heard a solicitor is suing 40 people to force them to complete on signed contracts. previously they signed thinking they would get full /95% finance now they need a 20% deposit and they cant raise this amount,don’t have it. looks like bankruptcy looms for allot of people.
What part of the country?
dublin, not sure where exactly in dublin but they are apartments . solicitor is acting for the builder. they bought 18 months ago off plan, and they are built now for a little while.
thing is the solicitor was asked was he busy, he said yes surprisingly but its ‘sad’ then described why it was sad. thing is the developer would be negligent to not persue the buyers as they are signed contracts. he persumably could be held liable for the debts of his company if acting negligently, same for solicitor ethically. got to be done.
What can they do exactly if the guys don’t have the money they don’t have it. will bankrupting them do the dev any good? Can a judge order payments of future earnigs type thing. excuse my ignorance
It does seem to be legal ass-covering, more than a genuine attempt to get the money. If the developer company goes bust, but no effort was made to retrieve debts, then there could be repercussions for the developer and his family (who usually make up the Board of these companies). Various rules and penalties for Directors of a company that goes bust through negligence and mismanagement, see.
There was always going to be some builder in deep enough shit to start an action like this, & if they were going to chase one recalcigent buyer, they might as well chase them all.
I’m torn between our ‘moral dilemma’ & sticking it to the developers. If nothing else I’d actually be in favour of the consumers crowd providing legal support for the buyers, so that in years to come we might end up with a ‘standard’ contract that protects both parties in a property purchase.
do you not think that they will get the money or some of it? is it just the deposit thats forfeit or can they sell at market value which may be shortly half and then recoup the loss from the original buyers with legal fees. if they dont pay persumably they can be bankrupted?
This is where ‘push is coming to shove’ from the banks. The banks are squeezing the developer and the developer is left with no option but to squeeze purchasers. The purchasers at the end of the day will not be taken for the full amount - just the difference between the contract price (less deposit) and the price achieved in a distressed sale. Still that could saddle people with anything upto 100k of losses and debt with nothing to show for it but a very bad experience. There is going to be a lot of fire sales of these type of developments coming up in the next year and a lot of really very sore people, investors and FTB’s.
This is one of those realities of buying a house in Ireland that way too many people aren’t aware of.
Once you sign a contract to buy a property, THAT’S IT !
You no longer can opt out & just loose your deposit. If you try to, the other party in the contract is perfectly entitled to sue you for breach of contract. That’s what this developer is doing.
How the buyer pays for the property is the buyers problem, just the same as when you buy a car, the salesman doesn’t give a monkeys if you have to sell everything you own & then go to the knee-breakers for the rest. They just know that you signed on the dotted line.
Ah Shure this is nothing, I thought that all solicitors over the age of 40 were to be struck off all of a sudden .
I have very limited sympathy for the purchasers.
If I had a contract to supply Company A with widgets in six months time, at a set price, and they came to me a few weeks before hand saying Company Z could now supply them at half the price, would I say “fair enough so” and walk away? Don’t think so.
I know people who were popping out on a Saturday morning to buy an apartment off plan as if it were a new jumper. I know one fella who bought two off plan, in Ireland, without even seeing them. Not Dubai, not Bulgaria, but Leitrim.
The chickens are coming home to roost.
I’d just like to point out two things:
it’s not the solicitor who is going after the contracts, it’s the solicitor’s client
we don’t know who the people he is going after are. true, they could be people who can no longer get the mortgage they thought they could get, but also they could be big developers refusing to pay up on €50m land bank deals, investors who bought 20 properties in one go, trying to force someone to buy a ftb property from a mover upper in a chain etc etc.
What I would say is that the courts might not force ordinary joe soaps to complete these transactions, for the boring legal reasons stated below.
Legal reasons: to force someone to complete a contract you sue them to get “specific performance”. However there is a rule that specific performance will not be granted where damages (i.e. a cash award) is an adequate rememdy. While specific performance is often granted to the purchasor, and also to big developers, I think that damages would be adequate for an ordianry home purchasor to pay to a builder developer, and for that reason I think that instead of having a property foisted on them, they should be able to buy their way out of these contracts. It’s not great, but that’s life to be honest.
Is it not the case that in this scenario the banks have financed both the developer and the purchaser? If the developer and purchaser have used the same bank, the bank will be effectively chasing itself for its own money!
it’s all part of watching a car crash in slow motion, the only other option at this point for the banks is full disclosure. aren’t the bank directors bound by their shareholders to pursue someone? eventually the buck will stop at the feet of the shareholders.
In the case of a developer going after someone for cash when they fail to complete, in a worst case scenario, can a judge make them sell/remortgage their PPR if there is sufficient equity in it ?
Also - how easy/difficult is it for a dveloper to sue if the property is bought overseas ?
I have this image of a middle-aged man going into his Doctor after his physical & blood test, & the Doctor weighing up whether its kinder to let him know he has only a year to live, or to let him live on without fear & regret for the time he has left.
I was talking with a banker last weekend and off the record he said the banks are scared as they’ve never had to deal with the likes of the world of shit they see unfolding.
They know now they’ve lent over the odds. Developers owing a few hundreds of millions are running out of cash before finishing projects (nothing is selling off plan as was expected when the ball got rolling). So do they lend more, when they chance of getting it all back are looking slimmer by the day especially when they’re reeling things in on the mortgage lending side?
Interesting times ahead.
Of course this particular thread is based on hearsay. I would like to see something more ‘concrete’ excuse the pun. If it is true though, it is the shit hitting the fan, big style.
Makes sense though , the builder does not want corporate enforcement people on his ass …and holds contracts entitling or even obliging him to chase the signatories.
HIS solicitor concurs, and will do the chasing for him.
Mainly specuvestor types I would surmise from the dates .
i’d imagine there is unspoken truce in place until after the holidays are out of the way, then the shit will really hit the fan.