Wednesday, August 10, 2011

Is this misleading conduct by a developer

Developers who sell apartments off the plan want them to settle. When there are unsold apartments at the time of the first batch of settlement, this is even more important -- so that the developer can say that all contracts settled at the contract price.

Here is one trick I came across recently. The developer of high end apartments had a purchaser who could not settle. So the developer purchased the home of the purchaser, for the same price as the contract price of the apartment. Then the purchaser could settle the contract with the developer at contract price. Now, the developer owns a house -- and lists the house for sale, at a price which is less than the developer paid for the house. In effect, the developer is selling the apartment at a discount, but that does not show on the records. Buyers beware!

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