Did you default on your pre-construction purchase?

It’s amazing to me that we still get calls from people that bought Miami Beach condos in pre-construction, possibly in 2004 or 2005, and are still trying to work out deals with developers and encountering little to no cooperation. Our first recommendation is to hire an attorney, there are many that have been successful helping buyers get deposits back, or at least applying those deposits to purchase different condo units.

We are not attorneys and we are not accountants, but consulting with professionals will educate you regarding real estate contract rescissions and deposit recovery statutes. You may have the opportunity to rescind your contract prior to closing and in many cases recover all or most of your deposit. When you do communicate with the developer, make sure you get everything in writing! Also know that if you have lost a deposit, it may be tax deductible – hence the reason consulting with an accountant is a smart move.

Furthermore, you may be entitled to a part of that deposit according to Florida Law even if you defaulted on the closing!

Why am I writing about this now? We recently wrote about a Miami Beach condo called Mei – it’s funny how we can change our perspective on a great condo project when we see customers mistreated and we see a total lack of respect and flexibility from the developer.  Of course Miami Real Estate gets a bad rap, you have hundreds of people who are getting little to no help regarding their options and many developers are turning their back on them and offering no help whatsoever.  In the case of Mei, these foreign buyers put a nice chunk of change as a down payment and never closed, with the hopes that part of their deposit could be applied to a lower priced unit in the same building.  After months of back and forth, they were told that their deposit money was used for construction and the only way to apply it to another unit of less value, was to apply pre-construction prices which are in excess of $100,000 from current prices.  To top it off, here’s the unedited email we received from the broker yesterday,

the only relavent statement at this time is

the 25% of the original deposit is their right to have returned.

Nothing else is of any importance.  Today is today.  Their Statutory

rights to a portion of their original deposit are granted by law.

Our prices today are firm and non-negotiable!

So what is the client’s option???  Even if they were to hire an attorney and get anything accomplished, wouldn’t it leave a sour taste in their mouth about the whole experience?  I say walk and hire that attorney to get you the most money possible from that deposit.  You may be entitled to more than the 25% (but remember I’m not an attorney).

There are plenty of condo projects in Miami Beach that are flexible and are willing to work with willing and able buyers.  I find it appalling that some developers are turning a blind eye at today’s real estate market conditions and are using deposit leverage as a trap.

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