Brompton Buyers are Organizing

On what ground? If this were to be successful, then I would go to my 401(k) manager/trustee to ask my account balance to be restored.

There is no incentive for the developers to cut prices for buyers already in contract... I think they would gladly keep all the deposits and sell the units at full price minus deposit

There is going to be alot of inventory on the market...even if they keep the deposits.

I agree with bds. There is no sense in having tons of inventory on the market. If they have qualified buyers already in contract it makes sense for the developer to work with them, instead of trying to find new buyers in this market.

http://finance.groups.yahoo.com/group/bromptonbuyers/

They ahve no incentive to work with anyone on price. If word got out that they are renegotiating with buyers under contract, every single buyer will demand that same thing and it will be a nightmare for them. Plan on them calling your bluff -- decision will then be whether to walk away from the 20%.

Does anyone know if there is any precedence for developers working with buyers already in contract on pricing?

This is crazy! These are the morons who lined up to buy an even then overpriced apartment, which was not even built yet. They knew it would take time, and guess what, market can go up and down over time.

IF THE MARKET WENT UP, SHOULD THE DEVELOPER GONE AFTER THE BUYERS FOR MORE MONEY?

Exactly, A contract is a contract. It cuts both ways.

Actually the developer would go after buyers in the form of increased common charges that could be used for "supplies" "consulting" and other things that aren't easily checked

I would be pretty bummed too if I was paying way too much now, but I doubt the developer of 15 CPW thought about renegotiating the contracts when it was obvious lots of the initial buyers would flip their apts for huge profits right after closing. Unfortunately, it is a huge risk to sign a contract on a place that will not be ready for 1-2 years. Hope it all works out for the buyers though.

They buyers have a right to renegotiate. It's not like the contract says they have to buy. It just says that if they walk they lose their deposit. So developer has 2 choices.
1) Renegotiate contract (buyer also needs to agree to this)
2) Follow contract and collect the 10%.

Right, the developer is under no obligation to renegotiate anything. A real estate agent told me a story once about getting a call from a loan officer. The rates had gone up and the loan officer was upset about the loan he had made to the agent's buyer. The agent told the banker in no uncertain terms that he was sticking to the deal, as he would not have given anything back to the buyer if the rates had gone the other way. End of conversation.

Don't listen to the guys who say the developer has no incentive. The way the market is, and the direction it is moving to, they may have an incentive. Yes, it would be unusual, but there have been many threads here in Streeteasy concerning people in other bldgs. (District, 20 Pine, 15 Broad, etc) who were either walking away or trying to negotiate with developers. With a contract signed you're not in the strongest position but, hey, they aren't either. And, then, the value of those apts. is now way more than 10% below and going down.

There is definitely some precedent here:
http://finance.yahoo.com/news/Millennium-Partners-Announces-bw-14336566.html

SAN FRANCISCO--(BUSINESS WIRE)--Millennium Partners, developer of Millennium Tower, the 60-story, ultra-luxury residential tower opening mid-April 2009 in San Francisco at 301 Mission Street, recently announced a 15 percent price adjustment across the board for new buyers and buyers already in contract.

“Everything Millennium does begins and ends with our buyers,” said Richard G. Baumert, managing director for Millennium Partners. “To ensure the continued success of our project and protect the investment of our buyers, we have determined that the appropriate thing to do is to provide the price adjustment both retroactively to our owners who have already executed their contracts as well as to our current prospects and future buyers.”

Millennium Partners has closely monitored the real estate market conditions as the current economic downturn has accelerated, and has acknowledged the shifting market by revisiting its original pricing structure. By taking the unprecedented step of offering the same price reduction to buyers already in contract as to new buyers, Millennium has ensured that the early adopters of the project would not be penalized for buying during better economic conditions.

Since announcing the price reduction, the Millennium Tower sales office has seen a significant upturn in visitor volume and several new buyers have entered into contract. Extending the offer to existing owners has also been met with a combination of delight and surprise.

Banks are generally not lending on new construction with less than 51% signed contracts. If in-contract buyers walk and the % drops below 51 there will be no new buyers unless they pay cash.

