Some advice please – Fadesa issue non completion

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This topic contains 8 replies, has 2 voices, and was last updated by Profile photo of Anonymous Anonymous 7 years, 6 months ago.

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  • #54969
    Profile photo of Anonymous
    Anonymous
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    Hi

    I did not complete on an apartment shortly before MF went into administration. I am trying to get some of my cash back or at least get a clearer picture of the situation.

    Currently out in Spain to tryy and find out more. No real new news from our solicitor. We have not been accepted as creditors which he seems to imply is good. i.e. we have a contract with them which he says they have breached – although I have no evidence how the case is being developed to prove this. However, they have to do something with us if they eventually want to sell the apartment (it is complete but very poor quality) – and the banks are holding 80%/70% mortgages on it. Could they sue us to complete? However the solicitor seems to think it will take time and so I have to appreciate his honesty on this. I am just worried they will at some stage hold us to the contract – apparently that is what would happen in Portugal. It is still difficult to get any clarity about this. We are worried about following up other possibilities (resales) without real clarity about this although we have seen a very nice resale on a different urbanisation at what seems a reasonable price with great views. Still rather more than we had left to pay on our prevvious puchase and all the others we saw at our price were not very good. However, we have decided we cannot do anything until our position is clear.

    Our solicitor made a suggestion. On the face of it it seems a good idea but it needs some thought. The suggestion is to swop the apartment for a plot- Fadesa had sold all the plots but loads have come back due to speculators who bought loads but could not complete. As the plots do not hold mortgages on them Fadesa are willing to swop. It releases a property and then allows the purchaser to sell the plot. I checked with one of the agents and they have sold plots – lower than original price but I can take a cut due to the euro difference from when I paid the deposits. What we would need to do is share a plot with someone else – i.e. enter into an agreement with someone else who has paid a deposit so that we don’t have to pay out anything more – we would need to hope that our joint spend so far is equal to a plot cost plus IVA – I hear they will take a reduction – complete on it and then try and sell it – coming down by 30% will still result in breakeven and would be quicker than waiting to see if we get anything back from this fiasco. What possible issues could there be other than not managing to sell the plot? I just wonder whether it is worth waiting but the solicitor reckons it will take at least a year and a half.

    Anyway sun is shining here and it is lovely. Has been a strange sort of holiday trying to sort things out, look at property to gauge how things are going and to try and have a bit of a holiday. What do people think about the plot idea? Global minds should be able to see the hitches!
    CES

  • #92018
    Profile photo of Anonymous
    Anonymous
    Participant

    CES, I take it your place is in Costa Esuri. You have asked for matters that are complex in most Countries.

    The object of the Liquidators is to realise all assets & distribute them to the creditors, as set out by the law of the respective Country. Your completed flat is an asset & can be turned into cash for distribution.
    (quality of finish does not matter as this could be subjective ) Yes you could wait for some time. As liquidation is always a long drawn process without the Spanish manana, who knows when it would happen.

    I cant see why your solicitor is advising for an action for a breach of contract. Even if you win your case you will be ranked as an unsecured creditor of Fadesa and lets face it if Fadesa had cash or available credit they would not have put into liquidation/protection from them.

    On the land front, yes they were sold so Fadesa does not own them anymore. However some speculators may not have transferred the titles for saving tax etc. This means that any interested party may challenge the sale/ownership of these plots. Besides the VAT on sale of land is 17%+/-.

    You also need to think that the infrastructure such as water, sewage may not be in place & who knows if & when they would be there.

    The Spaniards have moved into Costa Esuri and have been offering silly prices & getting them from desperate sellers.

    I don’t know how old you are, but if I was in your shoes I would not try and make a bad situation further complex. Sit on your purchase & by the time Fadesa demands the money from you three, five years down the road the long term market would have improved,as the speculators would have been bought out by the Spaniards & demand & supply would have equalised.

  • #92040
    Profile photo of Anonymous
    Anonymous
    Participant

    @shakeel wrote:

    CES, I take it your place is in Costa Esuri. You have asked for matters that are complex in most Countries.

