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Originally Posted by llama64
Condo builder's make me sick.
They use the market as a Force Majeure to get out of their existing contracts just so they can force much higher prices on buyers in a blatent attempt to milk the local realty market. Now that the pendulem has swung the other way, people who signed those ridiculous contracts are now stuck with them despite being in very much the EXACT same position the builders were in when they pulled their crap.
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You seem jaded, but this isn't true for most developers.
Very few developers have raised prices after contracts are in place, and it is widely regarded as an offside dirty policy within the industry, as well as not even possible in most cases. You're painting a huge industry with the same brush based on a few lousy developers.
Very few developers will attempt to get out of their existing contracts, because they need those contracts in place for their financing agreements. That's the whole point of selling pre-sale. If they didn't need those contracts in place, they would have built the whole building, and then sold finished product.
For years, investors have made a killing buying and selling pre-sales in escalating markets, and now that the market has turned, people expect to get out? How is that fair?
Investors shouldn't have expected zero risk, and sometime the market will go down. To expect a free ticket out of your contract when you're not happy with the market isn't fair.
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Originally Posted by CFENT
We bought some units of the Skytower in November of 2005- right as the boom was taking off. After 180 days the Rockwell Developments sent us a letter saying that they were unable to secure a building permit from the city and sent us back our deposit and told us the contract is now void. In the contract they put an out clause that they could cancel if they could not get permits in a certain period.
These developers are smart enough to have clauses to get of the contract for themselves but not have any for the purchaser to get out.
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This often has more to do with Real Estate Laws, then the developer and is generally for the protection of buyers. In BC, the Real Estate Marketing Act enforces that a developer has to secure financing and building permits within 1 year from the original disclosure statement.
If they don't, the purchasers have the option to opt out and get their deposits back, instead of waiting for a project that may never happen.
The key difference here, being you should have had the option. I've never seen an automatic cancelation clause like that in the 50+ developments I've worked with.
For what it's worth, we almost took over the sales of that project, and the developer was an A-hole. I'm glad we're not dealing with that project, and you likely should be too.