Go Back   English Forum Switzerland > Help & tips > Housing in general  
Reply
 
Thread Tools Display Modes
  #1  
Old 31.03.2017, 01:53
pkb pkb is offline
Junior Member
 
Join Date: Mar 2017
Location: Schwyz
Posts: 77
Groaned at 5 Times in 4 Posts
Thanked 14 Times in 10 Posts
pkb has earned some respectpkb has earned some respect
Sign a purchase agreement but couldn't get mortgage?

Hi,

I have a question. I have a friend who signed a purchase agreement and paid 30'000Fr for deposit. However she underestimates the requirement to get a mortgage from banks and failed to get an offer.

Is there any way that she can get her 30K Fr. deposit back?

Thanks!

Last edited by Ace1; 31.03.2017 at 02:26. Reason: fixed typo
Reply With Quote
  #2  
Old 31.03.2017, 02:34
Ace1's Avatar
A modal singularity
 
Join Date: Sep 2011
Location: Morgins, VS (and Alsace)
Posts: 8,527
Groaned at 346 Times in 221 Posts
Thanked 14,237 Times in 6,241 Posts
Ace1 has a reputation beyond reputeAce1 has a reputation beyond reputeAce1 has a reputation beyond reputeAce1 has a reputation beyond reputeAce1 has a reputation beyond reputeAce1 has a reputation beyond repute
Re: Sign a purchase agreement but couldn't get mortgage?

Well clearly she's entered into an agreement in which the possible eventualities should have been made clear, so it's odd to need to all the question.

In general, or at least in the specific cases I've been aware of, the initial contract is subject to a mortgage being offered, so if the banks won't play ball then the contract cannot be completed. This means that any deposit should also be returned, and we were specifically good that this would be the case in the event of mortgages not being forthcoming.

So yes, your friend should not be at risk of losing her 30k, but she'll need to confirm that with the other parties, and whether there may be any other costs to be born I have no idea.
__________________
http://www.chaletbeauroc.com
Reply With Quote
  #3  
Old 31.03.2017, 03:02
Forum Veteran
 
Join Date: Feb 2012
Location: CH
Posts: 2,304
Groaned at 87 Times in 73 Posts
Thanked 2,002 Times in 1,123 Posts
ivank has a reputation beyond reputeivank has a reputation beyond reputeivank has a reputation beyond reputeivank has a reputation beyond repute
Re: Sign a purchase agreement but couldn't get mortgage?

It's not such a straightforward matter as it may seem at first sight.

On one hand, the code of obligations explicitly prescribes that contracts for buying real estate, as well as any pre-contracts like such reservation agreements, must necessarily be notarized, otherwise they're void - Art. 216 OR.

So, that agreement doesn't really oblige you to buy if not notarized. There's no legal ground for that payment and hence you can request the money back as unjustified enrichment - Art. 62-67 OR. Note the 1 year deadline.

On the other hand, even when there's no contract in place, the swiss legal system knows a concept of precontractual liability, "culpa in contrahendo". A party whose fault prevented a potential contract from being concluded may be liable for excessive costs of the other party. If the reservation agreement included elements like penalties for changing your mind, those elements have actually sometimes still been deemed legally valid by the swiss courts as a form of an agreement on such liability.

And last but not least, if you provably knew before signing that the agreement had to be notarized and yet didn't do it, i.e. knowingly entered a void contract and paid, this might be considered an abuse of the legal system (Rechtsmissbrauch), your rights can then be deemed unworthy of protection by the swiss courts and this is how you lose the money for good.

Quote:
So yes, your friend should not be at risk of losing her 30k
There's always a counterparty risk - the seller or realtor whom you paid going bankrupt or just disappearing with your money. Good luck getting it back in this case even if you're within your rights. Do a due diligence before the payment, best pay to the actual owner of the property - he's liable with his property for his debts, however the mortgage bank would always get the first slice of it.

Last edited by ivank; 31.03.2017 at 04:00. Reason: Extended reply
Reply With Quote
The following 7 users would like to thank ivank for this useful post:
  #4  
Old 31.03.2017, 08:13
NickGB's Avatar
Forum Veteran
 
Join Date: Apr 2011
Location: Zug
Posts: 811
Groaned at 7 Times in 7 Posts
Thanked 955 Times in 400 Posts
NickGB has a reputation beyond reputeNickGB has a reputation beyond reputeNickGB has a reputation beyond reputeNickGB has a reputation beyond repute
Re: Sign a purchase agreement but couldn't get mortgage?

I'm at a similar stage of purchase, also just about the pay 30K also. Of course I spoke with a few banks first to get 'approval in principle' and a confirmation of the price. The developer I'm dealing with has been very fair and has told me that the 30K is refundable (minus fees for any administration taken place) I would think and hope that this would be the same in most cases.
Reply With Quote
The following 3 users would like to thank NickGB for this useful post:
  #5  
Old 31.03.2017, 09:13
newtoswitz's Avatar
Forum Legend
 
Join Date: Jan 2010
Location: Rapperswil
Posts: 2,788
Groaned at 47 Times in 44 Posts
Thanked 3,263 Times in 1,491 Posts
newtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond reputenewtoswitz has a reputation beyond repute
Re: Sign a purchase agreement but couldn't get mortgage?

Our deposit contract clearly stated that the deposit was to cover legal and (re)advertising fees if we pulled out, and only at actual cost - you need to see exactly what yours says.

The details of the property are surely relevant. If it's a new build with lots of demand, they probably already have a list of interested people so can't reasonably claim for readvertising; similarly if you signed a standard contract, legal fees aren't relevant.

