Hundreds of homebuyers are facing a choice between legal action or losing thousands of pounds on property bought at the height of the boom as developers get tough with purchasers.
PBN Property Ltd has confirmed it is taking legal action against two parties who signed contracts for new apartments in its Woodlands Manor development at Stockman’s Way in Belfast but who have not completed the purchase. It is understood to have started proceedings against 10 other buyers to enforce the contracts to buy flats.
A spokesman said: “We have honoured our contracts in the construction and delivery of Woodlands Manor and we expect our contracted purchasers to do the same.”
Buyers who snapped up the first homes made available in the Belfast development The Bakery on the Ormeau Road also claim they have been threatened with legal action for not wanting to hand over the full price agreed at the height of the property boom.
Many buyers are not willing or able to pay prices agreed at the peak of the market in early 2007 for properties which are now worth 30%-40% less and would leave them facing a serious negative equity problem.
Last week the Belfast Telegraph also reported buyers who had put a 10% deposit on apartments at The Arc development in the Titanic Quarter are now unable to get affordable mortgages because lenders’ valuations were coming in at 30% below the agreed price.
That has left buyers with as much as a £50,000 shortfall to make up.
People who paid a premium in 2007 – £300,000 plus in some cases at the 156-flat Ormeau Road development – are angry that they must honour the premium price despite falling house values.
However, developers are insisting contracts are honoured at the agreed purchase price.
A spokesman for Big Picture Developments, which built The Bakery, said: “We feel we have delivered a first class product and kept to our side of the bargain contractually and we expect our purchasers to do the same.”
PBN has built a number of high profile apartment blocks in and around Belfast in recent years and claims on its website the Woodlands Manor flats are 95% sold.
It is thought to be the first local developer to go to court over the non-completion of contracts but there are concerns the legal action could open the floodgates to other actions.
Unless developers agree to cancel contracts buyers are not able to simply forfeit their deposit and walk away from a purchase.
In some cases developers have agreed to sell the apartment again at current market value if the original buyer makes up the difference to the agreed price. However, that also leaves the original buyer thousands of pounds out of pocket and with no apartment to show for the expense.
The Bakery was launched in a blaze of publicity in 2006/7 and it has emerged there are no plans to release any of the remaining unsold homes at this time.
One hundred of the plush homes, which include penthouses with panoramic city views, have been sold to date, according to the selling agent BTW Cairns.
Despite the high prices once commanded, they are now unspecified, with no homes there available for sale.
Thomas O’Doherty of BTW Cairns said: “The developers wanted to raise the bar in terms of new schemes with bigger, high-spec apartments and Diarmuid Gavin-designed courtyard garden. We are confident The Bakery will become a Belfast landmark.”
He added, however, that there will not be another release until at least next year.