Shapeshifter -- This is a different situation. That building was mostly unsold and so they knew that only way to sell was to lower prices, and to avoid making a small number of people who already bought go crazy, they agreed to lower across board for everyone. Brompton is fully sold. Are people really going to walk away from 400k deposits? No way. And if they do, it will be a small enough number that developer can take the money and sell or rent the units.

meant mostly sold

Someone (407PAS) who says "a contract is a contract" doesn't have any idea what a contract is. A contract sets forth parties' expectations, and sets forth what will happen if they do not fulfill the expectations.

In the case of a buyer who signed a contract on a unit that has declined 20% in value over the past year, they can walk away from the deal and lose their 10% deposit. This would make good financial sense, and the Developer would be short-sighted to simply pocket the 10% and put the unit back on the market. That would make no financial sense. Therefore, if both parties are sensible, they will negotiate a new price.

As a lawyer, I see this happen in every business context imaginable, including real estate. People default on contracts all the time, and the other side comes to the table to work something out. Saying "a contract is a contract" is nonsense.

A lawyer is on here telling everyone that saying a contract is binding is nonsense? That is what I meant when I said a contract is a contract. Something just sounds wrong. There are contracts and then there is breach of contract, I never questioned that. A developer has every right to avail himself of the punitive nature of the contract, if the buyer is in breach. He doesn't have to work anything out with the buyer if he does not want to. It seems like these buyers expect the developer to just tear up their contracts because of the way the market has gone and I am just saying that that might not happen.

What if we introduce another scenario. What if a buyer puts a clause in the contract that says there is no mortgage financing contingency. I agree to that and sign the contract. Now, through no fault of my own, my bank walks away from the deal two days before closing and I am unable to secure alternative financing. Am I not at risk of losing my deposit? What compels the seller to negotiate with me? Is it not likely that he will just take my 10% and re-list or stay in the apartment?

Sorry, I meant a seller puts in a no mortgage contingency clause.

407PAS - "a contract is binding", sure. But what does that mean, in practical terms? It means the non-defaulting party has certain remedies, and certain leverage against the defaulting party. But the defaulting party often has reality on their side.

I see this every day in my line of work!! If you owe someone money, and you can't (or won't) pay, then often the best choice for the other party is to re-negotiate terms (i.e., settle). That's reality. Everyone should do a cost-benefit analysis, and decide whether breaching a contract has more costs or more benefits. In my view, if you signed a new-development purchase agreement a year ago, defaulting probably has more benefits than costs. The cost of going forward on last year's terms could be much higher than your 10% deposit. And from the Developer's perspective, does it make sense to put the unit back on the market, and sell it 6 months later for 20-25% less? That's just dumb! The sensible approach for the Developer is first, call the buyer's bluff, but if the buyer stands firm and refuses to close, then the most sensible option is to re-negotiate terms to something that both sides can live with.

As for the scenario you mention - where the lender backs out at the last minute - it's the same as any other scenario -- the parties need to do a cost-benefit analysis. Does it make sense for the Developer to pocket the 10% (and, frankly, there could still be a legal battle over the deposit), or does it make sense to negotiate - if possible - to create terms where the buyer can get another lender? Of course, I believe negotiating is the best answer in this market (assuming the buyer has some chance of getting alternate financing - but if not, then the Developer should take the deposit, and hope to find another buyer, but this should probably be the Developer's last resort, and everyone loses in this scenario).

pjc - exactly.

I used to live in the neighborhood of the Brompton - cannot believe the outrageous prices that were asked and actually PAID for that neighborhood! It commanded the lowest rents in "prime Manhattan" and was even more overpriced than some of those already overpriced buildings in better neighborhoods downtown. Yes, a contract is a contract and I just have to ask how you were naive enough to buy in a building where you are likely to lose 80-90% at 1300-1800/sq ft in the UPPER 80s!!?!! Glad to get some of the excess money out of this market, but this one was a pretty obvious loser to anyone who knew the neighborhood.....

