Developer Bankrupt credit crunch bites hard

 We have heard strong rumours from our president with information from the administrator that our new development has the developer and the constructor going bust. Many of the owners have still got snagging issues and the development has major defects that the developer and constructor agreed they would rectify at a meeting with our president and administrator in December 2007.

An example of these defects are the whole residence should have been painted in waterproof paint which was in the contract, it was not. The residence is a large development and an approximate cost to do this painting work is in the region of 120000€.

Until there is an official announcement or something appears in the press or on the radio I think I may be on dodgy ground by naming them. They are a major developer with many off plan and nearly finished projects in Spain.

The developers name does not begin with the letter 'A'

As things stand today no calls or emails from the developer are being answered and the workman have gone from the development  where they were doing some of the snagging issues but not the structural defects and they have since left the site because of not being paid!

Also the developer has not paid 15000€ in community fees that is owing on the empty properties. The bank who holds the mortgages for the empty properties will, I assume, take possesion of these.

Our Spanish president, vice president and administrator have an appointment with a lawyer next week.

Help!!

• Who has to do the outstanding building defects? The bank? The 'Ten Year Guarantee?'
• Who is responsible for the oustanding community fees and future payments of the community charges on the empty apartments?
• Will the community be responsible and ultimately will everyone here be paying higher community charges?

Wait until you have more information to go on. If it is a large developer, they will have many assets and land you can go against, but you will need a much fuller picture before you can decide how to handle it.

The 10 year guarantees are usually insurance backed  in case the original builder folds or ceases trading but check with your lawyer this is the case.

The empty units comm fees are payable by the last owner so you as a community may need to absorb those if he cannot pay as if there is comm fees outsratnding then usually action is taken against the owner with the asset (property) embargioed and sold to clear the debts.