Re: Legal advice please on pre construction - Posted by Rich[FL]
Posted by Rich[FL] on April 08, 2006 at 20:52:58:
Yes; here in FL they can and do enforce such provisions. Look at it this way…the developer is sinking significant money into the project (both personal and borrowed); he knows what his plans are and what the development will look like and be worth after it is completely built. Purchases for rentals and quick resales (flips) will often artifically drive the prices way over market which will ultimately affect his profitability and ability to market. So, he has provisions in his contracts to control the sales.
Here in my neck of the woods, this very same thing happened - without those provisions. Pre-constructions were sold and resold several times before construction even began. We had dozens of new projects being developed and planned. Over the last 2-3 years, 2-3 BR condos went from about $200k to $500-600k each, many pushing over $400/sq ft. I can’t say for sure, but a good guess was that over half were put on hold or cancelled alltogether because of this buying frenzy. Many people made a killing by speculating early, and there are many who are holding overpriced condos because the prices have rolled back by maybe 20-30% and sales have almost come to a screetching halt. Regular single family houses that used to sell in hours or days are now taking 60-90 days to sell. We are undergoing a significant correction in this area and once everything settles down for awhile, I expect to see more growth in the future, maybe under more controlled circumstances.
I’m waiting for the foreclosures to hit!