Thank you for agreeing that a contract is binding. You had me worried there. My second scenario had nothing to do with a Developer, I was talking about buying from an individual, in a private sale. I have absolutely no interest in tangling with developers in this city.

Anyway, sure, I understand your argument. Unfortunately, you have not convinced me that I am not at risk if I sign a contract that does not contain a mortgage contingency clause. I think I am still at risk of losing my deposit, therefore, I will not sign such a contract.

Lawyers profit from more conflict. I am not looking to get into some lawsuit over a deposit, for I would wind up losing 25% of that deposit in legal fees, a waste of money, in my opinion.

407PAS - I never tried to "convince" you that you would have no risk if you sign a contract without a mortgage contingency. That's ridiculous - OF COURSE your deposit is very much at risk if you don't get a mortgage contingency clause - it's crazy to sign a contract without that.

Sure, you might get some deposit back and/or re-negotiate terms if the lender walked, but I would not count on that going into it. However, that is a different topic altogether. This thread was about people who already signed contracts with prices that are way too high for today's market, and what might happen if they bail out of it either by choice or due to lack of financing.

This is so pathetic and ridiculous !
MAV said it : IF THE MARKET WENT UP, SHOULD THE DEVELOPER GONE AFTER THE BUYERS FOR MORE MONEY?
People get a grip

dryships (and MAV) - that is just silly. Developers and Buyers have different types of leverage. If the market went up and the Developer breached by refusing to sell to the Buyer, and ends up selling it to another person, they will have a serious lawsuit on their hands, and probably have to fork over their wrongfully-obtained profit to the Buyer. In addition, assuming they had another unit in the building, they would be happy to sell unit 1 to the first buyer (for cheap) and unit 2 to the 2nd buyer (for more). They are simply not incentivized to lose deals, even when the price is going up.

Whereas, the Buyer is in a very different situation - when the price goes down, his maximum loss is the 10% deposit, and his gain could very well be avoiding a life-changing loss or bankruptcy.

The motivations and the leverage are simply not the same between Developers and Buyers.

pjc,
Thanks for the additional explanation. You are right, of course, with regards to the different circumstances for buyers and sellers in up and down markets, when dealing with developer units and the deposits on those units.

I am sorry that I changed the topic to one closer to my heart, the mortgage contingency clause in standard non-developer sales contracts. I am glad to hear that you agree with me that it would be crazy to sign a contract without a mortgage contingency clause. Funny though, I bid on a place where the owner would not give me a mortgage contingency. Even though I have impeccable credit, I took it as a sign of bad faith that the owner would not yield on this point so I bid low and we never came to terms. In retrospect, I am glad that we did not buy the unit.

While there are contractual arguments that support Related's tough stance, I think that Related may be blindsided by the fire storm that is brewing. Surely the cost of creating badwill is greater than keeping deposits or collection delay to close fees.

Related does not appear to value their brand equity by failing to extend any sort of goodwill to their clients during these extraordinary times. The future implications of clients having a negative image of Related is huge. Who wants to deal w/ an arrogant counterparty who refuse to acknowlege that these are difficult times? Who wants to be in a relationship w/ a counterparty who you can't trust to understand their clients' interests? There are ANGRY people out there - not b/c of buyers remorse, but b/c they feel a sense of injustice. The Millenium's actions are in stark contrast to Related's - the quote in the article that someone referenced from R. Baumert is exactly what people expect property developers should be doing in this environment. If Related doesn't give some concessions, they will leave such a bad taste in clients' mouths. When these clients need to rent/buy another place, or when their friends want to deal w/ a property company, they clearnly WON'T say good things about Related. It is hard to quantify and overcome the negative opinion that is catching on virally in this case. This is developing into a sensational story - not the type of buzz anyone wants.

As uwsmom said:

Manhattan RE is a big, complicated bitch.

or something like that.

I'm not so sure Related is actually getting a lot of bad press on this. I went to the yahoo board and
there were people saying things like "the lobby came out great!" and "sure I paid too much but I loved my apartment when I saw it." I don't know who these people are that don't care about money but they're not helping. The way Related would look at it, if they did something for what seem like just a few malcontents they would then have to give money back to all these people who don't seem to even care.

