Hi and thank you again
GR8 confirms by email that they paid 40% plot cost to Chapal and plot will be delivered to them this week- is such statement by email valid proof ?
Well, they would be foolish to lie about this - the 40% payment. If they are, they are setting themselves up for potential serious trouble. Insofar as the plot being turned over to them by the end of the week? - best to check with Ajman Municipality to verify this - the land dept but next week. The timing is rather interesting..... but possible... or not...
They also say that 90% of L.S. 1 is sold ! can I trust them ?
I wouldnt trust anything a broker would tell me. 90% sold? great.. and defaults? or 90% paid-up and current...? Sounds like brokester hype.. Question is, without an escrow no one knows if the monies they have been collecting are going into a segregated account for that building,., This is the one biggest problem in Ajman and has also happened quite a bit in Dubai before the escrow law was introduced..... I know I may sound a bit jaded but I have seen too much..
If the developer has indeed sold out this amount - he should start building ASAP as constructions material prices have droppped and builders are desperate for work. The project will be far more profitable than if they had started a year ago. Good time to get started and will boost investor confidence
Re: Contracts
GR8 email says:
'contract sent to Nomore Hotel (agent) was the draft copy and it was told that the final contract will have some changes',
'Sale Agreement' & 'Sale and Purchase Agreement' are the same thing'
'NOMORE' Hotel - the agent? I dont think I would give my money to a company with a name like NOMORE! funny...sorry...
They developer must be new to this... What's the purpose of sending a 'draft' copy to the end user? or to an agent for matter? When that contract leaves the devleoper to the end user - it should be the FINAL draft ! especially if they are expecting you to sign it !!! Either way, DONT sign ANY contract until such time it conforms to your agreement...
When you purchased, you signed an agreement - usually the reservation form - often 2-3 pages.... Did you sign this when you bought? (you must have,,,, with the original terms,.,) The contract you recieve afterwards - 20-40 pages... is the SALES PURCHASE AGREEMENT (SPA) - this usually comes several months after the reservation form and after the buyer has paid 30% or thereabouts....
GR8 accepted inclusion of Free parking space and provided Payment plan- but not linked to build timeline
Not much you can do about that until such time Ajman authority institutes this as law... which may be coming.... when? can't say for sure but in the works... Once the law is enacted - then they will have to conform irrespective of the contract terms - like in Dubai.. (IF they implement a law that forces the developer to link construction to payments) Unit owners should organize to ensure there is transparancy and these guys havent spent all the money already!! If the developer is 'straight-up' - they will not have any issues making representations to ensure good will and further payments! If the funds went somewhere else - like to another plot , they will not be forthcoming..
Under the present circumstances, Ajman should be considered HIGH RISK - depending on the strength of the developer of course. I am just stating 'possibilites' - some developers in Ajman of course, will deliver as promised and have but some will not. A fact of life and a sign of the times... Ajman could be considered a 'secondary' market - a spin-off to Dubai. Secondary markets are cheaper, more value for the dollar but also - more risk. Development environment in Ajman will get better as laws and regulations go into effect, which are coming - to protect investors, so they are aware of it and will remedy it.
Preliminary contract is silent about future changes in final SPA
Maybe there were not going to be any changes till you raised the issue? You'd be surprised how many buyers don't read them very throroughly ! I still am quite skeptical about this 'preliminary' contract... 'Preliminary' contracts are issued to the developer from the atty for review!! NOT released to the end user?? This is the first time I have heard of this..... most unusual. I would NEVER release a 'preliminary' contract to end user and don't know any other experienced developer that would... A lot of work and man hours go into these preparations - why do it twice????
Chapal is very uncooperative about plot handover information
They shouldnt be. In Dubai, a developer cannot sell off-plan UNTIL they have land - handover. Although this is not the law in Ajman, they should be transparant - because the message they are sending is the wrong one by being evasive. It's your money and why shouldn't they be forthcoming? unless, it's been delayed indefinitely and they are reluctant to say.. (incidentally, if the Master Developer is delayed in the handover - most often - they extend a grace period to the sub developer on land payments....) If there is a delay - be honest and explain why. It's far worse when they give a date - like the 'end of week' and a month later - the handover still hasnt happened. This is a sure way to turn-off the buyers and will result in defaults. No one likes to be played 'the fool' - especially in these times under these market conditions. Better to be honest and transparant and you will find that buyers will work with you but once the trust is lost - well, defaults will increase assuradly, followed by legal complications. The Ajman authorites will not take this too kindly either..... They don't want investors getting burnt. The other reason why they might be reluctant to say is they dont know what GR8 is telling buyers and dont want to contradict them... however, they should be sure that GR8 is not misrepresenting the development..
( I am only speculating here for two reasons, 1) I don't know all the facts as I am not involved with this deal and 2) the only speculation you can really do here these days is in thought.. wondering what is going through the mind of developers )
Should I insist on SPA conforming to Prel. contract ?
What do you think??? Don't you feel you are entitled to a contract that properly reflects the original terms and conditions you purchased under? or have you been drinking too many pints to ask me this? ; )
and have solicitor write GR8 letter ?
Well, if GR8 is already agreeing to amend your SPA to conform to the original terms and conditions - no need to spend $$ having an atty send a letter. Giving them the benefit of the doubt, there may have been miscommunication between the Nomore Hotel guys you bought from and GR8 or the person generating the SPA's did not read or review your original agreement and amend the SPA accordingly. An oversight becuase perhaps they are rushed to get them out, which can happen. (especially in case where there are many different types of payment plans...) Ideally, within proper corporate governance, the contracts should be reviewed by at least two parties, be checked, before being sent out because mistakes can happen.... They may be new at this and not have the proper peronnel handling this.. The important thing, is they have told you they will change it - which is the right thing to do. No need to get lawyers involved - at this point anyway....
have a good week, thank you
I'll try - you too!!
v
