Today one of our investors sent us a very interesting bit of news about theexchangebond.com.
It appears they are going into administration.
This raises some important points for both developers and investors alike.
From an investors point of view, does this now mean that any investor whose off-plan purchase is looking a bit wobbly can now walk away from this purchase?
They have already exchanged contracts but any money paid was to the exchange bond.
The whole point of the exchange bond is that it promised that if on completion the investor was unable to complete, the exchange bond company would pay the deposit for the investor.
The exchange bond company would then persue the investor for the lost monies.
So…if the exchange bond company is no more, who chases the investor?
Does the developer take it upon himself, he should do but does he have a legal right to?
In legal terms the investor has exchanged with the developer so risks losing his deposit if he does not complete….but they didn’t pay a deposit did they!
If i’am correct, then we are likely to see a multitude of developers reducing previously sold units for a quick sale!
What of the developers that have bank funding and have been lent money on the strength of their exchanges, surely this must impact severely on them as well.
I predict interesting times ahead…Back to news