I agree somewhat with dmeistreg above - but it is, nonetheless shortsighted for Related to say we delivered what we were supposed, and we're not going to consider the cost of an intangible called goodwill. Also, heard that the bad press is coming, stories are being written as we speak.... Columnists love this stuff - NY Post, Real Deal, NY Times.

I still wonder what would have led anyone to buy these INSANELY overpriced, not even yet built apartments when they did?! They were CRAZY overpriced for the area to begin with and were not even finished!?! What were you thinking?????????

can anyone tell me what they were thinking making this insane purchase?

I think Related would be wise to offer some concessions. I see on Streeteasy.com that they still have about $43 million of inventory left to sell and many of these units have been on the market for over a year. If current buyers threaten to walk, and supposing that there are about 20 thusfar organizing, and that their average purchase price (conservatively) is $2 million, then there is another $40 million of inventory coming back. If Related keeps the 20% deposit, they pocket roughly $8 million which is nice, but that hardly covers the annual interest on their construction and project loans for a year. So, they either absorb the forfeited deposits and spend another year or two or three trying to sell now $80 million of inventory in a horrendous market or, they make sure they try and clear their books and pay off their financing on schedule. Related is obviously very large and well financed but they are out to make profit, not carry a lot of inventory. There have been numerous price hikes for the building over the last couple of years and thus the return they are making is already extraordinary and thus a concession of closing costs or more is hardly unreasonable if it helps keep contracts moving to closing.

It's an interesting point. Obviously, if they could resell immediately for 80%, it's worth keeping the 20% deposit and reselling to someone else, rather than renegotiating and selling for 95%. Of course, if they can't resell now for more than 70%, then it may make sense for related to renegotiate (effectively, the purchaser, by paying 20%, has a call option at 80% - sellers can credibly threaten not to exercise this option if the value of the apts is below 80%). All seems to depend on how much the value of these places has dropped.

Nothing has gone to closing in the Brompton (Or the Lucida for that matter). At this point, Related cannot re-negotiate some contracts downward. It's all or none at this point. e.g. if 22A is re-negotiated lower than 18A then 18A won't appraise at its contracted price. The buyer will need to come up with the difference between the appraised value and the contract price. Maybe some buyers can do that. Not all can. Some may choose not to. This virus is very catchy and Related in very short order would need to re-negotiate every deal. Not happening.

I watched WCI come unglued this way in Florida. They did everything they could other than lower the price of the unit. They threw in appliance upgrades, then granite and marble upgrades, then golf course membership dues, then golf course memberships, then the membership and 2 years of dues. Anything to avoid a lower contract price for the units. The appraisers are much more focused on price per square foot than on the stainless refrgirator or the granite countertops.

As we all know, Related just killed it with 15 CPW. I would not expect anything in the way of concessions. Those who are unhappy with their deals need to look for other outs. Related missing the delivery deadline would be the easiest. Mortgage contigencies would be another of the the easier ways out. Less income or loss of employment would do. I know someone a while back who forged a letter that they had been laid off in order to get their deposit back and get out of a bad deal. Unethical yes. But if you think you are at war... Hopefully you all had mortgage contigencies. Unfortunately, this is a condo so you can't blow the board interview on purpose.

Has anyone backed out yet?

jake, 15 CPW was Zeckendorf

I have hear they have already started closings and several units have already closed.