    The object of the Liquidators is to realise all assets & distribute them to the creditors, as set out by the law of the respective Country. Your completed flat is an asset & can be turned into cash for distribution.
    (quality of finish does not matter as this could be subjective ) Yes you could wait for some time. As liquidation is always a long drawn process without the Spanish manana, who knows when it would happen.

    I cant see why your solicitor is advising for an action for a breach of contract. Even if you win your case you will be ranked as an unsecured creditor of Fadesa and lets face it if Fadesa had cash or available credit they would not have put into liquidation/protection from them.

    On the land front, yes they were sold so Fadesa does not own them anymore. However some speculators may not have transferred the titles for saving tax etc. This means that any interested party may challenge the sale/ownership of these plots. Besides the VAT on sale of land is 17%+/-.

    You also need to think that the infrastructure such as water, sewage may not be in place & who knows if & when they would be there.

    The Spaniards have moved into Costa Esuri and have been offering silly prices & getting them from desperate sellers.

    I don’t know how old you are, but if I was in your shoes I would not try and make a bad situation further complex. Sit on your purchase & by the time Fadesa demands the money from you three, five years down the road the long term market would have improved,as the speculators would have been bought out by the Spaniards & demand & supply would have equalised.

    Thanks Shakeel for your thoughts. I have another question. We will not complete on this apartment as the quality and the environment in particular is so poor – no plants trees etc – very stark even in winter. However in spite of what everyone seems to be saying about Costa Esuri it is really a lovely spot. It may take years, if ever, for the full concept to be realised but if it is taken for what it is – a lovely spot with easy accessible routes then things look different particularly if the price is right. You are right – the Spaniards are buying it up at rock bottom prices as whole blocks are being put up by banks. I have the opportunity to buy one at 30% – 40% less than its price 3 years ago. It seems a bargain since I like the place – not the building site etc and in any case the block I would buy on is completely finished has trees and plants and the rest in place. However I am holding off because I am scared that Fadesa can force me to complete on the apartment I don’t want. I certainly cannot afford to buy two apartments. Informally my solicitor has told me that it is not a problem but I really need to know what the law is here. I can afford and like the resale – at best I want to leave my previous investment to see what I can get – at worst I want to walk away from it – I certainly do not want to be forced to complete. Can this happen?

  • #92124
    Profile photo of Anonymous
    Anonymous
    Participant

    We will not complete on this apartment as the quality and the environment in particular is so poor – no plants trees etc – very stark even in winter.

    AS I SAID BEFORE THIS WILL NOT BE LEGALLY ACCEPTABLE REASON.

    However in spite of what everyone seems to be saying about Costa Esuri it is really a lovely spot.

    AGREE.

    I have the opportunity to buy one at 30% – 40% less than its price 3 years ago.

    WHY WOULD YOU PLACE ALL YOUR EGGS IN ONE BASKET. I.E. BUYING MORE THAN ONE PROPERTY IN THE SAME SPOT/RESORT.

    However I am holding off because I am scared that Fadesa can force me to complete on the apartment I don’t want.

    YOU WILL BE FORCED TO COMPLETE OR LOOSE YOUR DEPOSIT.

    Informally my solicitor has told me that it is not a problem but I really need to know what the law is here.

    WHAT DO YOU MEAN THE LAW IS HERE. YOU CAN BUY AS MANY AS YOU CAN. IF YOU FORGO YOUR DEPOSIT ON THE BASIS THAT YOU DONT LIKE THE QUALITY, THIS WILL NOT BE ACCEPTABLE IN THE COURTS. IF ON THE OTHER HAND YOUR REASONS FOR NOT COMPLETING FOR LACK OF FINANCE AND FADESA FINDS OUT THAT YOU HAVE ANOTHER PROPERTY IN THEORY THEY CAN FORCE THE SALE OF THE SECOND PROPERTY TO RELEASE CASH TO COMPLETE ON THE FIRST ONE.

    I can afford and like the resale –

    I AM SORRY, I FEEL THAT YOU SEAM TO BE HOOKED ON COSTA ESURI AND USING YOUR HEART MORE THAN YOUR HEAD.

    at best I want to leave my previous investment to see what I can get – at worst I want to walk away from it – I certainly do not want to be forced to complete. Can this happen?

