Breach Of Contract-Asking For A Discount?

Hi

Just wondered if someone could offer me some advice? The Cedula is now in place on an apartment that should have been completed in December 2008. This apartment is in the nothern Costa Blanca.

This is where I'm at.

I agreed a contract/price based on completion of the whole site at end of 2008. At that time the GBP/Euro rate was approx 1/1.3 and attractive mortgage deals were available. If the builder had completed on time then I would have easily been able to proceed.  It became clear that construction would not be finished on any of the buildings at my end of the site until end 2009 and indeed Cedula would not be in place by this time and now the market conditions are completely different and availability of money is much more difficult. They are offering new buyers noteworthy discounts. 

I have asked for a discount using the above and they just sent me a very short email saying we signed a contract and it is not possible for a discount.

Just wondered what other people's thoughts are on what I should do? I don't want to back out and I have put a substantial deposit down.

Many thanks in advance.

 

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Should be one for MikeT

Regards

Norman

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If I were you, I would do this:

1. Find a good lawyer and communicate to them in writing that you believe they are in breach of the contract for not having fulfilled the obligation to complete by the date stipulated in the contract. Tell them you will never complete because you consider that contract null and void due to this breach on their part. You will have to comply with the wording of the contract to denounce it that is why this should be worded by your lawyer. This communication should state also that you are demanding a return of your deposit plus any installments paid and will initiate legal action to claim these funds if they are not refunded within say 15 days.

2. Once they realize your determination not to complete under the contract and your willingness to bring legal action against them for a refund of moneys paid, they will be more open to renegotiate a substantial reduction in price. They will realize that it is better to sell you the property at a reduced price than to go into lengthy legal proceedings that could end against them because they have really breachednthe contract.

In summary if you really want to buy the property, you have the frying pan by the handle like the Spanish saying goes. Make good use of your
strong position. They need a purchaser badly or they will be stuck with the property for years.

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 Verona:

Of course you are entitled to a discount! The only problem is that if they do not agree out of courts, you will have to go through a judicial procedure after completing on the house

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Dear Maria,

this is sounding rather like Techno's assertions.

complete on a property that is not what was promised and then sue later.

it is to me against natural justice.

if there is no very substantial (close to 100%) delivery of the contract then there should be no completion.

completing on a contract that has not been fulfilled is a basic nonsense surely?

Regards

Norman

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 Dear Norman:

I may have express my self too briefly:

If Verona really wants the house and the developers do not want to reduce the price, she can complete and then ask for the refund due to delay  through Courts.

She can always wait, but then she will not have, obviously access to the house and developers can cancel the contract: in that case she will have rights for the refund of 95% of money paid.

As an answer to ge given to developers on the force of contracts, an answer based on Contract law as defaults brings compensation to the counterparty. 

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Maria if there is completion, Verona will have to go through years of delays until a final judgment is awarded with no guarantee of a favorable outcome and also having to advance even more money for costs.

I really believe that if Verona is interested in buying this property it much more practical to try to force a renegotiatiion of the purchase price by scaring the developer into believing that a buyer will not complete and is willing to take him to court for breach of contract to get a refund of deposits made.

The developer is not going to find a new buyer for a very long time and the intelligent thing for them to do is to accept a renegotiation and complete at a reduced price in a more shorter time frame. It is not in their best interest to get into a long law suit before selling the unit if Verona makes a reasonable offer at today's market prices.

Verona needs, however, to assure them he will not complete now and bring court action to obtain a refund of deposits paid and after this is started, offer to complete at whatever price he thinks is currently reasonable.

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Thank you so much everyone for the advise, I really appreciate  it.

I have instructed my lawyer to ask for the deposit back, telling them I wont complete because of breach of contract. I'll see how the respond to that. Hopefully they'll offer a discount, if not, I will ask for my deposit back and buy something else instead.

The developers probably thought I was was bluffing before.

Keep the responses coming if you whish.

 

Cheers, Verona.

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Verona, please keep us posted on how it turns out. As a matter of interest did you put the developer on notice when he first failed to meet the delivery date? Presumably at some time you told him that his being in breach of contract was going to cause you problems and that you would expect to be compensated. What is the proportion of deposit to purchase price? I think there is zero chance of him giving you your deposit back. On the other hand he may give you a discount if he sees this as being the only way to get the balance and move on. But he may argue that you went along with the slipped delivery date and only want out now because of the collapse in prices and devaluation of sterling. If he wins that argument - and I think I have seen Maria write that judges are sympathetic to this line of reasoning - you would be found in default and ordered to complete - or else forfeit your deposit and  pay the developer the difference between what you contracted to pay and what he eventually flogged it for..

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You signed a contract and are contracted to the sum. I understand properties can be delivered some 18 months late without any redress. I suggest you complete, if not the developer can chase their money through Bristish court collecting their debt. Even put a charge on British properties until debt is paid. In the press and EOS a couple or so months ago.

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 That of 18 months... you may have seen Judges that till 18 months´delay happen the contract cannot be cancelled: which is also against Law 57/68

Nut according to reciprocity and balance of contracts once a delay ( even of one day) the other side has always rights to compensation.

The obstacle is having the developer acknowledging this. THis is where everyone can choose his onw strategy... always putting rights under safeguard.

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