This has been an interesting thread. I'm in contract on a condo downtown and I have been stressing about whether to move forward or not. Today I told my lawyer to tell the developer that I will not be showing up at the closing next week unless there are some meaningful price concessions. They are going to do it eventually and I don't want to be the last one in paying a 2007 price. We'll see. From this thread I understand that the developer is also in a tough situation and so I'm not expecting much, if anything, at least at this time, in which case I'm prepared to walk.

raju, there are a lot of people that are in your position...at some point, we "potential walkers" have to affect the developer

*UPDATE* If you are a contractee at the Brompton and are interested in joining the group, please contact:
Adam Leitman Bailey
Adam Leitman Bailey, P.C.
120 Broadway, 17th Floor
New York, New York 10271
Tel:212-825-0365 x 1952
alb@alblawfirm.com
www.alblawfirm.com

Excellent attorney choice...if he can't get you out no one can...his pitbull reputation alone should get you a concession

My daughter just closed on an apartment in the Brompton. I can only say that the building is absolutely beautiful. The apartment is fabulous (everything delivered as promised) and the staff is one of the best that I have seen in any residential building in manhattan.
For all of you who are sorry about your purchase, I think you need to "snap out of it" and enjoy what you have.

Did related offer your daughter any concessions due to the fact that her apratment is worth a minimum of 20% less than what she paid for it?

StellaBlue, you are pathetic. Why would Related offer her a concession? When prices were going up, buyers were not paying extra to the developer either. You are an adult. You made a wrong decision and now you have to live with it.

Uppereast- why did Millennium offer anyone who is either in contract or previously closed a 15% price cut? Was it the kindness of their heart? Are you saying that other developers are not offering concessions to buyers in contract?

It is annoying that buyers would take price increases happily but are now crying wolf because their bet didn't pay off. You decided to put down a deposit, you made a wrong decision. Now it's your problem.

I don't understand that argument. Millennium is in San Francisco,and desperate to drum up sales to repay their loan, how is that analogous? Brompton is 90% sold and many of you got per-construction prices that are still a good deal today.

Its going to be the developers problem pretty soon as well. http://www.nytimes.com/2009/03/01/realestate/01walk.html?ref=realestate

And FWIW, I have already decided to walk from my deposit without concessions. No reason to throw good money after bad. More and more buyers are coming to the realization that they face very crooked math. I just hope the developers who offer nothing feel the pain as well. I hope at least 40% of the buyers in the Brompton come to the same conclusion and from what I am hearing thats conservative. I wish Related luck trying to get 2008 prices (or even 2008 rent prices) anytime soon. If Related can incentivize people to close, both parties win.

PS- I paid 2.6 and my deposit is 20%.

uppereast - your argument does not take into account the economic environment - under normal circumstances, I would agree with you, though clearly developers could be in serious trouble (case by case basis, of course) in this enviroment hence the likelihood that they would make concessions (when this would have been unprecidented in the recent past).

stellablue's point, I believe, is that business is business. all's fair in ups and downs, and all that. it's a game, just like businesses play all the time. they may have agreements, and then decide they don't like them or won't go through with them because some adverse condition occurred (which may be covered in a contract, but may not) and then say, so sorry, we'll have to walk under these conditions, despite money already committed up front. At which point the other party has the option of saying see you later, sucker, or let's go back to the table and see what we can hammer out. it's no different, and why should it be? you, as a purchaser, have determined that this does not make sense and you'd rather walk, but might be persuaded not to for the right concessions. the developer can always say no and keep your deposit. game of chicken, so far the developers have been winning, and frantically trying to keep control of the game, but who knows where this game is going?

btw, just wondering what you think the poor suckers who have contracts at 5th on the Park should do? Still 60 or so units unsold out of 160, and the developer goes tits up, but says that things are grand in the building and closings are scheduled to start in April. Does being an adult mean you shouldn't expect your developer to remain extant after closing when there are 60 units unsold? To extrapolate, who knows what the financial condition of these other developers now looks like.

Aboutready- you said it far more eloquently that I , and without resorting to calling me "pathetic" like uppereast. But then again, anyone who spends any appreciable time on SE has come to expect that out of him/her.

I have said before, I am fine if someone walks and leaves their deposit. What I am saying is that only because the market has dropped, prices don't need to be adjusted. Because the risk then would always be with the developer (prices go up, they don't get more, prices go down, and they need to give money back). That's all I am saying. Stellablue, throwing away $5ooK is a lot of cash, why don't you move in and enjoy. If you can stay for 5 plus years, you probably will get out OK. After all, it's a very nice area of town.

manhattan jb -
Jake says:
report abuse Nothing has gone to closing in the Brompton (Or the Lucida for that matter). At this point, Related cannot re-negotiate some contracts.

