Getting deposit back on new development condo

There are two options:
You need to get a lawyer, as there are complex legal issues that need to be reviewed in the offering plan and your contract. There are two options:
1. File claim with NYS AG - you need to determine whether Sponsor has fulfilled all required disclosures. Also, if first closing has not taken place within the first year budget in the offering plan, they must offer all contracted buyers the right to rescind. There is only a 30 day window for this, so you must be mindful of this deadline.
2. File suit under Federal Interstate Land Sales Act - This applies only for new developments of over 100 units where the Sponsor has not registred with HUD and complied with all disclosures.
You can check out nocondo.com for lawyers who handle these matters.
What building are you in contract with, if you don't mind sharing?

80 Riverside Blvd [Rushmore]

you should google that nocondo.com and the times article about all this

NoCondo.com is a skip.

This is asked so frequently here. Please search about getting your deposit back.

nocondo.com sounds like something that would be advertised on the subway like dr zizmor. but they are in all the articles that deal with this issue that you should read hence why i mentioned them.

there are tons and tons of threads on this on this blog as well as others. but has anyone actually had their deposit returned?? i have yet to hear they have
anyone had any luck?

Yes. For instance... me.

But, I wouldn't talk about it publicly.

tghe number of people who actually get their deposits back is very small.

and i'm guess one of the conditions is you don't speak about it. would that be correct

mdasch, you are my hero!!! Can you share any hints without "outing" yourself?

I also had my deposit refunded. Like mdasch, I don't necessarily want to discuss the details in a public forum. However, I think part of it was the Developer simply got sick of fighting with me, and wanted to be able to sell the place to someone else without having controversy hanging over it.

completely understand not wanted to go into details in a public forum... but any advice? is there a moment in time where you just say i'm not getting this back and should move on?

It depends on your situation - if you have any reasonable arguments, then I'd keep trying to get something back - even 50%. Anything is better than walking away with a total loss.

I read in a NYT article some developer in Chelsea offered to refund 20% of the deposit to people who couldn't close. I don't think any of these people had strong claims. This gives me the sense that a developer might be willing to give 20% back just to get rid of the headache. Better than nothing, right?

Can anyone discuss their experinces--positive or negative--with nocondo.com

or can anyone post any recommendations on nyc attorneys that are experienced at recouping deposts

People post this topic -- how can I get out of my deposit -- every few days. I feel sorry for people who may lose deposits, but ...geez...we are (in theory) a country of free markets and binding contracts among independent economic actors, and the idea that someone can get out of the contract (by whining to the attorney general or generating some disingenuous contract claim) because it turns out to be a bad deal is really an anethma to the whole idea of a free market with binding contracts. Developers were -- it's pretty obvious right now -- running market risk in developing a project. Would this person be seeking to get out of the contract if the prices in the building had gone way up?

This is all unfortunate. The alacrity with which people put down money way in advance of project completion was just another symptom of a wacky bubble. I do feel bad for them. I also feel, even worse,for someone who CLOSED on a bubble-priced unit any time recently (they do not even have the option of cutting their losses at the amount of the deposit).

Those SE posters who ridicule sellers trying to sell at peak prices (and protect their capital) are being inconsistent when they root for someone trying to get out of a peak price contract and get their deposit. The only difference between a peak owner and peak deposit placer is the closing date. (Yes, I do understand that there are sellers who are seeking to protect pure paper profits and we all feel less sympathy for them than someone who bought at the peak).

I only post this because the whole idea in this country right now that people should not have to live with the consequences of their own bad economic decisions sounds great...until you think about what it means for future economic activity. If you can get your apartment deposit back if a project goes bad, then you are getting a "free" call option on the property....but nothing is free.

jimstreeteasy- couldn't agree more.

