The restore action

Legal tip 138. The restore action
11 September 2009 @ 10:24

 

If you are in the middle of an off-plan contract cancellation action or are thinking of claiming.

There are many things to be done depending on how the finantial/economic situation developer in the comiong months.

First thing to bear in mind is that this is going to be a buyers market for many years ahead, and with that no-pressure by sellers and buyers running the show....

-You can buy with good price and excellent interest rates

-You can rent with an option to purchase, with a fixed price in advance.

-If you are pursuing cancellation ( action that can also be called: "restore action" as it put balance in the contract after an abusive contrat") You have got several  finantial assets:

-A potential credit against a developer for the refund of x plus legal interests.

- Buying rights on the property in between ( the developer cannot sell to anyone else till the contract is effectively cancelled and your money refunded).

- A better position within the creditor´s meeting ( if that ever happened)

So... it is not just a matter of contract cancellation at whatever cost, it is a matter of re-establishment. Many of the clauses of many of the contracts I have seen duting the last 3 years and a half are corrosively abusive. Repugnant.

I am enlisting some of the games you can play with the above mentioned assets at hand ( but I am not a finances expert.... so please, make your conmtributions! ):

- You can negotiate a great price reduction with the developer along the judicial proceeding and complete on the property at a much reduced price and with much reduced interest rates

- You can sell your buying rights to someone else and withdraw  the claim,  negotiate with both developer and new buyer on the payment of the judicial costs ( it seems German and Norwegian have already some money to look for some sun).

It is all a matter of some fluctuants, not rigid factors such as:

- Evolution of the market

- Flexibility of developer

but the possibilities are there ( together with many other ones, I am sure)

that.... together with the awesome sensation of being back in control of the situation or at least of a great deal of it. What do you think?

Could we all together transform the current situation in a win-win scheme?

Please send your ideas and have a great weekend.

Maria

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Maria, I know you have been thanked many times by many EOS contributors, but I must say that your continuing input into EOS is outstanding.      Your post below gives food for thought.

Re. off plan purchasers, would be owners of a development have recently received"very threatening" letters from a debt collecting firm. They have been told that unless they complete soon the developer will sue them. This development has no LFO and is illegal.  Only a small percentage have completed.   These people put deposits down during 2003. It should have been finished with LFO in place in 2005. Now the selling value, according to a local REA, is less than half the purchase price , although technically they are unsaleable without the LFO.   A Court case/s  has/have been won in the High Court against this development. The developers are saying there is an LFO  by way of Adminisrative Silence, which I know is inadmissable when a development/building is deemed illegal.

I do not think in this case the developers would re-negotiate prices.  I'm afraid I just cannot see that ,in the majority of cases, your idea of "selling on" the contract and it's implications can work.  Who wants to buy a legal problem/nightmare?  It all leads to good discussion though.

Thanks to you all again.

Please have comments below in bold green ( same text as your email):

Maria, I know you have been thanked many times by many EOS contributors, but I must say that your continuing input into EOS is outstanding.      Your post below gives food for thought.

Re. off plan purchasers, would be owners of a development have recently received"very threatening" letters from a debt collecting firm. They have been told that unless they complete soon the developer will sue them. This development has no LFO and is illegal.  Only a small percentage have completed.   These people put deposits down during 2003. It should have been finished with LFO in place in 2005. Now the selling value, according to a local REA, is less than half the purchase price , although technically they are unsaleable without the LFO.   A Court case/s  has/have been won in the High Court against this development. The developers are saying there is an LFO  by way of Adminisrative Silence, which I know is inadmissable when a development/building is deemed illegal.

I do not think in this case the developers would re-negotiate prices.  I'm afraid I just cannot see that ,in the majority of cases, your idea of "selling on" the contract and it's implications can work.  Who wants to buy a legal problem/nightmare?  It all leads to good discussion though.

Well, of course I would never encourage to try to sell a contract of a property without a FOL. I am thinking of those which claim for delay before the FOL was granted, those who are claiming on lack of advertised facilities, lack of m2, lack of quality....

Maria, my thanks too for all your input to EOS but on this aspect I am confused by your suggestion.

Are you suggesting that the client should complete on a property (albeit at a reduced price from the developer who has breached the contract) and accept a product that they never intended to buy i.e. a property with quality issues at stake, a product without those features advertised from the outset, a product that is smaller than originally expected? It's as though consumers are having to pick up the tab for developers' substandard build. Surely this alternative is not a protection of consumers' rights?

Don't you consider this a compromise too far? The only winner in this scenario is the developer not the client. He will still be receiving monies (albeit reduced from the original contract price) but presumably financially equivalent to the substandard product he has delivered and not what was originally intended. I just don't see how this could possibly be considered a win win situation. Would you purchase a substandard product that you never intended to buy from the outset? I certainly wouldn't.

This message was last edited by ads on 15/09/2009.

This message was last edited by ads on 15/09/2009.

Dear Ads;

Thanks for your email and your questions.

The price reduction will also have to contemplate those lacks  and the subtandard status of the product of course!

I can see both developers, original buyers sellingand new buyers purchasing in the scenario.

Best,

Maria