear at the hearing of the said Petition must serve on or send by post to the above name Petitioner or his Solictor, notice in writing of this intention to do so…

not later than the afternoon 5pm of 19th March 2009

I was wondering how Alan had stayed out of the press so long.

Edit: whoops! Just read the thread title.

The man on the Ealing bus wouldn’t be so kind i’m afraid.

before the boom, sorry, balloon, many contracts were signed subject to loan approval, when prices started going up builders didn’t need to do buyers any favours and they refused to accept such “special conditions”. Basically they were saying that if you didn’t want to buy then someone else would…