So if Jake is correct I don't think you have a daughter that closed on the apartment. Perhaps a broker trying to talk up the building??

Jake any records of closings?

Uppereast- I have other reasons that I am not comfortable sharing in an open forum but I don't disagree with your logic. That being said, I will gladly enter a game of chicken with them as I am not bluffing. I came to that sad conclusion about a month ago...

uppereast, you can't force developers to reopen negotiations. they can feel compelled to do so by certain circumstances, but that's their side of the game. they don't have to do it. the point is they may feel compelled to to sell their units. everything's about timing.

Another thing- depending on who you want to believe, we are either A)already in or B) soon to be in a Depression. If you think its bad now, wait a year. If I were Related (or any other developer for that matter) I would not want to be in position where I am sitting on any unsold inventory in that environment. Thats why concessions make sense- they actually benefit both parties. I don't know why people are failing to grasp that. This isnt a case where a bunch of (formerly) wealthy buyers are just sitting around whining and stamping their feet.

Stella- you should contact Adam Bailey, the attorney for the group seeking concessions.
Adam Leitman Bailey
Adam Leitman Bailey, P.C.
120 Broadway, 17th Floor
New York, New York 10271
Tel:212-825-0365 x 1952
alb@alblawfirm.com
www.alblawfirm.com

If sufficient people walk, Related is looking at an auction to cover their naked long position in a declining market. If the auctions come at 50% of 2007 peak pricing, they are in a world of hurt. They will attempt to negotiate something _ever_ _so_ _quietly_ so as not to influence their mark to market, thus forcing them to take the hit.

Just remember - check raising in poker is also "unethical".

stella, we are not in a great depression, nor do I think we will enter one. You sound very depressed. Take heart,things will get better again.

ncy10025,

Looks like closings have started at Brompton which was not the case when I posted 10 days ago.

Something else to think about though. Related has 3 high profile NYC projects all getting ready to go to closings around now. Brompton, Harrison, Superior Ink. (Are there others?) In the vicinity of 100 units at each development and average prices in the $3,4,5 mm range. Call it $3.5mm average.
That is, they have as much as $1BN worth of closings in those 3 buildings alone in the coming months. Negotiate with 1 buyer and you are soon negotiating with all buyers. Make a deal here, a concession there and pretty soon you cost yourself $100mm. The magnitude of this problem is enormous.

StellaBlue - where do you get your info? The apartment is not 20% less. Actually apartments have been appraised for the price paid in the cases I know about. And even if it looses some value in the short term, it will rebound. In the meantime, you can live in a first-class building with wonderful amenities, a number one school district, and a great neighborhood.

And nyc10025 I am not a broker. I actually live in another Related building and have been extremely happy. I expect no less at the Brompton - one of the benefits of going with a builder that has a solid reputation. As Jake already admitted, closing have begun and my daughter was the 4th to close. I know of two others closing in the next few weeks.

can anyone say appraiser fraud? i wonder what jonathan miller would appraise these for. the pricing was very ambitious even for the top of the bubble.

StellaBlue,
I won't call you names, I feel bad for you. I know that people are predicting drastic price reductions in Manhattan. We know you paid 2.6 for this place but we don't know anything else about what you're trying to buy. Have you sat down and looked at other units on the market to get a sense of what it would cost to replace your unit? I know nothing is exactly comparable but I think this would be an interesting exercise.

If, at the end of the day, you feel that even with the loss of your deposit you will get something better, somewhere else, for a lot less, than I guess you walk. If not, then maybe you close, and hold on to see what the future brings. Just a thought.

manhattanjb- its great to know that the Brompton is immune from dramatic price reductions taking place all over NYC. Perhaps I will close after all and flip my unit for a quick profit? After all, according to you your daughters place is worth exactly what she paid for a over a year ago.

