What happens is a developer goes bust?

[Ryan80]

Bought OTP a few years back and it's due to finish mid year. Property prices have fallen considerably and the developers and development has gone quiet. What happens if a developer goes bust? The deposits we've paid are supposedly safe in a trust account..

 

[vaughan]

Read your contract of sale. It should have something about termination, or a "sunset" clause.

 

[Aaron_C]

If it's in a trust fund it should be safe.

 

[Corey Batt]

Read your contract, it should specify where the funds are placed and what conditions of release there are.

 

[Terry_w]

You will generally still be bound by the contract. A liquidator will take over the development company and sell the project or continue it (unlikely).

 

[jrc]

the issue is also if the secured lender puts in a receiver. The receiver is not bound by your contract with the developer and could sell to someone else

 

[alexlee]

The deposits we've paid are supposedly safe in a trust account..

Per another recent thread about an OTP property, the contract might say the developer is allowed to use the deposits for certain activities. Might want to contact the solicitor and reread the contract.

 

[Terry_w]

Often contracts will say either party could pull out if the other becomes insolvent. Otherwise things could drag on for years.