I am answering below in bold green:
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You responded previously to the query within the thread "off-plan delays", “If purchasers have won their case for breach of contract and have been awarded interest on monies deposited, but the developer has gone to appeal and then bankruptcy ensues before the appeal is heard, would their credits be classed as preferential and would this include the interest awarded? “
Your reply was “In that case, the credit will be what the Court Decission stated ( deposit + interests?+ delay interests?+ legal costs?) and the classification of the credit as privileged and special will depend on the legal defense you act and the decission of the Judge. “
Well recently we read something contrary to this advice, i.e. that the property is only classed as a security if you want it, i.e. if your intention was to complete, whereas if you want the deposit back plus interest, then the credit will be classified as ordinary and not privileged.
Does this mean that those who have won their case for breach of contract (i.e have no intention of completing as they won their case) will struggle to regain their monies if the developer declares bankruptcy in the interim, before monies are returned as per the original court judgement? They will have to intervene in the Creditor´s meeting with a good defense on their credit being special and privileged.
Does this make the whole process of winning your original case irrelevant with regards to regaining your monies, if the developer ultimately declares bankruptcy? Not really, as you will at least will have a judicial title for full amounts, plus legal interests, plus possibly legal costs and you will ahve to deffend it as special and privileged and covered with a kind of tacit legal mortgage on the house you were buying. Neddless to say, the optinal situation would be you had a Bank Guarantee. What protection does the purchaser who has won their court case have in this regard during the remaining legal process to actually reclaim their monies? Indeed is there any protection within a legal framework? Yes, a strong, adequate defense of the credit as privileged and special.
This message was last edited by ads on 9/27/2008.