Developer trying it on

Posted by Saikunga (416 days ago)

I need some guidance as to where to get help if it is possible.

We bought our place in a 'village house complex' or a villa. It is 20 years old. There are 36 houses in the complex.

When we bought, the developer decided that she wanted to sell all the common areas of the development back to the owners - includes the pool, common access areas. She also wanted to sell individual car parks to each owner. All of the owners would buy a share of the common areas and form a Deed of Mutual covenent. This DMC should have been formed 20 years ago when the complex was created, but the developer happened to miss that part out of the transactions.

12 months on - the DMC has been drafted, we had been invited to purchase the land for around $60,000 each house. Many of the owners employed the same solicitor to deal with the negotiations on our behalf. The solicitor has been trying to negotiate terms of the DMC (which the developer created) and terms of sale (how many houses would have to buy in to make the sale worthwhile - it is 30/36) but the developer will not negotiate at all. There are many legal problems this developer has overlooked in the formation of this villa and these things need to be sorted out - but they will not enter into discussion on anything.

The negotiations hit a stalemate and I am not sure what has happened in that regard, but yesterday I received in the post another invitation to purchase - this time for $95,000 - she has revalued the property at 2007 prices and hiked the asking price by 30%. This is while the other offer has not been settled.

The problem that we have is that she will sell the common areas to one of her cronies, who will fill the common pool area up and build at least two more houses which will really devalue everyones property and of course change the neighbourhood signifigantly. The developer is a bully and using underhanded tactics to get what she wants when she wants.

My question is - is there are larger body - legal or whatever where we as a group can approach to explain what has been happening and seek some advise or legal injunction for her to uphold the negotiations?

And if she has created this latest offer of sale - does that override the previous one and are we forced to pay the extra 30% - about 27 houses had agreed to buy at the last price - we had to persuade the last 3 to do so, but it seems that even less will want to purchase now at this higher price (myself included).

This is quite a stressful situation.

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Posted by WoDer (416 days ago)

The first thing you should do is to read the deed carefully. The Mainpoint is, whether the developer has used all sqft outlined in the deed for living space already or not. if the developer did so, and i am sure they did so, then they can't just fill up the pool and built more units.

Posted by Saikunga (416 days ago)

The problem is there is no deed for any of the complex - a major 'oversight' of the same developer 20 years ago. This is what needs to happen now with all the owners in the complex.

Posted by vanilla (416 days ago)

Is the complex classified as low density residential or land for "village house"? Either way to start you can check with the Lands Department / DLO or BD to find out what more the developer can do with the unbuilt areas. Other then a lawyer, you can also try consulting an Architect - AP List 1 to see if they can help you out. Good luck.

Posted by walkup (415 days ago)

There is no substitute for getting a good lawyer and IMHO it might be worth $95,000 to make the problem go away.

Posted by Foolonahill (415 days ago)

30 households can share the cost of a good property lawyer for advice. Even if he/she charged HK$100k (I doubt very much it would be any where near that high for advice), it would be a small price to pay for peice of mind & a fair deal.

Posted by Saikunga (415 days ago)

We have employed a common solicitor - but they have obviously sent us the wrong info or something ...although it looks like we are turning a corner on this thing...will keep working on it.

Posted by WoDer (415 days ago)

Saikung

what you need is an Architect as vanilla has said and not an solicitor.

Posted by Saikunga (415 days ago)

No - this is a legal problem - not a building problem. It has to do with the sale and purchase of property.

Posted by WoDer (415 days ago)

No. You need to find out first under which condition the government has sold the land to the developer and the AP can do that much better as a Solicitor. After thatm, if you find that the Developer has not followed the condition or is on the way to break the condition such as building more Units on top of the Pool, then you should engage a solicitor.

Posted by Saikunga (415 days ago)

There is currently a covenant that stands that the pool is part of the development while there is an original owner still present. Once that owner sells his house, then the covenant no longer applies and the pool does not have to be part of the development. The developer bought the land from the local villagers (who live behind us). So we are safe while the one original owner is still there - but he has been there for 20 years and may be looking at retirement soon (hopefully in HK and in his own house!)

Posted by vanilla (414 days ago)

In more perspective,

1. Regarding legality of land use you should be contacting a AP (Authorized Person) Architect.
2. Regarding valuation of the property you should b contacting a Surveyor.
3. Regarding the actual business transaction with the developer you should be contacting a Lawyer.

Most probably the developers would be doing the same, using different professionals to find out different types of information in order to weigh the factors.