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Old 10-16-2010, 09:05 PM
 
22 posts, read 52,214 times
Reputation: 21

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To cherrytwist-
The case that I was responding to was a specific case that was cited by the developer as proof that people have to close, the whole point of my post was to say that it isn't that simple and that there were significant differences in the cases. If you actually read the case (which was on a different blog) you will see that many of the things that I mentioned would be considered by a judge. Real estate law is extemely complex and varies a lot by state. I can cite specific case law that would allow people to get out of their contracts if this were in California, obviously it's not and my nc specific real estate law knowledge is weak.

Also contract law can be very different when it comes people having different levels of expertise and power, in many states law is written to favor individuals over large developers, I don't how much this is the case in nc. the entire point of my post which was to say that there are a lot of things about this case that make it both difficult to analyze because of lack of precedent and open to interpretation by the judge on the case. Once again this was primarily in response to the assumption that the case cited by the developer meant he would win cases against depositors. This seems to be proven out by the various lawyers that have been retained by depositors that have come out saying a wide range of things on how much liability people have.

If I had a deposit down I absolutely would be scared about my liability. I think if you have the cash and ability to close you are far more at risk. I would have a lawyer take a brief look at things but wouldn't have him spend a lot of hours on it. I would play a waiting game and hope that someone else was sued first. It is still in question whether the developer will sue at all. By negotiating you are dealing with a developer that has been playing hardball and very aggressive, if I thought he would be reasonable I would feel differently. I think there are valid legal points on each side, the developer has a good case, but by no means a slam dunk.
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Old 10-18-2010, 01:15 PM
 
295 posts, read 453,576 times
Reputation: 198
Default Is this a possibility

Quote:
Originally Posted by vuebuyer10 View Post
Great feedback here folks, thank you. I can tell you that the contracts were not contingent on financing. So "imagine it" because a lot of smart people signed them. (maybe this makes them no so smart!) Many "good lawyers" have been consulted according to folks I have spoken with and the contract has been found to be rock solid. From what I can tell, some think lawsuits are a remote possibility; others think it is inevitable that they will happen. The default terms are pretty clear: you forfeit your deposit or damages, whichever is greater. My blog post on Monday will argue however that the biggest threat to the project owners is the appraisals, which if they continue to come in at the numbers they are now, will make it virtually impossible for most people to close. I don't know of cases, maybe there are some, where appraisals came in so much lower than the contract prices as they are coming in at the VUE. I think this could be a very unique situation and it will be interesting to see what happens as a result. Thus lots of drama to unfold in the days ahead.

My curiosity got the better of me, so here is my question.

If most of the current owners cant close they lose money to the builder.
Once most of the current buyers fail to close whats stopping the builder from putting these units back on market (at a discounted price).
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Old 10-18-2010, 02:13 PM
 
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Nothing prevents the developer from doing that. That is one of the reasons that people are scared to close. No one wants to close and then 3-6 months later have units auctioned at a significant discount. Even worse though is that apparently under the terms of the contract the developer can take deposits of those people that dont close, then resell the unit at current market terms needed to move it quickly then go back and sue the depositors for the difference between what the new person buying the unit paid and what they would have had to pay at closing. Whether the developer will choose to sue or would eventually win in court is up for debate.
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Old 10-19-2010, 01:17 PM
 
295 posts, read 453,576 times
Reputation: 198
Quote:
Originally Posted by CharlotteJW View Post
Nothing prevents the developer from doing that. That is one of the reasons that people are scared to close. No one wants to close and then 3-6 months later have units auctioned at a significant discount. Even worse though is that apparently under the terms of the contract the developer can take deposits of those people that dont close, then resell the unit at current market terms needed to move it quickly then go back and sue the depositors for the difference between what the new person buying the unit paid and what they would have had to pay at closing. Whether the developer will choose to sue or would eventually win in court is up for debate.

Why would the builder not want to sue. Unless the builder has a stake in Charlotte in terms of landholding he has nothing to worry about. On the other hand if he has other landholding he has reputation to protect. It must be brought to the courts notice that its only the common folks who invested in the first place are the only ones who are set to lose their money (A huge chunk of their money).

Else its repossession and resale for a profit as far as the builder is concerned. He virtually built the building for least cost input based on the initial contribution made by others!!! That would be a joke.
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Old 10-19-2010, 04:20 PM
 
171 posts, read 277,967 times
Reputation: 95
I agree. There is no downside to holding people to the contracts they signed. This particular developer, and it's one person, has a very long, interesting and controversial history as a major developer in Chicago. (the same city where the Obama machine comes from) I'm thinking, though I might be wrong, that given his history, he isn't going to be worried much about a few bruised egos in Charlotte.
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Old 10-19-2010, 06:03 PM
 
2,840 posts, read 4,159,780 times
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I agree the developer can sue but what is he going to get? He can ruin the peoples credit but if they don't have the money to close.....they won't close. The developer is still going to lose.
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Old 10-19-2010, 07:31 PM
 
171 posts, read 277,967 times
Reputation: 95
Quote:
Originally Posted by Charlotteborn View Post
I agree the developer can sue but what is he going to get? He can ruin the peoples credit but if they don't have the money to close.....they won't close. The developer is still going to lose.
I'm not sure if the party's credit record would even be hit if they didn't close as they never took out a loan. However, I don't think closing is the point. It sounds as if the party is responsible for the difference between the contract price and whatever the unit eventually sells for. The developer can sue after the unit sells in the future for this difference. I don't know what the statute of limitations might be for a civil judgment but it's definitely not a loss for the developer.
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Old 10-21-2010, 03:40 AM
 
171 posts, read 277,967 times
Reputation: 95
Maybe this applies in this situation.

Buyers Unearth Old Real Estate Law To Escape Now-Crappy Home Deals - The Consumerist
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Old 10-21-2010, 07:55 AM
 
22 posts, read 52,214 times
Reputation: 21
Actually this specific law which has recently been successfully used in a case in New York where someone wanted to get back a condo deposit has been explored by depositors at the Vue and my understanding was that sueing under the ISLA was not going to be effective as the developer did everything that they need to under that law. I am sure that people will still double check (and should), but the ISLA came up after a September article in the New York Times referencing the depositor that successfully sued for a refund. On the Vue blog one of the depositors said he had already checked that route and it wasnt going to work, still worth a shot but it looks like the Developer did what he needed to do.
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Old 10-22-2010, 05:35 AM
 
Location: Wouldn't you like to know?
9,114 posts, read 15,674,566 times
Reputation: 3695
Battling weak housing market, Vue may get tough if buyers try to bail - CharlotteObserver.com (http://www.charlotteobserver.com/2010/10/22/1778494/vue-may-get-tough-if-buyers-try.html - broken link)

Major "teachable moment" for both sides here.....don't jump on the train if you don't have a plan B...obviously both sides had major blinders on..
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