    SEE ABOVE

  • #92129
    Profile photo of Anonymous
    Anonymous
    Participant

    @shakeel wrote:

    We will not complete on this apartment as the quality and the environment in particular is so poor – no plants trees etc – very stark even in winter.

    AS I SAID BEFORE THIS WILL NOT BE LEGALLY ACCEPTABLE REASON.

    However in spite of what everyone seems to be saying about Costa Esuri it is really a lovely spot.

    AGREE.

    I have the opportunity to buy one at 30% – 40% less than its price 3 years ago.

    WHY WOULD YOU PLACE ALL YOUR EGGS IN ONE BASKET. I.E. BUYING MORE THAN ONE PROPERTY IN THE SAME SPOT/RESORT.

    However I am holding off because I am scared that Fadesa can force me to complete on the apartment I don’t want.

    YOU WILL BE FORCED TO COMPLETE OR LOOSE YOUR DEPOSIT.

    Informally my solicitor has told me that it is not a problem but I really need to know what the law is here.

    WHAT DO YOU MEAN THE LAW IS HERE. YOU CAN BUY AS MANY AS YOU CAN. IF YOU FORGO YOUR DEPOSIT ON THE BASIS THAT YOU DONT LIKE THE QUALITY, THIS WILL NOT BE ACCEPTABLE IN THE COURTS. IF ON THE OTHER HAND YOUR REASONS FOR NOT COMPLETING FOR LACK OF FINANCE AND FADESA FINDS OUT THAT YOU HAVE ANOTHER PROPERTY IN THEORY THEY CAN FORCE THE SALE OF THE SECOND PROPERTY TO RELEASE CASH TO COMPLETE ON THE FIRST ONE.

    I can afford and like the resale –

    I AM SORRY, I FEEL THAT YOU SEAM TO BE HOOKED ON COSTA ESURI AND USING YOUR HEART MORE THAN YOUR HEAD.

    at best I want to leave my previous investment to see what I can get – at worst I want to walk away from it – I certainly do not want to be forced to complete. Can this happen?

    SEE ABOVE

    Surely we cannot be forced to complete on a property we don’t want – at worst we can surely only use the deposit? I have no intention in having two places on Costa Esuri

  • #92130
    Profile photo of Anonymous
    Anonymous
    Participant

    Why do you find it difficult to accept that Fadesa or any other developer can legally force you to complete. Location, quality etc, etc will not stand in the Court. so please dont call me “surely”

    Further, if you dont complete you could lose your deposit. In theory they can chase for the balance of the amount. In the past this did happen as they could sell the property to some one else. In today’s market this may not be the case.

    I know that developers in UK have done exactly that.

  • #92132
    Profile photo of Anonymous
    Anonymous
    Participant

    @shakeel wrote:

    Why do you find it difficult to accept that Fadesa or any other developer can legally force you to complete. Location, quality etc, etc will not stand in the Court. so please dont call me “surely”

    Further, if you dont complete you could lose your deposit. In theory they can chase for the balance of the amount. In the past this did happen as they could sell the property to some one else. In today’s market this may not be the case.

    I know that developers in UK have done exactly that.

    I have never known anyone to be forced into a purchase or chased for the balance but accept that I could lose my deposits – to be honest I have almost accepted we will not see any of this money. I can live with this if I have to – just not anymore.

    Use of the word ‘surely’ it just for emphasis – it is not a name.

  • #92168
    Profile photo of Anonymous
    Anonymous
    Participant

    I did say in theory. I know a very large builder in UK had exactly done this on a property costing £2.5 million.

    The buyer wanted to pull out. The builders took them to Court for breach
    of contract. The buyer had to sell other assets to complete the sale.

  • #92193
    Profile photo of Anonymous
    Anonymous
    Participant

    @shakeel wrote:

    I did say in theory. I know a very large builder in UK had exactly done this on a property costing £2.5 million.

    The buyer wanted to pull out. The builders took them to Court for breach
    of contract. The buyer had to sell other assets to complete the sale.

    I have had a quote from another solicitor to review our situation – he wants 600 euros but also needs us to tell our solicitor and get all the paperwork. I suppose it is not a lot of money for peace of mind but I wonder what our solicitor would say.

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