Do we owe builder any money?

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This topic contains 8 replies, has 4 voices, and was last updated by Profile photo of Anonymous Anonymous 9 years, 8 months ago.

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  • #52779
    Profile photo of Anonymous
    Anonymous
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    My sister and I reside in the US. We agreed telephonically to purchase an off-plan apartment in Lugo. The builder informed us that at the signature of the contract we had to deposit 6,000 euros, 10% of the price of the property. A week later he faxed the contract and it not only required the deposit of the 10% but additional amounts every month, leaving a balance of 12,000 euros payables at closing. We contacted the builder immediately and cancelled the purchase. Two weeks later he sent a letter requesting almost 2000 euros for his expenses (?) and when we refused to pay , he threatened us with a lawyer. Are we obligated to pay anything to this person when we cancelled the purchase within 24 hours of the receipt of the contract? We never signed any papers, everything was by phone. He never provided us with information regarding his finances or whether the property was really his. We have no information on him whatsoever and our references came from a mutual friend who vouched for him. Your advice will be very appreciated.

  • #70660
    Profile photo of Anonymous
    Anonymous
    Participant

    If you have explained your situation correctly, nothing signed, you owe him nothing and he cannot claim 2000 euros under no concept.

  • #70677
    Profile photo of Anonymous
    Anonymous
    Participant

    However he is clearly trying to use pressure and bully tactics on you in the hope that as a foreigner you know no different. Also it sounds like you had a lucky escape as such practices (of demanding stage payments) and the follow on tactics show that he is desperate for money from any source.

    Personally I would tell him to go get his best lawyer on the case, or better still get a good lawyer to draft a counter claim and scare the s*&t out of him.

    Vince

  • #70686
    Profile photo of Anonymous
    Anonymous
    Participant

    Surely the builder is entitled to the stage payments during the construction period.

    Generally, it was 10% at contract and another 20% over the build period and 70% mortgage at completion/handing over the keys.

    Depending on the market some builders have also asked for 30% at the signing of the contract

  • #70688
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi Shakeel

    A one off payment is fine (upto 30% is the norm) but staged payments should be avoided at all costs. For a start you cannot get a mortgage on these payments and you have the old run around trying to get bank guarantees for it. Also it means the developer has no risk whatsoever – so isn’t really bothered whether he finishes on time or not – by the time he gets to the roof line he will have made all of his money

  • #70692
    Profile photo of Anonymous
    Anonymous
    Participant

    vbtudor,
    I agree fully with your postings.I certainly would not pay all the monies at stage payments in Spain ( In France its normal ) On the mortgage front are you saying having paid for it say cash and later obtain a mortgage
    (Equity withdraw or perhaps a cheaper and more suitable mortgage prodcut ) is not possible.

    I feel that thanks to Banco Halifax etc who have come with more inovative products that some other Spanish Banks are now following them and re-mortgaging is now availible the only thing to consider is the cost of keeping the civil servent fed and the bloody notario sweet.

    Sorry about the “bloody” as I do not dislike anybody more this profession. I even like the tax man

  • #70693
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi Shakeel

    No it is of course possible to get a mortgage after the event if you have paid cash but you cannot get a mortgage on a new build until it is complete – I even believe they now wont give a mortgage on a house that doesnt have an LFO

    As for France – Dont know the market at all but I cant imagine it is as corrupt as Spain so there are probably better safeguards in place

    Vince

  • #70697
    Profile photo of Anonymous
    Anonymous
    Participant

    Thank you all for your replies. We agree that 30%, or whatever is legal in Spain, is acceptable. But not 82% as this man wanted. Especially since he had not given us any guarantees or information on his finances. We only saw a hole in the ground, which he supposedly owned, and our mutual “friend’s” assurances that the man was honest. What really frightened us was the contract he faxed us asking for thousands of euros every 2 months or so. It was like waking up from a nightmare. And we said, no way. Thank God we didn’t sign anything but he claimed that we owed him for his expenses (never explained what expenses), 1800 euros worth.

  • #70698
    Profile photo of Anonymous
    Anonymous
    Participant

    Tell him to go and fly a kite. Even if you had signed a contract I cant ever see him chasing you in United states for it. If you were Uk or other EU state the sutuation could have been different.

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