I could be wrong, but didn't those developers need the early contracts to prove interest in the building so they could get the financing they needed to build the building in the first place. So they gave the buyers an inside price if they would agree to invest in the building without actually seeing the finished product. It was a kind of "leap of faith" for the buyers who were compensated with inside pricing. The developers got their financing, but in the end the buyers did not get what they bargained for. They put their money up front for units that have already depreciated in value and sometimes are not even built to the specifications that they contracted for, with common charges that have been kept artificially low to attract sales. So the developer got the financing and the buyer got left holding the bag. So, no, I don't particularly feel that the developer in this scenario is being taken advantage of. He got what he wanted, the buyer did not get what he was promised, and now has no recourse. In the future, buyers will not be so willing to buy into development projects until they are near completion, and the developers better have a proven track record for delivering the building they promised. I don't think the buyer understood the risks involved at the time, but he/she will now pay for their ignorance. Future buyers will be better informed. They may require even lower "inside prices" before they consider risking an investment in a new development. Just a thought from a newbie.

buyers got an inside price only in the sense that everyone believed the market was going to continue to rise so the earlier you bought (and that of course applied to everything) the greater your eventual profit. no, banks were throwing money around and did not need to see deposits; you are confusing that with the requirement for closing on the finished building.

trust me, the developer did not get what they wanted anymore than the fools who put the deposits down. everyone in this game is screwed.

hopefully, you are right about the future--it certainly will be years if not decades before people start up with this nonsense again.

>>They put their money up front for units that have already depreciated in value and sometimes are not even built to the specifications that they contracted for, with common charges that have been kept artificially low to attract sales.<<

Two different issues. If the unit does not meet contract specifications, then yes, that is grounds for deposit return. If, however, you're whining that the VALUE has gone down (along with that of every other piece of property in this city) well, then, no. You do NOT deserve, nor will you GET, your deposit back.

squid - exactly. sounds like a bunch of babies crying they lost money on the same investments they were crowing about 2 years ago.

it's not liek you would have let the developer put 'up' the price 20% more after you signed the contract now would you......

Dean

Interesting comments above

but i believe the person that started this topic was looking for advice on how to get out of a contract--you don't have the info to judge what his/her circumstances are

for example dean above "sounds like a bunch of babies crying they lost money on the same investments they were crowing about 2 years ago."
how do you know that this person didn't lose a job, or a spouse

if you want to pontificate in general on why people made mistakes and bad decisions why don't you start a different thread so you could jerk each other off over there

and please leave these type of postings for people that can offer help to those that are in a bad situation and need advice

thank you kiz

And I thank you Kiz...and I too have been "beat up" by these people. We just want to get information...that's all

If the condo went up 20% than the developer makes the profit he expected. If the condo loses 20% prior to my closing, am I just to quietly accept the whole loss? The developer is not giving concessions to the initial backers yet gives discount to new potential buyers. Does the developer DESERVE to keep my whole deposit? We'll see. I do know I made a bad investment and hopefully everyone in the building backs out of this bad deal! Remember buisness is business and buyer beware.

initial backers? you make it sound like you were putting up seed capital. you thought you were getting a good deal...unfortunately, you didn't. its not about deserve. either you have a contractual out or you don't. get a lawyer, not bunch of anonymous posters.

No one's "beating up" anyone. The topics mentioned are simple facts and relevant to the discussion.

Fact: Trying to reclaim a deposit simply because one doesn't like the current market value of the property = futile effort, regardless of one's circumstances.

Fact: Trying to reclaim a deposit because the developer failed to deliver the unit to the specifications spelled out in the contract is a worthwhile battle that will very likely be 100% successful.

Sorry if there's not a lot of sympathy for those who took enormous financial risks in an effort to get a 'deal'. We're all responsible for the outcomes of our choices.

again, not quite the sage advice i was looking for
i have started a thread for you to vent your anger, please use it

what advice do you want? a sure fire way to get your money back? it's not there. best advice has been repeated a thousand times: get a lawyer. i'm not angry that a lot of people made stupid deals...just tired of everyone who did wanting some magic formula to make it all ok. once again: get a lawyer.

Kiz, I think you are being a rather unfair here. Since when is it rude or personal anger to point out that a contract is a contract. The reason this discussion was relevant is that some people seem to want to discuss getting out of the contract in some kind of logic-vacuum where it is supposed to be somehow irrelevant that they signed a binding contract. To say, hey wait, you signed a binding contract, is exactly the response they will get from the developer, and probably their lawyer, so it is directly relevant to this topic. As I said, I feel sorry for anyone who got sucked in to this bubble, whether recent buyers or deposit placers, or even people whose employment going forward will be damaged by the downturn.

In some cases, people may have legitimate contract claims, so may they can get out.

and if you want to know if you have a legitimate contract claim, perhaps you might want to check with a lawyer? just as if you have a pain in your chest, you would do well to check with a doctor---not post a query at webmd.

