August 27, 2010 – Enough unhappy buyers have come forward to verify that Starwood Capital and ST Residential do not intend to honor the contracts for the Chicago condos that were pre-sold at Lexington Park. Earlier reports that deposits will not be returned in full have also been confirmed, as buyers who had an email contact on file with the companies were notified of the decision and told they have 30 days to agree to the terms and basically keep quiet about the whole deal.

Starwood and ST have stated that they will return the deposits with interest but minus 5%. The deduction was being called an administrative fee and now is tagged as a processing fee. Either way, it’s doubtful that the interest will cover the fee. Even if it does, buyers have lost a lot of time waiting on this financially troubled Chicago real estate development as well as lost out on the $8,000 tax credit.

It will be interesting to see how many buyers take the money and move on or if any decide to take legal action to get all of their earnest money refunded. If there was no drop dead clause in the sales contracts, it may be difficult to do. Generally developers are legally bound to deliver a home within a reasonable amount of time even if it isn’t specifically stated in the contract or the buyer has a right to cancel and request the return of his or her deposit.

The Lexington Park drama may continue for some time and is a reminder for buyers that the housing market still hasn’t recovered. But the bright side of that is that buyers can find some good deals on prices of Chicago short sales.

[tags]Lexington Park, Chicago Short Sales, Chicago Real Estate[/tags]

This entry was posted on Friday, August 27th, 2010 at 8:50 am and is filed under Uncategorized.