jonikal
12-28-2006, 10:59 AM
We signed a pre-construction contract in May of '06 to purchase a 3/3 condo from a large, well-known and supposedly reputable developer. Our building of 40 units is the first of several which will be built over the next 10 years or so. Unfortuntely due to the slow market conditions, only nine units have been contracted for and those also went under contract in May, none having sold since. As the contractual completion date cannot be met due to not having sold the required 20 units, i.e. 50% of the building, the developer has prepared new contracts as well as new condo documents for the buyers which allow another 15-day right of recision giving us the option of backing out of the deal. We have not yet seen the new contract or the new condo documents.
We were also informed that the developer had renegotiated the construction contract and had obtained a new, lower estimate due to the current slowdown in construction activities and reduction in costs of building materials, resulting in price reductions for the units. Our salesperson informed us that we could expect a reduction of between 9% and 12% on our unit. However, the director of sales informed us that our unit would only see a reduction of 2.8% because our unit was the "most desirable." Other units in the building have been reduced by as much as 30.5%. The same unit model on the same floor at the south end of the building, which sold for the same price as ours, would, according to the sales manager, get a larger reduction since it's location "is not as desirable as ours."
Here is what I would like to know:
1) Are we legally bound to sign the new contract?
2) What are the legal ramifications if we prefer the original one?
3) Is there any recourse in what to us seems to be an arbitrary price reduction formula used for our unit?
4) Do we have a legal right to ask for the algorithm used to re-price the units based on their claim of reduced cost of building materials (by that reasoning, wouldn't a larger unit qualify for a larger reduction due to the use of more building materials?)
5) If we were to sign the new contract, what assurances could we require from the developer to ensure that this is the final and binding contract?
6) The developer did not offer an interest bearing escrow account for our 10% deposit. Is this something we could expect to include in the new contract?
Many thanks!
We were also informed that the developer had renegotiated the construction contract and had obtained a new, lower estimate due to the current slowdown in construction activities and reduction in costs of building materials, resulting in price reductions for the units. Our salesperson informed us that we could expect a reduction of between 9% and 12% on our unit. However, the director of sales informed us that our unit would only see a reduction of 2.8% because our unit was the "most desirable." Other units in the building have been reduced by as much as 30.5%. The same unit model on the same floor at the south end of the building, which sold for the same price as ours, would, according to the sales manager, get a larger reduction since it's location "is not as desirable as ours."
Here is what I would like to know:
1) Are we legally bound to sign the new contract?
2) What are the legal ramifications if we prefer the original one?
3) Is there any recourse in what to us seems to be an arbitrary price reduction formula used for our unit?
4) Do we have a legal right to ask for the algorithm used to re-price the units based on their claim of reduced cost of building materials (by that reasoning, wouldn't a larger unit qualify for a larger reduction due to the use of more building materials?)
5) If we were to sign the new contract, what assurances could we require from the developer to ensure that this is the final and binding contract?
6) The developer did not offer an interest bearing escrow account for our 10% deposit. Is this something we could expect to include in the new contract?
Many thanks!