StellaBlue - stall Related as much as you can, talk to the lawyer for the other people, ask Related at last minute if they will deal. But bottom line, if you can't do anything, walk. Sometimes a bad trade is a very valuable lesson (had my fingers burned too).

nyc10023- thats my plan. I refuse to throw good money after bad in a declining economy/market.

Hi. How can I contact actual members of the group repped by Bailey? I do not have a Yahoo account. I bought in 2007 at the Brompton and am selling now -- not the best trade and would love to join the block...

StellaBlue, why don't you hang in there and sell after a few years? I wouldn't throw $500K away...

jennypenny - your post seems disingenuous at best. closings just started at the Brompton. if you wish to "join" call Bailey's office.

aboutready that is so funny. If that is what it is at its best what would you call its worst? This is a real question ...

Sounds like the law offices of Adam Leitman Bailey will make a nice retainer fee for little work as there is little they can correct legally. As long as the contracts are valid, the purchasers have no claims. Anyone know how much Bailey is charging the group?

Upper- becuase in this new market for ~2MM I could buy a place that thats larger, has a better layout, has better fixtures and has similar amenities.

streetview: I certainly hope he's taking it on contingency, and will only recover if he gets some concessions. Otherwise I don't think he should be taking these people's money.

Are you sure, StellaBlue. Have you actually looked at apartments and submitted bids?

Plus if you hold on and wait 5+yrs, you might be able to recover the money. If you let it go now, it's gone.

Uppereast- I cant decide if you are genuinely concerned for my financial well being or you work for Related :-)
If its the former, I sincerely appreciate your POV.

StellaBlue - did the Brompton breach any of the ILSA ("Interstate Land Sales Full Disclosure Act") requirements? If so, you may be able to get your full deposit back. Have you checked with no-condo.com?

If possible, I'm thinking of going with them. Having to pay them 1/3 of my deposit fee sucks, but it beats losing 100% of it.

User name created in an effort to find some common ground and cheer up the disgruntled one. We all get it. You made a bad decision and you're unhappy. Have a drink, go on vacation, but one way or another might be time to give SE.com a break. You were on the verge of buying a 2.6M apt. Life can't be that bad.

FWIW, I close at the Brompton in two weeks, I've already had my walk through and the place looks incredible.

whathappened: Usually contingency fees are used if there is some tangible value (i.e. cash) coming back to the afflicted (the purchasers). I suspect if the purchasers were to prevail (unlikely), there is no cash, just a reduced cost. If lawyers don't see cash, then they bill. And bill they will if they sense emotion is getting the best of reality.

streetview: wouldn't the cash be the deposit? That gets locked up (unrecoverable) once a dispute is registered with the AG and is held until the AG rules. I believe no-condo.com does work on contingency which is a good sign if they take one's case because that means they think they will win. I have heard of others going with hourly attorneys, as well - some great and reputable attorneys just prefer to work on an hourly basis. I have also heard there are several missteps the developers can make that give the buyers opportunities to submit winnable arguments to the AG. I wouldn't be so sure that the developers cases are ironclad - not to mention all of the arguments set forth above (now I sound like a lawyer) leading to the fact that the developers are facing an environment unlike any they have seen, which likely compels them to negotiate even signed contracts.

I think you believe this is like a tenant lawyer advocate case (where the lawyers will work on a contingency basis). Different circumstances since the purchaser does not have possession of anything contractually that could be used as leverage for a settlement. Sure the purchaser can argue the unit is not perfectly delivered, but the original contract of sale was written by the developer, probably with a lot of leeway.

No, all I am saying is that the contract holder can file with the attorney general for a "determination on the disposition of down payments" - most offering plans have this form right in the plan. So, the buyer is going after their down payment. There could be a variety of reasons the AG would rule in favor of the buyer, even in seemingly "ironclad" new development contracts. It all depends on the particulars, of course. And, of course, the buyer could choose to litigate in lieu of or in addition to going to the AG.

