New trend happening out in the Vancouver market brought to my attention by Will Wertheim.
People are refusing to close on condominium purchases even though they may have already paid a deposit / down payment of 15, 20 or 25%.
They are just walking away. The Builder then puts the units up for sale. Failure to complete means that the developer really only has one option: Sell them and sue for the difference.
When a buyer backs out of a firm deal (no subjects and we are talking with a pre-sale or even your own sale with your own realtor) you cannot sue for the whole contract value. You must demonstrate a loss and that means you must sell the property. At this point in time No Mutual Release has been provided to anyone. The Builder has your initial deposit and will probably be coming back for more.
Once the property has been resold the Builder will have tangible losses to prove in court for the shortfall in the transaction and you will be liable.
Developer sues buyers for backing out on condo pre-sales agreements
Another Metro Vancouver developer has launched a flurry of lawsuits against buyers attempting to walk away from pre-sale contracts in one of its developments.
In January, Amacon filed suit against seven buyers in its Morgan Heights project.
This time it is Onni, the developer that is also attempting to unload hundreds of unsold condominium units in developments around Metro Vancouver, that is suing 20 buyers in the Aria 2 building of its Suter Brook community in Port Moody.
David Pylyp; There is another question posed by someone from the Financial and Mortgage community, How will the banks treat the contracts that were committed to lets say 24 months ago where financing is now required in 2009?