Have you thought about keeping the property for now and renting it out? If you can be at breakeven after the tax break, then you may preserve your initial investment. It is a paper loss right now like most stock picks since October 2008. Real Estate will make a comeback in a few years. 20% is a big loss to take right now but better than the 40% in the stock market.

now there's some excellent advice for all of you...forget the lawyer...take the paper loss...oh, whoops, you'll be losing thousands every month as you try to rent out these white elephants. but, you'll save the $2k on the lawyer.

from the OP, it soudns like the buyer wants to walk specifically becasuse their cindo is worth less than when the bought it. If that is the case, the deposit is gone.

>>again, not quite the sage advice i was looking for
i have started a thread for you to vent your anger, please use it<<

Kiz, this is a public forum. If you don't like what you're reading on this thread, don't read it. If you don't feel you are getting the 'advice' you want, seek an attorney. An attorney who knows the specifics of your case can give you proper counsel; posters on a discussion board cannot.

jim--your right a contract is a contract but one has the right to pursue all avenues to find loopholes etc, as i'm sure you know many of these things get quite technical, for instance this interstate land sales act, who has ever heard of this--it seems not even the builders if, as some say, they violated it. As long as business has been done without just a handshake, people try to find ways of extricating themselves from deals that no longer seem favorable. It only seems logical that people will try to make every effort in this regard. I don't consider this whining, but if others do, and would just role over to receive the high hard one, well so be it

columbia--your point of getting a lawyer is well taken, we got that sometime between the 1st and ninth time you stated it. Some of your other points however are a little sketchy. So you are against this whole getting information from the internet thing? as for me, I have learned a lot by reading the many posts on this and other sites, including things that I did not get from my lawyers and agents. I think most people who come here would agree, and that many people in unfavorable situations use all the resources at their disposal.

And actually I guess we are in agreement on the lawyer thing, my first post was asking an opinion of the no-condo lawyers and if anyone had a recommendation on a good lawyer for RE contract issues. That is actually the info I am looking for.

Also to maybe give some insight to those not in this situation, it is not only the drop in value that is an issue for many buyers it is closing in a bldg that remains significantly undersold, to me that risk seems even greater than the drop in value if you were thinking in the long term
whatever one's issues are, i think we are looking for people's previous experiences, and things they have found helpful, as stated above it does seem some people have had success.

kiz10014, I agree that the greater risk is if the building will go undeer as opposed to the paper loss of the value of the property. I was recommending that if the cash flow equaled the rent, then howiemd may want to hold the property for the turnaround. Not believing in 2012 as the end of the world, we can agree that real estate in nyc will turn around within the next 5 years?

don't mind columbiacounty. He's likely just some old cranky guy with nothing better to do.

Kiz - if you want to see the legal filing by the nocondo lawyers, go to Citifile.com. They have posted the actual complaint to start the lawsuit against a couple of buildings, 20 Pine and District.

so...I assume you have a signed deal associated with your deposit? presumably, you reviewed this document with an attorney prior to signing? why don't you contact him or her? or no doubt you have either personal or business relationships who can point you to an attorney. my point above is that if one is faced with a serious issue (in your case presumably tens if not hundreds of thousands of dollars are involved) using the internet seems a little wacky. i can understand using the internet as a resource for entertainment, general information (perhaps about a restaurant or a consumer product)' perhaps it is my own lack of sophistication but i cannot imagine turning to anonymous strangers for information about serious financial or health issues.

look at this poster above---he has no idea of any of the underlying facts yet he offers some useless mumbo jumbo.

alpine--nothing to do? I'm here for info on a situation i am involved in.
What the f.. are you doing here? Just talking smack it would seem to me?

thanks maraman i will check that out

yes, obviously you have to sift through some stuff thats not particularly helpful, but nonetheless I have found some useful info. Like i said, it is one of many tools I would use.

easy buddy--he's dissing me not you.

oh got it
nonetheless, talking smack eh?

but...the enemy of your enemy is your friend.

What is a blog thread for if not to pontificate?

Back in law school, the "great minds" taught us about "efficient breach" - means not respecting the contract if that saves you money. Respecting this "principle," real estate contracts now typically have some form of "liquidated damages" (a contract term that specifies ahead of time the damages of breach by the buyer): forfeiture of the earnest money or, here, of the deposit.

