What can happen to me in default case?

Asked by Frank, 33130 Tue Nov 18, 2008

I signed a contract for a pre construction unit 3 years ago with 20% down payment. The developer recently
informed me that we need to close very soon. However I figured out (through an appraiser whom I hired) that the market value of unit is dropped more than 50%.
The contract has no loan contingency (in other words it is no matter whether I can get a loan or not) and if I don't show up at closing date, I need to pay them the interest amount for any delay.

I'm trying to negotiate with the developer. However if he does not accept the current market value, what else I can do?

What can happen in default case? How can I walk out without any penality?


Can I forget my down payment and get rid of contract without any additional consequences?

Please advise me.

Thanks

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Answers

5
gabriel palo…, Agent, Pompano Beach, FL
Wed Apr 20, 2011
Always expect the worst case scenario. That way you will be never disappointed
0 votes
Mott Marvin…, Agent, Sunny Isles Beach, FL
Sun Jan 24, 2010
Your situation is very common. Prices for pre-construction condominiums 3 years ago were 20-50% over and above todays market value in many parts of Miami, South Beach, Sunny Isles Beach, Coral Gables, Miami Beach, etc. You do have options-

1. Read Your Contract- Damages Liquidated, etc.
2. Hire An Attorney, Deposit Disputes are BIG business
3. Negotiate with the Developer.

There are many attorneys in Miami that work in resolving Buyer/Developer issues. Most buyers are fighting to recover deposits made for various reasons... misrepresentation on the part of the developer is quite common.
0 votes
Richard Leci…, , Tucson, AZ
Sun Jan 24, 2010
Talk to a lawyer ASAP. As mentioned this is not a question for real estate agents.
0 votes
Adrian Diaz…, Agent, Miami, FL
Sun Jan 24, 2010
Hi Frank,
David is not wrong in saying you will very likely need the services of an attorney. But, this has happened enough times in Miami to where some things can be said (in general non specific terms) that can act as a yardstick or measure.

In most developer contracts to purchase a new condo property, you are usually at default of losing a percentage of your deposit if you don't close.

You would need read up on the laws on this or consult an attorney after having read your contract very closely.

If you are still trying to close but at a discount, then you will be in a situation that depends on a lot of things.
Such as, does the bank already own the developer units, are they willing to give you concessions? More time to close? Special financing, etc...

From my experience you risk your downpayment or the monies you have already placed with the developer. Learn more about the project to know better what you can and cant get away with. Consult a good attorney to advise you of your contractual obligations and keep on negotiating in the meantime!
Web Reference:  http://www.emh3.com
0 votes
David Chambe…, , Saint Petersburg, FL
Tue Nov 18, 2008
A real estate agent can't and shouldn't aswer this question you need to talk to a lawyer.
0 votes
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