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When a person buys home in a 55+ development and contracts

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When a person buys...
When a person buys home in a 55+ development and contracts to pay a monthlly fee for the use of a clubhouse to be built in the future(maintenace fee) to the developer. What protection dose the buyer have when that developer files for Chapter 11 in the state of DE before the completion of the clubhouse.
Submitted: 8 years ago.Category: Bankruptcy Law
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Answered in 12 minutes by:
12/3/2009
Bankruptcy Lawyer: socrateaser, Attorney replied 8 years ago
socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 39,498
Experience: Attorney and Real Estate Broker -- Retired
Verified

No special protection. Age is irrelevant -- this is not a case of elder abuse or age discrimination in housing. It's just a bad deal gone worse.

 

If the developer fails to perform, then the purchaser must file a proof of claim and get in line with the other unsecured creditors, unless the purchaser can prove that the developer never intended to build the clubhouse. If such proof were available, then the claim could be deemed nondischargeable, which would make it more likely to recover.

 

Hope this helps.

 

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Customer reply replied 8 years ago
dose the chapter 11 filling protect the developer, in that I contrated with them for a clubhouse, that i am paying monthly for which will not be built.
Bankruptcy Lawyer: socrateaser, Attorney replied 8 years ago

A Chapter 11 permits the debtor/developer to create a plan to survive and hopefully complete construction. You can file a proof of claim with the court for your investment into the clubhouse, and you can get a copy of the debtor's plan to see how it intends to finish the clubhouse. You can also attend creditor committee meetings and you could even object to the plan, if you think that it doesn't serve you.

 

Unfortunately, a lot of this will cost big bucks in legal fees, so generally, it's a losing proposition, unless you have paid out a small fortune for the clubhouse. You may want to get a list of creditors from the court and attend the creditor's meeting, so you can find out what's going on. It will be an educational experience, at least.

socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 39,498
Experience: Attorney and Real Estate Broker -- Retired
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