All warnings are not enough!
Legal tip 127. Beware of distressed properties on sale
20 August 2009 @ 09:46
Some distressed properties are being sold by developers/ agents, whose initial buyers did not come to the completion of the property ( due to lack of finances, developer´s delay or any other cancellatory breach...),at a much reduced price: the fall of the market and the fact of a 30% deposit being already at the seller´s pocket make this possible.
The danger is here: the 1st buyer still has on the property:
- 15 years to act for contract cancelaltion and refund of money paid ( if there is ground for contract cancelaltion) or
- No deadline to finally buy, as long as his contract is not cancelled the buyer keeps buying rights on the property.
Imagine you buy ( 2nd buyer) a distressed property now and in two years´ time, once there is some recovery in the financial industry, the first buyer wants now to buy what has been offered and bought by you at a much reduced price. According to a contract he has with developer and which has not been formally cancelled, he has buying rights on the property you also bought:
What would you find then? Yes, a crime by theseller but.... a nightmare for you as a Judge might end up passing a decission by which the initial buyer has rights to buy and you just a judicial action against the criminal seller for the money you paid and .... no house.
It is always advisable to have a good independent lawyer. Believe me!
Toalla en Aguadulce, CostaBallena, Cádiz by Photo Javi at Flickr.com