Bank Guarantee subject to contract change
I am purchasing an apartment at Ochando Golf resort and transferred 25% deposit in April 2007.
The deposit was transferred in good faith on the understanding that a Bank Guarantee would be issued. I have since discovered that there is no bank guarantee in place.
The apartment was due to complete in April 2009 although there is a 6 month grace period in the contract so developer has until October 2009 to complete. As far as I know the building on the actual apartments has not even started yet although some work to golf courses, show homes is complete.
My lawyer has advised that they had been chasing for the bank guarantee since the beginning.
The developer has now advised that the bank guarantees are ready to be issued but only if we agree to them postponing the completion date in the contract by 1yr. If we do not agree then no bank guarantee!
I would appreciate any advice on this as I feel we are being blackmailed. If we do not agree and the builder goes bust we could lose our deposit.
Can I arrange a bank guarantee?
Thanks for your response.
I have already read the articles and found them very informative. I have advised the lawyer that the bank guarantee must be dealt with and have offered to contribute and claim money back from developer at completion (if this ever goes ahead).
They appear to be saying that it is the bank offering the guarantee that want us to agree to the extention in time. Surely there are other places to source a BG
Am I able to arrange my own guarantee as I thought this was something the developer had to do? Is the cost of such a guarantee based on a percentage of deposit?
Sorry for all the questions but I am keen to secure my deposit.
My main concern about waiting til Oct 09 is that faced with refunding a large number of deposits the developer may decide to go into adminstration rather than pay out.
Developer refusing to issue BG
The developer is not prepared to issue a BG - even if there is no financial cost to them!
The developer will only issue a BG AFTER we have signed an amendment to the contract postponing the completion date. We have already fell for this once!
Our lawyers appear to be saying that we cannot take action purely over the bank guarantee, without filing a claim for breach of contract. Is this true?
I do not think we would stand a chance going for breach of contract as it has not been breached yet!
I would like to take any action I can to obtain a bank guarantee on the existing contract and would appreciate it if you could advise me of the potential cost involved (Legal cost and cost of BG). I do not think our lawyer is acting in our best interest over the issue. Would you be able to look over a few of the emails sent/ received to the lawyer and let me have your professional opinion?
I anticipate we will have to litigate once the contract term has expired. Obviously I would be happy to wait providing a BG in place. Please can you advise approx cost of litigation so I can start saving! If you have been contacted by other investors - would we be able to bring a group action against developer if he does break the contract.
Thanks
Jo
I am an interested party also.
I seem to be having the same problem. Why is it that you cannot get answers when someone somewhere has your money. I was assured that the deposits were put into an escrow account that neither the developer nor I could touch pending completion. I now find that this is not the case. I have to admit there is nothing in writing about the escrow account and the company I dealt with are in liquidation. I am waiting to hear from the lawyers as we speak but so far I am getting nowhere.
In the event we get to October (which is the additional six months allowed in the contract) would that be the best time to approach the developer direct or should I do this through the lawyers although I am starting to believe they have their own agenda.
Regards and thanks for any help you can give to me.