Without getting on a high moral horse (and that's what efficient breach is supposedly about...), the deposit was supposed to give the buyer interest in closing. If courts let buyers off the hook when these provisions are in contracts, the contracts would be just about worthless.

As others have mentioned, if you want a case, you have to find material breach of contract on the part of the seller. In house-buying, this would typically be defects in the house that came up in inspection. Being cold-hearted, I'd quote "All The King's Men":

"Dig, you always find something."

Sponsors are rarely perfectly clean and they know it. Classic legal move: threaten a law suit and then make an offer. Or, once you've found "dirt", file a suit and get your money.

reminds me:

A man went to a brain store to get some brain to complete a study. He sees a sign remarking on the quality of professional brain offerred at this particular brain store. He begins to question the butcher about the cost of these brains.

"How much does it cost for engineer brain?"

"Three dollars an ounce."

"How much does it cost for programmer brain?"

"Four dollars an ounce."

"How much for lawyer brain?"

"$1,000 an ounce."

"Why is lawyer brain so much more?"

"Do you know how many lawyers we had to kill to get one ounce of brain?"

or alternatively:

" The devil visited a lawyer's office and made him an offer. "I can arrange some things for you, " the devil said. "I'll increase your income five-fold. Your partners will love you; your clients will respect you; you'll have four months of vacation each year and live to be a hundred. All I require in return is that your wife's soul, your children's souls, and their children's souls rot in hell for eternity."

The lawyer thought for a moment. "What's the catch?" he asked."

>>alpine--nothing to do? I'm here for info on a situation i am involved in.
What the f.. are you doing here? Just talking smack it would seem to me?<<

And this from the numbnut pontificating about anger issues? Priceless. Gotta love this board...

Why do you love it? So you can call a person names from the safety of your own computer?

Kiz - just curious, what development were you in contract for?

80 metropolitan

I love it because it is never fails to entertain.

"start a different thread so you could jerk each other off over there"

seems like you enjoy working from the safety of your computer as well.

Kiz - they have over 100 units. Did they register with HUD and give you a property report? If not, you can demand recission of your contract within 2 years of signing and can commmence suit within 3 years.

"alpine--nothing to do? I'm here for info on a situation i am involved in.
What the f.. are you doing here? Just talking smack it would seem to me?"

I said columbiacounty has nothing to do, not you. Unless of course your one of columbia's multiple aliases and you forgot to log out of your second account before you responded to me. BUSTED!

i don't know about the multiple personality thing, but i read it in haste, my apologies

I am not aware of a property report, but they did register the plan as effective with the AG, and the plan is to start closing in 1-2 months

Just wanted to share my story...I was able to get my deposit back this past fall along with the majority of buyers in a building. Signed in the summer of 2007 just before signs of banking problems started to surface but despite the downward trends, we really wanted to buy the place we were in contract for. Our offering plan said it would be completed in Sept 07 and we already knew they were behind because we were told q1 '08. There was a stop work order and numerous delays, poor communication and estimated closing changed so frequently. According to our offering plan, if they didn't acquire the TCO and one unit didn't close within 1 year of 1st yr operating budget, we could get our full deposit back. (i believe a couple of units that went into contract much later did not have this right due to amendments)

So we exercised our right, along with the majority of the other buyers, to get our deposit back - not because the market was tanking but because we really did not know when the place would be finished. Our lives were greatly disrupted as we tried to plan our move over and over and over. The people involved in the project knew our disappointment and tried to get us to reconsider, but they also knew we had our rights. A letter was sent to the AG and to all the buyers stating we had a 15 day window to make our decision (also stated in offering). We got our deposit back after some delays due to sponsor lawyer switching firms and escrow bank change.

Howie - Why wouldn't you have your lawyer that got you into contract help you get out? Also, have you checked to see if there are any out clauses in your offering plan similar to ours that could give you a definite out?

Anyway, I don't know how difficult it is to get out of a contract if you don't have something in your plan that could get you out at this point. I know I did a lot of hunting on here and other sites when we were going through this, but in the end we had our rights spelled out and fortunately we did not have a huge ordeal to get our money back. Meanwhile, the building is still not finished and the few people that did not rescind may find themselves in pickle once they can eventually close.

still_in_contract, what other sites other than Streeteasy did you find that were helpful?