implications for not completing

 Can you advise me on the position I am in if I am unable to complete on a private purchase contract where by I have paid 15% of the initial asking price. The builders are threatening to take us to court for the whole amount outstanding. Is this the procedure and can you be forced to pay for something that is now overvalued? I would appreciate your advice. Many thanks.

Hi

I dont know the answer to your question, but a contract is a contract, works both ways!

Would you have the same reservations if your property had gone up in value !

Whose fault is it that its now overvalued!

s

The argument would be not that the house has overvalued but, if you cannot obtain financiation, all the actors of the off-plan business agreed back in 2001 that this would be  cause for contract cancellation and devolution of all amounts paid.

http://www.eyeonspain.com/blogs/costaluz/482/credit-crunch-times-can-play-in-favour-of-consumers-why-not.aspx

http://www.eyeonspain.com/spain-magazine/sample-contract.aspx ( See 3.3 of General Conditions here)

Best regards,

 Maria

Would you be required to provide proof that you do not have sufficient finances to complete - I imagine it would quite a difficult thing to prove. Also have you heard of any developer actually taking clients to court to force them to complete ?. I know in our development (Dona Julia - Hercesa Phase 1) that many people just walked away and lost their 12.5 % deposits and that was that. It would just be impossible for the developer to go after all individuals who choose not to compIete and I'm sure there must be many in the current economic climate 

But in one development at the mo there will be a lot of people in the same situation so the developer will probably be gearing up for a fight - sorry but that's the way it is at the moment.  However in theory Spanish consumer laws are very protective so get some good advice.  ATB - Keith

What you need to prove is that your application for a mortgage have been turned down. That is what the agreement I am telling you about expressly and only says:

For specific information clik here and here ( go to clause 3.3 of the General Conditions)

Best regards,

Maria L. de Castro

I now know people that have actually excercised this right and got their deposits back OK and I understand that they have to get 3 mortgage refusals

The thing to watch is that on some builders mortgages they will agree to grant this regardless of a buyers financial status

I now know people that have actually excercised this right and got their deposits back OK and I understand that they have to get 3 mortgage refusals

The thing to watch is that on some builders mortgages they will agree to grant this regardless of a buyers financial status

if you signed the private purchase Contract before the economic downturn, its quite realistic that the value of the property has gone down around 40%. I know there are some exceptions e.g. upmarket properties around puerto banus. If you are looking for a 70% mortgage based on the original amount and you get an independant valuation carried out, I don't think many banks would be mad enough to lend you more than what the property is worth !. So if you have to get 3 refusals, just take your new valuation and apply to 3 UK banks and avoid the developers bank - I presume its your right where you go for your mortgage.

For the action I am exposing, according to clause 3.3 of the General Conditions of that national Institute for consumers´draft contract, you need to apply for the developer´s mortgage. We recommend another application to be added to the claim too.

Best regards,

Maria