We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
buying off-plan abroad - cancel contract
avicola
Posts: 65 Forumite
I have got myself into a terrible situation and I need to know if there is anything I can do to get out of it without loosing around £80,000.
In September 2005, my partner and i decided to invest in off-plan apartments in Tenerife. The estate agents are english, have been in the business for 20 years, hold awards for anything that is going ie 'best estate agent in the canary islands,' and we had complete faith in them.
We were impressed by the apartments we saw, felt they were well priced and we decided this was a good investment.
We asked the estate what he felt if we were to purchase several and he told us that there was no problem in selling. We also asked him how we would know if they were to be completed on time which was January 2007. He told us that there were such heavy penalties that they had no option but to complete on time. On that basis we bought 7 and paid the deposit of around £29,000 each.
The rest you can guess. They havent sold - not one. completion has been delayed until we are truly in a property slump. We went out to see the apartments in May and was told that completion was around October. They also said that they didnt now think they had the right market for the property and were putting them out to other estate agents as well.
We have just been advised by the developers that they are now completed and they want the balance of £120,000 x 7 on 3rd July.
Obviously, we don't have that money and a mortgage is not a pheasable option as we are in our 50's and the high re-payments mean that we only have enough to pay for 2 months.
The only thing i can think of is to try and get out of the contract. The contract is in Spanish and it was never explained to us what would happen if we could not pay. The estate agents, who are a spanish registered company, have hinted that if the developer has to buy them back, we loose 50%.
any ideas gratefully received.
In September 2005, my partner and i decided to invest in off-plan apartments in Tenerife. The estate agents are english, have been in the business for 20 years, hold awards for anything that is going ie 'best estate agent in the canary islands,' and we had complete faith in them.
We were impressed by the apartments we saw, felt they were well priced and we decided this was a good investment.
We asked the estate what he felt if we were to purchase several and he told us that there was no problem in selling. We also asked him how we would know if they were to be completed on time which was January 2007. He told us that there were such heavy penalties that they had no option but to complete on time. On that basis we bought 7 and paid the deposit of around £29,000 each.
The rest you can guess. They havent sold - not one. completion has been delayed until we are truly in a property slump. We went out to see the apartments in May and was told that completion was around October. They also said that they didnt now think they had the right market for the property and were putting them out to other estate agents as well.
We have just been advised by the developers that they are now completed and they want the balance of £120,000 x 7 on 3rd July.
Obviously, we don't have that money and a mortgage is not a pheasable option as we are in our 50's and the high re-payments mean that we only have enough to pay for 2 months.
The only thing i can think of is to try and get out of the contract. The contract is in Spanish and it was never explained to us what would happen if we could not pay. The estate agents, who are a spanish registered company, have hinted that if the developer has to buy them back, we loose 50%.
any ideas gratefully received.
0
Comments
-
7x £120,000 = £840,000
Jesus.
So the plan was to sell them on before you completed?
You've got two options probably:
1] Hire a GOOD Spanish speaking contract lawyer to see if there's any way out of it (unlikely as the builders will have probably been able to afford an even more expensive one as they've got the whole development to defend)
2] Is Auction an option?
Let's face it, you don't have time to sell them, even at £5 each. You might not even have time to auction them.
How much is your current house worth? Do you just have the one family home?
Somehow, from somewhere, somebody's going to come after their pound of flesh. The money you owe them for any pricing shortfall.
Do your family know? Do you have adult kids/brothers/sisters who can help bail you out in the short-term while you exit as gracefully as possible? That won't make it go away, but will give you time to investigate all options.
I am staggered ... and can only hope that somebody with any experience can come along and give you good advice now. My posting is purely opinion, based on no experience (I don't even know where Tenerife is and I've never been abroad)
Good luck!0 -
I have got myself into a terrible situation and I need to know if there is anything I can do to get out of it without loosing around £80,000.
Where does the £80k come in? As PN says, they require the balance which is £840,000, the deposits came to £203,000. Di you really enter into a million pound property deal without understanding what you had signed?
You need to obtain legal advice from a very good solicitor, either Spanish based or a UK one who has full knowledge of the Spanish legal system, especially contract & property law.0 -
Yes, I'm also lost at where the £80K balances with the deposit. Also you mentioned severe penalties for not finishing on time, what were these penalties, as obviously they were well overdue.
I also echo the advice that you need qualified professional help very quickly, you must be sure whoever you get specialises in property law there.Hope for the best.....Plan for the worst!
"Never in the history of the world has there been a situation so bad that the government can't make it worse." Unknown0 -
It seems that if we don't comply with the contract then the developer keeps half of our deposit money. Really that is nearer to £101,500 depending on the exchange rate.
We were just so assured that this would not happen. We have just been lied to again and again by the estate agents who we trusted as they have every award going.
If the developer had kept to the completion date, or even near it, then we wouldnt be in this mess now. But i hardly think that will allow us to get out of the contract.
Paying the balance is not an option as it is just so huge.0 -
Is this thread real, or just a wind-up?0
-
I was wondering the same, I think we have to give the benefit of the doubt and try to help.Trollfever wrote: »Is this thread real, or just a wind-up?
I am staggered tbh at the figures involvedFreedom is not worth having if it does not include the freedom to make mistakes.0 -
Trollfever wrote: »Is this thread real, or just a wind-up?
You are not alone in thinking that.
Have you been lied to or are you looking to pass the buck? From what you have posted, you willingly entered into the agreement, no one held a gun to your head to make you sign up for these properties. You saw £ signs and thought you could make a quick buck, without doing your own due diligence.0 -
In all honesty, if this is your doorway out, then take it and be grateful you aren't being held liable for the full cost (£840k) minus whatever they can eventually get for them at auction (£400k?).It seems that if we don't comply with the contract then the developer keeps half of our deposit money. Really that is nearer to £101,500 depending on the exchange rate.
Really. It's late in the day, you've no time, the market is bombing.
Take the hit and get on with life, allbeit significantly poorer.
However. I am not a fighter. What a fighter might do is to head over to everywhere where they can find a naive investor to take it off your hands. Although I suspect that any investor naive enough to do this won't be able to borrow the cash to do it (nor quickly enough).
I've no idea how a fighter/entrepreneur would get out of this. Which is why I don't play these games. I'm sure 1 in 10,000 people could find a way out.
Maybe you could ask for advice on http://www.singingpig.co.uk or http://www.landlordzone.co.uk - bound to be other investors there who own property abroad.
I wish you luck though!0 -
I'm confused as to why you have not already got these apartments on the market. Even if you were given a completion date of October then why not have them on the market over the summer when you've got a chance someone will be visiting the island and decide they'd like an to buy an apartment.
I'd reckon the builders will have covered the contract so you are unable to get out of it. I'd suggest your best option is to hot foot it over to tenerife and start trying to sell these- even if it means giving out flyers on the beach!
Good luck0 -
You paid the 7 X £29000 from where?0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 355.8K Banking & Borrowing
- 254.9K Reduce Debt & Boost Income
- 456.1K Spending & Discounts
- 248.3K Work, Benefits & Business
- 605.9K Mortgages, Homes & Bills
- 179K Life & Family
- 263.7K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.7K Read-Only Boards