Tuesday, May 19, 2009

Two Developers Suing Buyers Who Walk Away

An article in Monday's Crain's Chicago Business reports that the percentage of new condo sales that are falling apart before closing has increased from 10% to 15% last spring, to more than 25% today.

As cancellations rise, two veteran Chicago developers, Enterprise Companies and Fogelson Properties, are suing home buyers who try to walk away.

According to Crain's, the joint-venture companies have taken the unprecedented step of filing lawsuits against about 100 home buyers who didn't close on contracts on condos in the Museum Park project. Some buyers can't get financing to close. Others walk away because they think the units are worth less than they agreed to pay.

The cases, some of which have been settled, generally seek recovery of earnest money deposits and half the cost of upgrades. Industry experts say such disputes usually are settled without litigation. The developers have won about half the cases already through settlements and court rulings, says one of their lawyers.

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