Corvera Solicitors letter received - Breach of Contract

Right whos next!!!!!!!!!!!!!

No matter what the difference of opions are we are all guilty of having done the same thing. ...Signing  open ended contracts.

Hi Shudi ,

You are of course correct , we all did sign open ended contracts,

But  the saving grace is that sought of Contract where it favours one party over the other ( in this case the Developer over the purchaser is  no longer valid and  is illegal )

Spain has very strong consumer Laws the problem is how it gets interpreted by the  Judges

Time will tell . lets all hope its done with minimal damage to all concerned

Your'e quite right Jored,  Spain appears to have very good consumer laws on fair contracts, how publicity forms part of that contract and how bank guarantees should protect the purchaser. Unfortunately some might alledgedly say that some local judges appear to be  only interested in protecting the rights of the developers (and big institutions), and that's why the case may have to go beyond the local courts ( not me of course, I think they're wonderful).

kev

a thought on aec post

assuming spanish property starts to rise immediatly with no more falls ( unlikely i know ) and assuming a rate of 5 % per annum it would take  13 YEARS  to get back to your original purchase price let alone be in posative territory , a lot longer if you take into account wear and tear and agents selling fees .

what price would these units have to be to become attractive to an investor or lifestyle buyer ?  we know the rents are 450 p/c/m  = 5400 p/a less community fees 1200 nett 4200 p/a , lets assume an investor is looking for an 8 % return that puts a realistic purchase price at 53000 !!! what would a lifestyler pay ?? 

i have tried to base the figures on factual rentals actually being achieved , i appreciate that holiday lets would be significantly different , i have not included any agents fees or commission for managing the property neither have i included wear and tear .

at the end of the day this market was investor driven will it be brought back to life by lifestyle buyers ??  who knows  , of course all could change if facalaties are delivered and murcia becomes the golfers european destination of choice .

without the investors and lifestyle buyer it is worth remembering that murcia is one of the poorest regions of spain with comparativly few highly paid jobs ..... so where are the buyers going to come from at current price levels , or indeed renters ??.  

Good and well thought out post Searay

These sort of scenarios should have been thought of  before agreeing to purchase at Corvera.

Perhaps,  just perhaps everyone is to blame to a certain extent?

M.

mmepani

quite agree everyone should take responsability for ther own actions ............. the question however arises did they make those decisions based on misleading information supplied at time of sale ????    calidona should also take responsability for there actions in supplying the marketing literature on which a lot of peoples decisions were based .

Excellent point Searay, I know very little about Spanish taxes, but if I recall correctly, in Spain they base their tax on turnover, regardless of costs, so even if you are running at a massive loss you will still have to pay taxes on your rental income, 24% comes to mind for some reason. Also aren't there other taxes and costs to consider Wealth tax, local income tax? if this is true then the picture unfortunately becomes even less appealing.

It is certainly true that the rental situation is poor accross the whole of Spain and this can not be blamed on Calidona, but if we had the top notch 5* resort we were promised with all the facilities etc that were promised, our chances at generating a reasonable rental income would have been much greater.

kev

hi kev

im sure your right i didnt know the tax situation so left it out  alltogether .

i would still be interested to know what a lifestyler would be prepared to pay ...... anyone going to put a figure on it ?? 

actually kev just had an after thought , the 53000 for an 8% return would be inclusive of iva .... this is getting to depressing for a friday afternoon im going for a beer !! .... at least ive got a choice of venues within walking distance !!
 

Searay,

without the investors and lifestyle buyer it is worth remembering that murcia is one of the poorest regions of spain with comparativly few highly paid jobs

It was poor when we had make our decisions to purchase, so that is a moot point.

A lifestyler would not be going in to that much detail in calculating returns when purchasing - they would be thinking of sun, sea, pina coladas etc...Now, if you were an investor then yes these thoughts should have been going through your head  at the time of purchase.

M.

mmepani

there is only one point to consider and that is where are buyers and renters going to come from and at what price level , i have given an indication of an investor price point  ,  what is a lifestyler prepared to pay .

my point about the region was that locals cannot buy at these price levels , not wheather it was an investment decision , so back to the question where are buyers and renters going to come from ?

Hi Searay, the answer is nowhere. 

That's the reason why Calidona are not prepared to even partially return any of the deposit monies as they know they will be unable to convince anyone else with their bulls88t and sell the units on.  If they don't have any faith in their product why should we?

No one will buy this crap from them now or in the future.

Corvera village is a backwater and Corvera Golf is a ghost town.  For those who have completed I wish you all the hapiness and sincerely hope that things work out for you.  However IMO the writing has been on the wall for years with Calidona and they have just proven themselves to be untrustworthy.

IMO the only glimmer of hope for this resort now is the new airport but even then as it presently stands, Corvera will be overlooked by any discerning golfer or tourist.  Its ironic that most residences protest about the building of a new airport or runways in close proximity!

Searay,

there is only one point to consider and that is where are buyers and renters going to come from and at what price level , i have given an indication of an investor price point  ,  what is a lifestyler prepared to pay .

Don't know, I was not thinking about returns when I bought, still not.

