Legal tip 127. Beware of distressed properties on sale
Thursday, August 20, 2009 @ 11:46 AM
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 cancellation 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. Initially the problems will not fall into you if you bought according to Land Registry information but....
It is always advisable to have a good independent lawyer checking on all details. Believe me! 
Maria
web@costaluzlawyers.es
www.costaluzlawyers.es
Toalla en Aguadulce, CostaBallena, Cádiz by Photo Javi at Flickr.com