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Not sure if any of you have been following the news re a certain developer in Wellington. Basically Lance James has been building a development in Brooklyn with around 100 free standing houses. I looked at these in person and signed a purchase and sale agreement for one early in the year.
At the time I did some research and all I heard about this guy was bad. Even my lawyer advised against it. The property itself was superb and at circa $350k off the plans I would probably have made a good 60-80K by the time of completion. Anyway to cut a long story short I pulled out of the deal as the developer was involved in court cases with the council re consents and the like.
Just as well as it now appears that the developer has now used a sunset clause in the agreement to cancel most of the contracts, even on some properties that are finished and ready to be moved into. He used the sunset clause to renege on the deal by saying that the consents had not been agreed and changes had to be made to the plans etc (see the article http://www.stuff.co.nz/stuff/0,2106,3133468a11,00.html ). He will now re-sell these at the higher prices and take the profit from the capital gains himself.
This means that these purchasers who purchased off the plan at their own risk and who would have seen their properties grow by approx 90K in the year it has taken to build these now have nothing!. End result some very gutted purchasers.
Moral of the story sunset clauses can also be used by developers for their own gain. Make sure you get good legal advice and see if the clause can be worded for the purchasers interest rather than the developers like in this case!
At the time I did some research and all I heard about this guy was bad. Even my lawyer advised against it. The property itself was superb and at circa $350k off the plans I would probably have made a good 60-80K by the time of completion. Anyway to cut a long story short I pulled out of the deal as the developer was involved in court cases with the council re consents and the like.
Just as well as it now appears that the developer has now used a sunset clause in the agreement to cancel most of the contracts, even on some properties that are finished and ready to be moved into. He used the sunset clause to renege on the deal by saying that the consents had not been agreed and changes had to be made to the plans etc (see the article http://www.stuff.co.nz/stuff/0,2106,3133468a11,00.html ). He will now re-sell these at the higher prices and take the profit from the capital gains himself.
This means that these purchasers who purchased off the plan at their own risk and who would have seen their properties grow by approx 90K in the year it has taken to build these now have nothing!. End result some very gutted purchasers.
Moral of the story sunset clauses can also be used by developers for their own gain. Make sure you get good legal advice and see if the clause can be worded for the purchasers interest rather than the developers like in this case!
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