Condo Developer Battles Investor Purchasers


Buyers battle with developer in court
Lawsuits focus on contractual issues

April 27, 2008

By David Wren – The Sun News

This area’s softening condominium market has sparked a legal battle between Anderson Ocean Club’s developer and prospective buyers who are trying to cancel their contracts and get back their deposits.

At least 18 buyers have sued Strand Capital Group since November because the developer will not let them cancel their contracts. Most of those buyers say they cannot get financing in today’s credit crunch for units they signed up to buy two years ago.

Strand Capital has filed at least seven more lawsuits trying to force buyers to go through with their purchases.

Patrick Lowe, a partner in Strand Capital, said the real reason many reluctant buyers don’t want to close on their units is that they won’t be able to make money flipping them in the current market slump.

“There are two types of customers – those who want the property and those who are speculating,” Lowe said. “You have some wealthy investors who have the [financial] capability, but refuse to close because they don’t really want the property for personal use.”

Strand Capital is researching the financial condition of every person who signed a contract but does not want to close. If that research shows a reluctant buyer can qualify for a mortgage, Strand Capital will take them to court to enforce their contracts.

“We have given back deposits to folks when we believe they deserve their deposits back,” said Loyd Daniel, Strand Capital’s managing partner. “There are others that we continue to talk to. There is a legal system we will all go through if we disagree with the buyer.”


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