Diary of a distressed property investor, Part III
My next installment payment has been pushed back by two months. But I’m still in trouble.
January 20, 2009 10:27 by Dana El Baltaji
We know property investors are struggling, and for the most part, we know why. But what most us don’t know are the everyday struggles they’re going through. One investor agreed to write a journal of her experiences for Kipp. We asked her to be ruthless: she obliged.
We’ve withheld her name for legal reasons.
After a few weeks of calling my developer and the Real Estate Regulator Authority (RERA), I have finally figured out my legal rights: since I do not have the developer’s promise for financing in writing, no amount of litigation will get me out of the contract without a substantial loss. Furthermore, the contract I signed does not state that the company has been approved by a bank.
Here’s the deal: Because of Rera’s regulation – which prevents developers from asking for more than 20 percent of the unit price until they begin construction and forces them to base their payment plans on the constructions’ progress – I don’t have to shell out any more money until the developer builds 40 percent of the structure (I have already paid 30 percent of the property’s value). The only problem is that the regulation is not a law, so companies aren’t forced to comply with it. However, according to the CEO of Rera, Marwan bin Ghalita, it is in developers’ best interests to keep Rera on their side. Apparently, Rera has been sending letters to developers about the regulation since November 2008.
Interesting. I don’t think my developer got the message. They either employ a troupe of illiterate jokers, or the letters from Rera weren’t clear; my developer seems to think that because they’ve broken ground, they have a right to continue with their payment plan.
Sure, they lied about the construction date (the sales manager insisted that they began construction in August 2008, even though they had the ground breaking ceremony two weeks ago), but they insist that they’re “right on track” now and that “everything is going to be ok.”
For 10 days, I tried to negotiate a new payment plan with them, but they kept fending me off. I was being pushed to my mental limit. I told myself that if one more person tried to pacify my worries with a “don’t worry about it. Your money is safe with us” comment, I was ready to let my inner devil come out.
Unfortunately, they gave me the spiel, so I unleashed the beast.
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