Breach of contract, developer suing purchaser

1sooty


Joined: 13/11/2009
Posts: 7

Message Posted:
13/11/2009 23:47

Anyone been to court over a breach of contract. Our developer wants a settlement of 55.000 Euros out of court, for an off plan property, from our first and only instalment of 70.000 Euros. We are unable to sell our property to fund it and move to Cyprus due to the decline in the housing market. We withdrew a year ago, but they have dragged it on.

No1Doyen


Joined: 04/07/2008
Posts: 16617

Message Posted:
13/11/2009 23:51

Do I understand this correctly. You paid the builder 70,000 Euros as a first instalment on an off plan property and then withdrew? The developer now wants another 50,000 Euros?



What for?

AlexF065


Joined: 07/09/2009
Posts: 271

Message Posted:
14/11/2009

Doyen

The developer is most likly trying his luck as he has not managed to sell the property on

and it more than likly trying to sue on the grounds that he would not have started the building ect ect

Turtle


Joined: 28/05/2007
Posts: 2669

Message Posted:
14/11/2009 00:04

If someone paid me 70 grand and said keep it you would'nt see my touche for dust

No1Doyen


Joined: 04/07/2008
Posts: 16617

Message Posted:
14/11/2009 00:05

Turtle. Thats what I can't get my head round.

Turtle


Joined: 28/05/2007
Posts: 2669

Message Posted:
14/11/2009 00:09

It is his first post and I suppose its Orams silly season again !!

elko2



Joined: 24/07/2007
Posts: 4400

Message Posted:
14/11/2009 09:03

Let me hazard a guess:

The Buyer paid 70,000 Euros, signed a contract and had it registered with the Land Registry. Later the Buyer changed his mind and wants his money back. The Developer wants to keep some of it which is well within his right. They cannot agree on a figure. The Developer wants to sell on but he cannot do so unless the registration is cancelled. Hence the Developer goes to court and wants a declaration from the court that the Buyer breached the contract, asks for compensation and an order to Land Registration to cancel the registration of the contract.

The Buyer wants to get away Scots free and get back all of 70,000 Euros before he cancels his registration, the Developer tries to get maximum compensation. The likely result is that with pressure from the court they will settle around 15,000 Euros compensation, hence 55,000 euros to be paid back but spread over a time.

How is that?

ismet

http://www.elkocyprus.com

1sooty


Joined: 13/11/2009
Posts: 7

Message Posted:
15/11/2009 14:09

Dear Ismet

The buyer does not want to get away Scot free. Iv said 50/50. The developer wants 40.000 Euros for advertising one off plan house on a complex and a further 50% of the 35,000 left over. We withdrew immediately following our first instalment so that they could sell it at an early stage. Bearing in mind this was a year ago. We have no choice as we ca not sell the house in England to move to Cyprus.

Bit confused about your comment, hence 55,000 to be spread over time, in whose favour please?

1sooty


Joined: 13/11/2009
Posts: 7

Message Posted:
15/11/2009 14:10

Sorry, the builder wants to retain 55,000 of the first instalment. 40,000 for advertising and marketing and a further 50% of the 30,000 that is left over. We have offered 50% of the lot but will go to court to let a judge decide. We appreciate we have broken the contract but how do they justify this amount.

elko2



Joined: 24/07/2007
Posts: 4400

Message Posted:
15/11/2009 14:16

1soothy,

Thanks for the clarification, it is exactly as I expected. Make sure that your contract is not deregistered at the Land Registry. Let the Vendor go to court. The court will not grant them so much compensation, not even a fractrion of what they are demanding. No way. I suspect some foul play from your lawyer if he is advising you otherwise.

ismet

wanderer


Joined: 05/02/2009
Posts: 1653

Message Posted:
15/11/2009 14:43

1soothy

In the Uk there has been many examples of young professionals lawyers solicitors and accountants jumping on the property bubble in London in 2006/7 putting deposits down on £300k flats in the hope that they inflated to £450k when built the only problem being that the builds came in on time The professionals who put the £40k deposits now cannot get mortgages as the property will not reach valuation for a mortgage showing £100k black holes

http://www.thisislondon.co.uk/standard/article-23660640-buyers-face-bankruptcy-in-off-plan-timebomb.do