The AG who most likely will run for governor wants to p!$$-off the real estate interests in NYC by siding with buyers who are unhappy about decisions they themselves made. Hmmm.

streetview - what are you saying here - are you being sarcastic? Please explain/clarify. Also, what were you saying about "no cash to recover" a few posts ago? I understand that you feel contract holders should stick to the terms of the contracts, though do you see there are other options? As you stated, developers do not have to negotiate after a contract is signed, though some are now - how do you explain that?

i think the word you're looking for is irony.

which goes hand in hand with what many others have already said here---everyone who put down a deposit did it thinking that they were being smart financially and getting a deal.

now its not a deal and they want to rewrite it. no doubt i am hopelessly out of touch but i could not imagine buying an apartment that wasn't built without significant control over the construction process. the only reason that people did was that they thought they were beating the system.

good luck.

Columbia- I disagree with the statement "everyone who put a deposit down did it thinking they were getting a deal". Plenty of people put desposits down becuase they thought they were buying an amazing home from a highly regarded developer. That is still the case, but the world is a DRASTICALLY different place than it was 14 months ago. Income is down, credit is about 10x harder to come by and the thread of losing your job is entirely real. If you believe the NY Times, things are actually going to get worse. I know there is little sympathy for people who can (or at least use to be able to)afford in a bldg such as the Brompton, nor should there be. That being said, Realted's tough stance will eventually come back to bite them when over 30% of the people in contract dont close. That's not a threat, its reality. Other developers are offering concessions; at this time Related has chosen not to. It will be an interesting game of chicken to say the least.

columbia, the contracts were given with very little ability for change. take it or leave it kind of stuff. obviously people should have left it, but alot of people signed over a year ago, some over two, and everyone was still saying there wasn't any chance of the Manhattan market tanking. Wrong, and stupid, but only in hindsight to most.

I don't think everyone was looking for a "deal," or "trying to beat the system" many were looking for a place to live. No, they didn't have to buy new construction, it's always risky, but it's really just a matter of timing and luck. If they had bought in a building that closed by 2007 they might not have been in the best of shape, but the building probably doesn't have extreme financial problems, the developer probably doesn't have any or very few units left, etc. Now people aren't just worried about the value, they have to worry about whether buildings and their developers for that project will make it. How much common charges may go up. Not to mention the fact that many people simply can't get the financing that they were assured of getting back then.

but what is your point? what would you do if you were the developer? how much of a concession do you offer? do you do it across the board? do you offer on a first come, first served basis? supposing you offer 25%--some take it but not enough? others demand more? unfortunately, the developer is as boxed in as the people who put down the deposits.

playing chicken is not fun and never profitable.

Columbia- thats why concessions in this instance are mutually beneficial. I dont know what the number is, but something is better than nothing. Thats why its called a negotiation.

of course you didn't answer my question.

what would you do if you were the developer? how much of a concession do you offer? do you do it across the board? do you offer on a first come, first served basis? supposing you offer 25%--some take it but not enough? others demand more?

i'm not trying to give you a hard time--i'm suggesting that you take a look at this from the other side of the table. at the very least, i would suggest that if you do try to organize that you do it around an agreed upon concession, ie. we represent X purchasers all of whom have agreed (how to actually enforce i have no idea) to close if you make Y concession. stop the threats and start looking for mutual benefit from an awful situation that is no one's fault.

Columbia- How could you possibly expect me to answer what the developer should do without seeing their financials? I know my financials and I know what makes the most sense for me. I have no clue how many units Related needs to close in order to make their money. If they can rent them out, or they have reasonable assurance that that 80% of the people in contract will close, then I wouldn't offer people a single thing. I'd gladly take their deposits. Not sure how you expect me to reasonably answer that question.

its not about their financials...its about their assessment of the current market vs. the near term. don't you see that they have the same problem that you do? they have no way to know how many people are going to close or what it would take by way of concessions to meaningfully increase that number.

you're waiting for them to make a unilateral move down...absent any real information, why wouldn't they be best off holding the line, pocketing the deposits, and see what happens. obviously that could be a big loss for them but significant unilateral concessions on their part that didn't result in significant sales would be even worse.

If people walk en masse and related keeps their deposits, everyone loses.