Can developers do this?!!

Johnnyhpipe

Hi,

Paid booking deposit on a new house which won't be ready until July. The contracts are with my solicitor and we are awaiting information/responses to contract queries from the developers solicitor.

Since I paid my deposit, all the houses in the development have gone up in price and now the developer wants to return deposits of people who have not signed.

So although I'm doing my best to try sign them, his solicitor wont respond thus preventing me from signing, now he wants to presumably sell the house to someone else for the increased price?! (And it's not just me - apparently everyone in the development who hasn't signed!!)

Is this even legal?! Of all the sly, underhand, sickening things to do to a first time buyer!! And on top of it all I'll still have to pay my solicitor!

davo10

Yes it is, until the contract is signed you have no binding agreement nor legal entitlement to the property at original price. Unfortunately this is what gives cash buyers an advantage, they are able to sign contracts quickly without having to wait months for banks to approve mortgages.

Victor

You have no contract.

Talk to them and find out what the situation is.

helimachoptor

And when the developer over extends himself and falls on his ass, all his assets worth anything will be in his wife's name while you op and the rest of us pick up the bill... Again

Johnnyhpipe

Mortgage is 100% approved for that particular house. The only reason its not signed is because the developers solicitor won't respond to my solicitor's queries.

F*cking celtic tiger greed is still alive and kicking in this kip!

Ray Palmer

helimachoptor wrote: »

And when the developer over extends himself and falls on his ass, all his assets worth anything will be in his wife's name while you op and the rest of us pick up the bill... Again

I really don't understand what you have said. The relevance to the topic seems odd:pac:

If anything it sounds like developer is making more money now so will be better off.

davo10

Johnnyhpipe wrote: »

Mortgage is 100% approved for that particular house. The only reason its not signed is because the developers solicitor won't respond to my solicitor's queries.

F*cking celtic tiger greed is still alive and kicking in this kip!

This isn't Celtic tiger greed, it's supply and demand, in certain parts of the country there are not enough homes for the amount of purchasers out there so price goes up as demand goes up, happens in every country. Would you sell your house for a euro less than the price you know someone is willing to pay for it?

MugMugs

I actually had to scroll back up to see if this was a 6 year old thread! Can't believe this is still happening!

gaius c

MugMugs wrote: »

I actually had to scroll back up to see if this was a 6 year old thread! Can't believe this is still happening!

Incredible really.

helimachoptor

Ray Palmer wrote: »

I really don't understand what you have said. The relevance to the topic seems odd:pac:

If anything it sounds like developer is making more money now so will be better off.

He is being greedy... the profit he makes wont go into substantially part financing his next loan application, he'll still go to the bank to get as much as possible and if it falls apart then the bank has to pick up the pieces.

davo10

helimachoptor wrote: »

He is being greedy.

What?. Developers are business people and their business is making profit. It's a poor business man/women who sells their product for less than it is worth in the marketplace.

Johnnyhpipe

davo10 wrote: »

What?. Developers are business people and their business is making profit. It's a poor business man/women who sells their product for less than it is worth in the marketplace.

Suppose you were selling jeans to me for 50 quid. I'm standing at the till with 50 in my hand, and before you take it from me you look out the window, see a queue forming and then tell me that the jeans are now €70. I'd call you a greedy ****, not a fantastic businessman.

What goes around comes around in any event. It's just unfortunate that these idiots have learned nothing over the past few years.

punisher5112

You have to agree though the fake bubble has started again.

davo10

Johnnyhpipe wrote: »

Suppose you were selling jeans to me for 50 quid. I'm standing at the till with 50 in my hand, and before you take it from me you look out the window, see a queue forming and then tell me that the jeans are now €70. I'd call you a greedy ****, not a fantastic businessman.
.

Buying a pair of jjeans is a different matter, I would be hoping for repeat business. Buying a house is a once off transaction. And if a seller can get almost 50% more, you can call them what you like, they won't care.

If you ever sell your house, the shoe will be on the other foot, you will want to sell for as much as possible, that's when it "comes around".

twowheelsonly

davo10 wrote: »

This isn't Celtic tiger greed, it's supply and demand, in certain parts of the country there are not enough homes for the amount of purchasers out there so price goes up as demand goes up, happens in every country. Would you sell your house for a euro less than the price you know someone is willing to pay for it?

Supply and demand my a**e..
Who do you think creates these 'shortage' of housing stories?? Bob the Builder and Eric the Estate Agent, that's who!!
It's greed pure and simple and it fuels more greed, exactly the same as happened the last time.
Obviously the initial price covered the costs and made the builder a nice profit. He decides he can make more so ups the price, leaving some customers in the lurch (that alone should tell you what kind of fella he is..). More people see this and jump on the bandwagon, including banks, suppliers, tradesmen and builders labourers that reckon they must be worth a grand a week. And so it begins...
Sound familiar?

davo10

Who created the shortage?. Most of the country is littered with empty houses, ghost estates and falling prices, the shortage is in Dublin where demand is highest and where there has been little building for 5 years. Now finance is beginning to become available and families want to buy houses, low supply, high demand = rise in prices. Simples.

tempnam

OP, you've already paid a deposit. Discuss the implication of this with your solicitor on whether it forms part of the contract.

davo10

tempnam wrote: »

OP, you've already paid a deposit. Discuss the implication of this with your solicitor on whether it forms part of the contract.

It doesn't, there is no contract between the parties for it to form a part of.

sydthebeat

According to Consumer help.ie When you pay a deposit you ever into a Contract with the supplier. A verbal contact is also enforceable.

