Can the bank actually do this?

Pincher

I think the main issue is to walk away from the deal or not.

Assume the property was valued at EURO100k two years ago, becuse you agreed to pay it. Further assume that it is now valued at EURO 70k. You agreed on the price of EURO100k, and have paid EURO20k deposit. You are now being asked to stump up EURO 80k to buy a property that's only worth EURO 70k.

My understanding is that the developer wants to be paid in EUROs.

Assuming the final stage payment is EURO 80k
Let us say EURO was 1:1.5CHF two years ago,
so you would have needed to borrow CHF 120k.
Assuming the EURO falls to parity 1:1 in June,
you will only need to borrow CHF 80k now.

It sounds like you have gained by borrowing in CHF.
LTV issue aside.

If the mortage is for twenty five years,
then the high monthly payments from sterling will be bad until
sterling appreciates again. Overall, I would say the currency loss/gain has tended to cancel each other out.

deefadog

Pincher, you are correct! we are actually up one each around 2k on each property, if we could sell that is, but property sales have been low, but are picking up!

The only leverage we have is that we have furnished the property, worth around 10k, we would be willing for this to be some sort of compensation.

We will find out state of play tomorrow!

Mands

deefadog wrote: »

We were told that 2 would be no problem, they are apartments within a complex if tha makes any difference? But this is another argument to pull out of one apartment, i'll go through paper work agaion to confirm!

Thanks

Being within a complex doesn't make a difference as far as I'm aware.

Does your contract give you the contractual right to walk away from one apartment? If so then that'd be unusual but fantastic for you.

Cypriot law is, broadly, based on English law so it sounds like you are in a similar position to those in the UK who bought off plan but now can't mortgage because the value of the property has decreased. Like them you can't just walk away (unless that is stated in the contract), you are legally committed to the contract to buy that you've signed.

I would have thought that your best bet would be to negotiate with the developer and see if he'll take one apartment back. If he does it'll probably cost you your deposit :-(

But, without a mortgage you can't complete and in the current market you will struggle to sell, particularly without your title deeds which I expect you haven't got?

It's a messy situation; I hope you manage to find a way through this.
Mands

deefadog

Thanks Mands, i guess negotiation will be key here, like i have said we have some bargaining tools, ie - the furniture pack, plus deposit, around 70% will be offset from interest gained over the years, so it will not be a massive hit on us.

Should find out something today, will update! I'll also find out about owning 2 apartments, legal or not?

Thanks again!

Mands

deefadog wrote: »

Should find out something today, will update! I'll also find out about owning 2 apartments, legal or not?

I think we're at cross purposes! Its legal to own them, just not to rent them out. But, the developer will almost certainly say it isn't a problem because so many people do it. Still not legal thought ;-)

Best of luck with the negotiations :-) Where's the complex btw? There's lots just becoming ready at Tersefanou at the moment.

Mands

deefadog

Thanks, Yes sorry, i did understand, sorry for the confusion!

Our apartments are in Pyla!

Do you work in this industry, or have your own apartments?

Mands

deefadog wrote: »

Thanks, Yes sorry, i did understand, sorry for the confusion!

Our apartments are in Pyla!

Do you work in this industry, or have your own apartments?

Ahh, lots of new apartment complexes going up in Pyla.

I don't work in the industry, just an interested bystander who moved here a few years ago :-)

Mands