Can I legally be forced to complete?

Hi there

My apartment is complete although my company has gone into administration. I am not a creditor - I suppose I am debtor really , I saw no bank guarantee but the company did not meet its agreed obligations. In effect I have lost 60k euros in deposits. I still want a place - because of price reduction I can afford a resale. Can the company chase after me and ask me to complete? At wordt can I just walk away and forget about my deposits? Reason I don't want to complete is that the apartment and community is very poor quality - not completed as agreed - they were getting into trouble by the time they got round to my place.

CS

Have you looked into the possibility of asking for the return of your deposit, according to Law? Have they already asked you to complete, formally?

Best regards,

Maria

Hi

Yes my solicitor is working on trying to cancel the contract and no I have not been formally asked to complete. All we got was one phone saying our apartment was ready just before the company went into administration. We have never had a letter.

If your solicitor  sent  the cancellation of your contract to develoeper  before the approval for creditor´s meeting, your solicitor will be able to ask for your credit not to be under the rules of the creditor´s meeting.

If the developer was already in breach of contract ( regarding dates for instance) when the creditor´s meeting was approved, you can also fight to obtain a classification out of the meeting´s credits.

If the developer was not in breach of contract when the creditor´s meeting was approved, he could ask you to complete. You can oppose lack of finances is that is your case.

Is it too much to digest? My apologies... 

Thanks for the information Maria. You are right - it is a lot to take in but very helpful to know the facts.

We did not cancel the contract before the company went into administration but we tried for over a year  beforehand to get the property exchanged for a different one on another development.

The apartment should have been ready much earlier and in fact electricity was not connected until after the company went into administration. I could never find a completion date on our contract but we had a verbal date.

With regard to finance - do you mean we could argue we don't have the money? At the present time we do have the money but we want to buy a resale now. It could be years before this all gets sorted and I still want to buy somewhere in Spain. I am just worried I might have to pay for a second home! I certainly cannot afford that.

Hi CS.

Sorry to hear of your plight!

I am sure that Maria would agree that the Purchase Contract is important here, as well as past written communication, to determine whether the developer is in default of the terms.

Also you mention that no Bank Guarantees were provided; were these requested either by yourself and/or your own solicitor, before or after signing the contract? The timing of the request for the Bank Guarantees is irrelevant really as it is potential a breach in Law if not provided.

And, as an aside from that, how did you find the solicitor acting for you i.e. were they referred by an estate agent or the developer themselves? Are they truly 'independent' and representing you alone in this?

You are right in that this is going to take a considerable while to sort. You will, in the interim, want to press on to look for a resale property. If you do, though, you are likely still to have a concern as to whether this (2nd) property is going to be compromised because of Property 1). Therefore, I suggest you must consider the use of a mortgage and do not invest any more of your own funds that is absolutely necessary. The fact that the lender will then have the primary right to that property will alleviate any potential threat from any claim arising from the fisrt property. Albeit that I think this extremely unlikely!

CS: Regarding your statement: Please have comments below in bold green:

We did not cancel the contract before the company went into administration but we tried for over a year beforehand to get the property exchanged for a different one on another development.  What were the reasons for the change? Do you have written evidence of that?

If the change was because they breached a  contract, that can be used in your favour for a good classification of the credit, or even to consider it a regulat credit outside the creditor´s meeting rules.

What were the reasons for the change? Do you have written evidence of that?

 A            The quality of the apartment surroundings was not as we were led to believe it would be. Substandard materials contrary to the agreement were used. We contacted the builder by email and by telephone - also our solicitor to tell them we were not happy. Twice we met with the builder to be shown alternative properties but they never sorted it for us in spite of nagging. So I suppose we don't have written formal evidence but I have plenty of photographic evidence of the poor quality and emails showing how the whole of the people who bought there tried to get some action. There were many promises made by Fadesa to improve the communal areas but then they went into administration.

A           I have never seen a bank guarantee but the solicitor said we had one - I have this on an email. However when I have asked to see it it has not been forthcoming.

A         The solicitor was suggested by the agent - I know now I should have delayed and explored my own. We have stayed with him for practical reasons.

A         If we were to go for a mortgage we would still need to put down a massive deposit would we not? So we would be putting more of our money at risk anyway.

Hi CS.

1) I will let Maria respond to this, but it seems to me that you may have a valid claim re a breach of contract.

2) Bank Guarantees. A major issue this and Maria will confirm that a) there is a potential breach in law here and also b) the solicitor acting for you should have done more to protect you and ensure these were in place. The solicitors have left themselves open to an action by you in not doing so!

3) No comment really. I know it's easier said in hindsight but ....! It doesn't stop you moving now especially bearing in mind the comments made above re a possible action against them. Again, Maria may comment herself.

4) Mortgage. Sure you will have to inject an element of your own monies but, as you can still obtain finance to 70% Loan To Value, this will be far more limited than you buying for cash! And, if you find a 'deal' where the price is less than the value (discount, distressed sale, repossession) then you can borrow up to 90% of the contract price. So not a 'massive' amount from you at all!

Hope that helps!

Thanks for help to both you Rose FP and Maria.

I think I have a few options:

1. Get a second opinion - I have emailled a couple of solicitors to ask what they would charge to review our position - but I would need to get everything from the solicitor.

2. Press once again for an exchange - I have tried for over 18months to try and exchange our poor apartment for one of the empty townhouses - loads of these have been repossessed by the bank and are now on offer at a very reasonable price. For the life of me I cannot understand why they would not exchange in the first place. All our requests have been ignored.

3. Perhaps think about your suggestion of getting a mortgage but if companies can chase after your UK property as well this seems no good.

I would advise you to do option 2 through a new good independent solicitor.

I agree with Maria in that the time has probably come for you to look at an alternative and truly independent solicitor and press for an alterntive property. As you say, there are plenty of deals out there now!

And, as to your fear that you will be potentially chased for monies, i doubt that very, very much and certainly not to the UK.

Best of luck!

When a mortgage comes impossible to be paid, my best advise is always to voluntarily give keys back to the Bank and not to wait for a repossession procedure. 

Maria.

CS is referring to being chased by the developer in relation to the first property he is having problems with and is now contemplating withdrawing from. Not any mortgage that he may or may not take for the second property.

Just to clarify as potentially confusing.

Thanks Rose FP.

Regarding that property he put a deposit in,  if he finally decides to withdraw he needs to dennounce the breach of contract formally ( by burofax) adding the written evidences of the claims he has been making so far. He also needs to deffend his credit within the creditor´s meeting.

Best Tuesday!

Maria

CS

See Maria's last post.

To do that it seems to me that you really need to consider a truly independent solictor!

Thanks Maria and Rose FP for all your help. Main reason for trying to get this sorted was to buy a place - had seen a resale - bank repossession - I think a good buy. Did not want to find ourselves with two places. Not an issue right now as just been told by the agent that the bank have raised the price! Can you believe it? It had only just gone on the market at their suggested price and we were happy to pay the full price. Perhaps I should give it all a miss!

CS

sadly can beleive it! what area is your current "purchase " in