I have seen situations towards the end of the Celtic tiger where developers took depositors to court to pay agreed inflated prices while values were falling. ... what was good going down should be good going up.

MouseTail

A deposit is not legally binding in either side in this case. Either side can back out without penalty. However I think there is legislation to stop the price increasing after contracts are signed, which is what was unfortunately common place in the bubble.

Roy_Keane16

@johnnyhpipe - I have been burned by the same developer. Loan offer ready to go & everything to proceed from our end. Booking deposit paid since June for a house that was to be built by spring 2014. We have been waiting on them to proceed but now the greedy developer has returned a list of deposits to all the affected purchasers solicitors. I think this issue will have to be spread to the wider public re the developer so that future buyers are aware. I have already seen a post removed that warned ppl of this developer 6 days ago. Make contact with me johnnyhpipe

caew

This is sickening, and if someone is a fantastic businessman for reneging on an agreement, legally binding or not, shows a lack of ethics in business. And it seems this lack of ethics is to be admired by some.

I remember this happening during the boom years and it is pure greed not savvy business in my book.

As mentioned before when those who had paid desposits on property that then declined in value, they were not allowed to renege on their agreement and were dragged through the courts.

Why is it one rule for these greedy, lack of morals property developers or fantastic business men as some view them and another rule for the normal working person trying to set up a home and is currently paying taxes to bail out the greedy developers who are free to start the circle of shame again.

I'm sorry this has happened OP, it is shameful.

helimachoptor

davo10 wrote: »

What?. Developers are business people and their business is making profit. It's a poor business man/women who sells their product for less than it is worth in the marketplace.

Ok theres no contract signed, but the developer is going to shaft the OP to make a few grand more.

On his next deal, he'll use the bare minimum of his own cash to get a boatload from the banks.. if things go tits up, do you think that any of the extra cash hes gotten in this deal will be used to pay back his debts?? no chance

Barely Hedged

sydthebeat wrote: »

According to Consumer help.ie When you pay a deposit you ever into a Contract with the supplier. A verbal contact is also enforceable.

I have seen situations towards the end of the Celtic tiger where developers took depositors to court to pay agreed inflated prices while values were falling. ... what was good going down should be good going up.

Im 99% sure that it does not form a verbal contract.

OP, pick up the phone, ring your your solicitor and ask him/her. They'll tell you yes or no

Barely Hedged

helimachoptor wrote: »

Ok theres no contract signed, but the developer is going to shaft the OP to make a few grand more.

On his next deal, he'll use the bare minimum of his own cash to get a boatload from the banks.. if things go tits up, do you think that any of the extra cash hes gotten in this deal will be used to pay back his debts?? no chance

Its a business transaction pure and simple. He's a business man - his job is to maximise his companys profits. Some people make it out to be such an emotive topic as if buying a house is an entitlement. Building and selling houses for the private sector is a business, not a charity.

If the situation was reversed and the OP was the seller and somebody offered more for their property i guarantee he'd strongly consider it and like most people accept a higher offer.

davo10

helimachoptor wrote: »

Ok theres no contract signed, but the developer is going to shaft the OP to make a few grand more.

On his next deal, he'll use the bare minimum of his own cash to get a boatload from the banks.. if things go tits up, do you think that any of the extra cash hes gotten in this deal will be used to pay back his debts?? no chance

About the only relevant point in this post is the one about there being no contract and that is the important point in relation to the OP's question, can the developer do this? The answer is yes, is it morally and ethically wrong? Probably. But remember, buyers offer well below market price, is this wrong?. Buyers often pull out and then come back with a lower offer , is this wrong?

As for your point about financing future deals, what business is that of yours how a deal is put together? . Banks are a lot more careful about lending now and if this developer did get finance recently , chances are he was not one of the bold boys during the boom..

helimachoptor

[QUOTE=davo10;88761231
As for your point about financing future deals, what business is that of yours how a deal is put together? . Banks are a lot more careful about lending now and if this developer did get finance recently , chances are he was not one of the bold boys during the boom..[/QUOTE]

Surely after what has happened the last number of years and that the Government is now the majority stakeholder in the banks it is my business, and yours and everyone elses.

Sorry i do realise we are going of topic, but if he is going back to the banks to arrange deals, I feel that in order to minimise risk to the tax payer developers should be fronting up a lot more cash than they previously would in the boom and given the fact they are now refunding deposits so they can maximise their profits surely they are in a position to commit more of their own cash to any future deals (imo which the banks should be insisting on to minimise their and tax payer exposure)

Agree on the above, it is a very emotive topic..

On your part ive highlighted in bold, the Priory Hall developed has been awarded the contract for the new kids hospital so people are still making idiotic decisions

TheDriver

Is this not gazumping and I thought it was made illegal few years back when it was rife.....

Is the builder part of the Home Protection Purchase Pledge

Ray Palmer

TheDriver wrote: »

Is this not gazumping and I thought it was made illegal few years back when it was rife.....

Is the builder part of the Home Protection Purchase Pledge

No it isn't gazumping nor illegal. Gazumping is done by another buyer when they bid more on the property after sale agreed. This is a case where the developer put up the price with no other seller involved.

MadsL

"My word is my bond" :rolleyes:

Johnnyhpipe

As an update - received deposit back today. Solicitor noted that this is unfortunately entirely legal and there's nothing we can do. The developer is simply a greedy <snip> and has renaged on the deals.