Developers go to court to force buyers to buy

The gloves are off to compel those who signed legal contracts to purchase apartments to now complete the deal, writes JACK FAGAN

SEVERAL DUBLIN-BASED property developers are planning to take legal action against investors and first-time buyers to force them to complete the purchase of apartments booked during the property boom. Prices in many Dublin developments have since fallen by 40 to 50 per cent.

The developers of Spencer Dock in the north Dublin docklands and Heuston South Quarter opposite Heuston Station are already taking legal proceedings to get clients to close on sale deals agreed several years ago.

A number of other developers, known to be under considerable pressure from banks to pursue more than 200 defaulters, are apparently holding back in the expectation that they will have greater success if, as expected, mortgages are more readily available in the new year.

Treasury Holdings, the first developer to sue in the present slump for “specific performance” against individuals who paid deposits and signed legal contracts, had an important victory last week when the Dublin Circuit Civil Court ordered a Dublin man to complete the purchase of two apartments at Spencer Dock, one costing €650,000 and the other priced at €790,000. Deposits of €20,000 had been paid in each case and contracts were signed in March, 2003.

Treasury has also taken court action against the Ireland and Munster rugby star Ronan O’Gara to compel him to complete the purchase of an apartment in the same scheme. It is understood that he is now in the process of wrapping up the deal.

A spokesperson for Treasury said yesterday they still had about 20 cases due to come before the courts where clients had paid deposits and signed legal contracts back in 2003.

Once the contracts were completed Treasury had proceeded to develop the apartments and now had no option but to sue for specific performance. They had made every attempt over the past 12 months to get the sales over the line and were going to court as a last resort.

Most of the 600 apartments in Spencer Dock were booked in a single weekend in 2003 when the scheme was launched off-plans. Many of them were bought by investors.

A new Luas light rail service recently began servicing the apartments.

About 30 investors who paid deposits and signed contracts at the newly-built Heuston South Quarter are also to be pursued through the courts by RCDL, the equal partners development company controlled by Rhatigan Developments and Goodbody Stockbrokers.

A spokesman said they had no option but to pursue those who made legal commitments two-and-a-half years ago on the advise of their solicitors.

The company was still trying to come to a mutually acceptable agreement with many of those involved but the bottom line was that they were legally obliged to ensure that the sales were closed.

More than 130 of the planned 300 apartments in the scheme have either been sold or offered for rent with an option to buy them after three years. The apartments have been renting exceptionally well because of their convenient location beside the mainline railway station and the Luas service.