Perhaps a more savvy investor can answer when they made their decision back in 2005-2006? Searay, makes a good point, given that the region was poor in 2005-2006 (and, you are right, it still is), where were buyers and renters going to come from?

M.

hi mr unhappy

i fear you are right .

ITS QUITE SAD THAT SOME PEOPLE HAVE TO RESORT TO BEATING PEOPLE DOWN TO TRY AND MAKE A POINT SOME OF YOU SHOULD BE ASHAMED OF YOURSELVES.

I DONT NORMALY SEE THE NEED TO POST BUT ON THIS OCCASION I FELT IT NEEDED TO BE SAID.

LES

Well said Les. Couldn't agree more! (Though you might be beating some people down to make your point).

mmepani

Just for the record I am not to blame to any extent. You can take your own decision.

'Two parties strike up a deal. One holds up their end, the other doesn't. Both are to blame.'

Sorry my curiously monikered friend, but this doesn't pass for logic even in my neck of the woods. Maybe I should stop living in the woods?

This message was last edited by jdy on 05/02/2010.

This message was last edited by jdy on 05/02/2010.

This message was last edited by jdy on 05/02/2010.

 mmepani "A lifestyler would not be going in to that much detail in calculating returns when purchasing - they would be thinking of sun, sea, pina coladas etc.."

As well as sun,sea and pina coladas were lifestylers also thinking about bars,restaurants,equestrian centres,5*hotels,sports facilities,medical and business centre and of course a PGA golf course???  I think they were dont you?

I think a lot of "savvy" investors and lifestylers came to the conclusion in 2005-06 that if we were going to get a 5* premium resort then it was indeed going to be both a great investment and a great place to live. Which is why we are now all on here bitching and moaning that what we paid for hasnt been delivered irrespective of GFC/Euro blah blah blah!

Believe it or not we are all on the same side, it just doesnt feel like it sometimes!

regards

Dave

Hello Dave,

As well as sun,sea and pina coladas were lifestylers also thinking about bars,restaurants,equestrian centres,5*hotels,sports facilities,medical and business centre and of course a PGA golf course???  I think they were dont you?

Yes, you are right that is definitely what I was thinking, most definitely not the returns as someone was asking.

Believe it or not we are all on the same side, it just doesnt feel like it sometimes!

So why all this angst? I agree we all in the same boat and it does not seem like it at times.  The crux of the issue is that some people have chosen to believe that Calidona will deliver, eventually (stop sniggering). Whereas others have chosen  they will not based on their previous history. That is the major difference between the completers and non-completers.  It is simple as that - I respect opposing factions views it is just as valid, in their opinion, as mine. However, I have no sympathy whatsoever with those who were looking to flip (make a fast buck), had 2 or more apartments and as a consequence are highly geared.

These are just my opinions. Happy to debate - lets keep it civilised.

M.

Hi mmepani

Just to let you know that I bought 2 properties through mainly  mortgaging my house and my life savings. I was hoping to invest the money so as to make some money to secure my families future, so I purchased in Corvera believing their BS ( stupid mistake number one, believing Corvera). I don’t believe they ever had any intention of completing the resort in a reasonable timeframe regardless of economic climate. I was also taken to a rental company by my agent and they assured me that I would get £600 per week for one apartment, boy I must have been taking handfulls of stupid pills that day ( stupid mistake 2, believing anything the agent or their associates said).  If I could have made some money flipping one, so what? isn’t that the point of investing? there was no intention of hurting anyone else.

Clearly, evil greedy people like myself who mortgaged their property and put their savings into a development like Corvera should lose our money, and quite possibly our homes as well. It was my understanding at the time that my liabilities would be limited to the deposit, I listened to my lawyer at the time (stupid mistake number 3 - believing your lawyer).

I'm not complaining because economic circumstances have changed for the worse, I've made gains and losses before, if I got what I contracted for in good faith I would not be taking Corvera to court,  I would take it on the chin and move on, but this is not the case. It would seem pointless to go into the arguments again.

Clearly we are all on the same side as you have said, unless of course you saw Corvera as an investment opportunity and then you deserve everything you get.

I am not trying to be petty here and would welcome anyone to clarify, but far as  I’m aware, (although I’m no expert), your gearing is calculated from one over the fraction you own, ie if you own a third of the property your gearing is 3 to 1, a fifth of the property 5 to 1, if you own 5% there is a gearing of 20 to 1 etc . As we all own the same percentage ie 30 % we all have the same gearing 3.33 to 1, and that this is irrespective of the number of properties purchased. High gearing is great when prices are going up. If you have a 5% investment ( gearing 20 to 1) and the value of your property goes up 5%, you make 100% on your investment (ignoring other costs), likewise if the value goes down 5% you’re wiped out, ie disastrous. We purchased 30%, a very healthy proportion under ‘normal’ circumstances.

kev

Hello Kev2,

Thanks Kev for sharing us your thoughts when purchasing at Corvera. Quite clearly, you were doing what was right given the information presented to you - we all were and I sympathise to a certain with your predicament.

Investing is a tricky business, some you win some you lose (goodness know how many I've lost through stocks and shares). Hopefully, my current venture that I have invested in will pay off.

Good luck to all.

M.