November 5, 2010 at 10:32 am #55945
Hi I paid 30% deposits on several off plan developments some years ago, the developers have not built or have gone bust. My lawyer feels that given time he can recover some money, has any one had any luck in getting a deposit refunded?
I have also been offered a deal by a developer where he will take over my exisiting legal action and gift me my lost deposits on a development so I can have a completed property and take over the existing mortgage including all the buying costs. Has anyone come accross these type of deals?
November 5, 2010 at 11:03 am #101424
You can look at this 2 ways. You have lost 30% of an off-plan purchase price. If you had completed you would have lost more as the real market value today would be around a 40% loss and increasing. It would be probably 10 years or more until the property reached your purchase price. So with your remaining 70% you could buy a better or cheaper apartment.
Secondly why get involved in another scam. No developer is going to pursue legal action on someone else’s loss. He will be simply offering you an apartment at an inflated price!
There a millions of properties for sale, if you still wish to purchase and I were in your shoes I would buy from a private seller and keep it simple. I would not give a deposit (only around 500 Euros to show faith) and effectively pay in full at the notary.
As an aside…
Those that purchased off-plan from around 2005 onwards and have lost all of their deposit, assuming it’s no more that 30% should consider themselves lucky. Had they completed their losses would be far greater today and when this crash bottoms out probably end 2011 or early 2012 they would be sitting on 50% losses)
My Spanish mother-in-law made the comment to my wife about a year ago that we were lucky to get the key to our apartment when lots of people hadn’t. I don’t have the apartment today as it’s now sold. I had to point out to my wife we would have been more lucky if we hadn’t got the key!!
November 5, 2010 at 5:45 pm #101425
In most situations as this your first loss is always the cheapest. Litigation involves simply pouring good money after bad and making lawyers richer. Hard as it may seem my best advice is right it off, wipe the experience from your mind and buy a repo property from a Spanish bank. That way you buy into someone else’s pain but at the right price with a completed property. In many years to come you should easily recover your loss.
November 5, 2010 at 9:48 pm #101428
ianoven,i dont know what part of spain your property was going to be. but if it was murcia you have saved a lot of money if you walk away from your deposit. buy a resale.
November 7, 2010 at 6:07 pm #101439
Did you have a bank guarantee for the deposits you paid? Even if it has expired you can still claim on it because it is illegal to put an expiry date on a bank guarantee. We successfully claimed on our expired b/g, received our original deposit of 76000 euros back, well worth pursuing, and have purchased a resale property at a much lower price than our original purchase. We have also now realised that we wouldn’t have been happy with the original purchase with either the off plan development which would have been a ghost town for a number of years, or the location in general which was too far away from anywhere. I would rent for a while, it’s not a waste of money, it helps to save from an expensive mistake, and have a good look round, decide on the area and then the property. I definitely would advise a resale, there are some fantastic bargains about now.
November 7, 2010 at 6:14 pm #101440
walking on sunshine: So pleased to read your experience. I hope it will encourage others
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