The developers are suing on the basis of an agreed sale that they have delivered at the price agreed

It's the buyer who is at fault and what's worse is that in the professions that they are in they loose their qualification if they go personally bankrupt

1sooty


Joined: 13/11/2009
Posts: 7

Message Posted:
15/11/2009 14:57

elko2

Just to clarify your point, is it better to let the vendor take us to court, rather than us take them, to resolve the dispute and why please?

elko2



Joined: 24/07/2007
Posts: 4400

Message Posted:
15/11/2009 15:53

1sooty,

For a moment I overlooked the fact that the developer has your 70,000 Euros. I am afraid you will have to take him to court for your money back, unless he already has a potential buyer and wants to get on with it. Do you know if there is an mortgage on the land? If so you can claim that he broke the contract and you ask for your money back plus compensation plus the interest. There is no point in waiting for the developer to pay you. They are all skint at the moment. I do not know who your lawyer is but I hope he/she is not one of those "copy and paste" conveyancing lawyers.

ismet

malsancak


Joined: 23/08/2009
Posts: 2874

Message Posted:
15/11/2009 16:17

Ismet wrote "Do you know if there is an mortgage on the land? If so you can claim that he broke the contract and you ask for your money back plus compensation plus the interest."

Now that is an interesting fact seeing as so many people are in that situation! But of course it would be a waste of time unless he has the unmortgaged assets to pay the compensation and as you say builders "are all skint at the moment."

walkerscott


Joined: 13/08/2009
Posts: 901

Message Posted:
15/11/2009 16:40

Ismet,



You are absolutely rıght and as the newspaper report poınts out, the off-plan market was rampant in 2006 and 2007, with many greedy people seeing it as an easy way to profit on the backs of others, often flıppıng over propertıes very quıckly. But buyers, maınly from the UK, have been hit as their UK property values slumped by up to 30 per cent. Thıs slump also affected property values ın Cyprus whether anyone wıshes to acknowledge that or not, ıt has! 18 months ago vırtually anyone could borrow agaınst UK assets ıf the equıty was there, to use overseas but that avenue has now been closed.



So as many already know, the "off-plan timebomb" has already started to go off. It's a nightmare because ıt wıll not only affect developers who are half way through theır buılds and dependent on cash flow but also the ınnocent ındıvıduals and theır famılıe

AlexF065


Joined: 07/09/2009
Posts: 271

Message Posted:
15/11/2009 16:50

Yes definatly right about the London property boom wanderer

Many flats at the Highbury sq development were sold "off plan" to these young folk at 350K and more now they are ready for sale the off plan buyers cant get the mortgages to cover the cost as the valuation as you say has dropped and they will not value up to the 350K valuation at the time of the contract

malsancak


Joined: 23/08/2009
Posts: 2874

Message Posted:
15/11/2009 17:16

What happened to "safe as houses" eh?

fiendishpaul


Joined: 18/05/2008
Posts: 1720

Message Posted:
16/11/2009 09:25

Malsancak



I think in the UK, safe as houses is still as relevant today as it has always been. The ups and downs of house prices is cyclical. Hang on to your property and eventually you will see prices rise. It's a marathon not a sprint !!



Paul

girne


Joined: 14/01/2009
Posts: 438

Message Posted:
16/11/2009 14:57

are we talking euros? As l have not seen any construction companys advertising in euros and are we talking North Cyprus?

1sooty


Joined: 13/11/2009
Posts: 7

Message Posted:
16/11/2009 18:13

this is South Cyprus and we bought the property in Cyprus pounds but the cost has been converted to Euros.

1sooty


Joined: 13/11/2009
Posts: 7

Message Posted:
16/11/2009 18:40

Anyone know what the court costs might be in Cyprus. We havn't got any savings and cant get legal aid in Cyprus so will have to get a loan.

Brinsley


Joined: 04/04/2009
Posts: 6858

Message Posted:
16/11/2009 18:59

1sooty



I'm at a loss here. Are you saying (Msg 20) that your problems are on the South side (Greek)? If so, why on earth are you asking for help/advice on a North Cyprus Forum?



Richard

1sooty


Joined: 13/11/2009
Posts: 7

Message Posted:
16/11/2009 19:41

Arnt the rules similar then?