The stage: A million-dollar condo in one of the top pre-construction developments in South Florida, a high-rise oceanfront luxury building on a prime Beach location.
The complaint: Buyer signed a contract and paid the deposit. A few months later and well before scheduled completion, he is given notice of certain modifications to the building. The most significant was about the private elevator to his unit. The developer is now announcing that the private elevator will be shared between two apartments.
Other changes imply reduction of certain amenities areas.
The buyer wants to cancel the contract and get his deposit back alleging that the changes will substantially decrease the value of his condominium unit in this ultra-luxury building.
The developer does not agree, stating that the proposed changes are not material or substantial and would therefore be allowed by the contract. It is not refunding the buyer’s large deposit.
Two years ago, it wouldn’t even have been an issue. The buyer would reluctantly agree to the changes since his contract would have meant a couple of hundred thousand dollars profit by just “flipping” it to one of the dozens of eager investors on a waiting list.
But this is 2006 and things have changed a lot. Developers cannot find that waiting list anymore and investors are leery of the market’s future.
The case is in its initial phase.
It is not a really unusual situation and I wouldn’t have pointed it out but because it is illustrative enough of how the market has changed.
What is your opinion and what is your prediction of the outcome? I would value your input...
Please visit my website: http://www.condo-southflorida.com and write me with your comments at: hbnathan@bellsouth.net
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