That would play into ivank's point - if they claim for reasonable costs, I guess the court may side with them and you may be best just agreeing and walking away, but if they don't then use ivank's Art. 62-67 since they've given you nothing for your 30k.
Reply With Quote
  #6  
Old 31.03.2017, 10:32
Guest
 
Posts: n/a
Re: Sign a purchase agreement but couldn't get mortgage?

as they say, the devil is in the details !

Unless mentioned expressly that in the case of no mortgage, there is no deal, i fear you'll be on the hook as you signed a contract with no possibility to back out in the case of no mortgage being aquired.

The fact you cannot get a mortgage is 100% your problem, not the sellers. You should have got approval from the bank BEFORE signing an agreement to purchase.

I fear most if not all of your deposit will be lost, unless the promoter can sell the property on, quickly, painlessly and at a better level than he agreed to sell to you. In this case then, you'll get most if not all your depoisit back.

I stongly suggest you speak with the promoter ASAP to today to inform him about the change of circumstances and maybe he'll have another pinter ready to take ov er immmediately.
Reply With Quote
The following 3 users would like to thank for this useful post:
  #7  
Old 31.03.2017, 11:26
pkb pkb is offline
Junior Member
 
Join Date: Mar 2017
Location: Schwyz
Posts: 77
Groaned at 5 Times in 4 Posts
Thanked 14 Times in 10 Posts
pkb has earned some respectpkb has earned some respect
Re: Sign a purchase agreement but couldn't get mortgage?

In the contract it says:

4.3 Sollte die Verkäuferschaft während der vereinbarten Reservationsfrist ableben oder den Ver-
kauf aus anderen schwerwiegenden Gründen nicht mehr tätigen können, geht die vollum- fängliche Anzahlung an die Käuferschaft zurück.

Can this justify my friend's mortgage case?
Reply With Quote
  #8  
Old 31.03.2017, 11:28
fatmanfilms's Avatar
Forum Legend
 
Join Date: Apr 2010
Location: Verbier
Posts: 19,104
Groaned at 392 Times in 297 Posts
Thanked 18,933 Times in 10,199 Posts
fatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond repute
Re: Sign a purchase agreement but couldn't get mortgage?

Quote:
View Post
In the contract it says:

4.3 Sollte die Verkäuferschaft während der vereinbarten Reservationsfrist ableben oder den Ver-
kauf aus anderen schwerwiegenden Gründen nicht mehr tätigen können, geht die vollum- fängliche Anzahlung an die Käuferschaft zurück.

Can this justify my friend's mortgage case?
No, he is the buyer not the seller.
Reply With Quote
This user would like to thank fatmanfilms for this useful post:
  #9  
Old 31.03.2017, 12:59
Forum Veteran
 
Join Date: Feb 2012
Location: CH
Posts: 2,304
Groaned at 87 Times in 73 Posts
Thanked 2,002 Times in 1,123 Posts
ivank has a reputation beyond reputeivank has a reputation beyond reputeivank has a reputation beyond reputeivank has a reputation beyond repute
Re: Sign a purchase agreement but couldn't get mortgage?

There's nothing to justify here. What you signed is legally void - look up that word in a dictionary if you need; and can be to a large part just ignored.

You didn't have an obligation to pay. So currently it's as if you made a random payment out to them in mistake. And you have a right to request such payments back. It's a criminal offence if seller doesn't comply. I believe you even have a right to request full amount and then decide for yourself if you want to pay them their demands.

If they incurred expenses due to you while dealing in good faith - for example called the notary to start drafting the contract and notary wants to charge them now, or have to readvertise at a cost, agreement or not, they can pass that charge to you. Agreement at most may regulate this bit more clearly. I believe only the actual costs or some small reasonable flat charge is allowed (but only if expressly mentioned in agreement); if they want to keep the whole deposit or start imagining fictional costs for their own time I'd sue.

Last edited by ivank; 31.03.2017 at 13:47.
Reply With Quote
This user would like to thank ivank for this useful post:
  #10  
Old 01.04.2017, 21:24
Member
 
Join Date: Apr 2013
Location: Zug
Posts: 112
Groaned at 10 Times in 7 Posts
Thanked 97 Times in 51 Posts
jamon8 has earned some respectjamon8 has earned some respect
Re: Sign a purchase agreement but couldn't get mortgage?

90% that it is refundable minus some transaction costs. And normally this is indicated in agreement.
Reply With Quote
This user would like to thank jamon8 for this useful post:
This user groans at jamon8 for this post:
  #11  
Old 01.04.2017, 21:30
Forum Veteran
 
Join Date: Feb 2012
Location: CH
Posts: 2,304
Groaned at 87 Times in 73 Posts
Thanked 2,002 Times in 1,123 Posts
ivank has a reputation beyond reputeivank has a reputation beyond reputeivank has a reputation beyond reputeivank has a reputation beyond repute
Re: Sign a purchase agreement but couldn't get mortgage?

Quote:
View Post
90% that it is refundable minus some transaction costs.
That seems like your own very personal case and I don't it think it generalizes well. 90% - so, that means you still paid them 10% for nothing, that's some 3-5k? If they can't cough up actual bills to back up such high damages, I'd think you're entitled to a full 100% refund. What's in that agreement isn't so important, as I already said many times, unless it's notarized (which practically nobody bothers to do), legally it's just rubbish. Toiler paper.
Reply With Quote
This user groans at ivank for this post:
  #12  
Old 01.04.2017, 21:55
marton's Avatar
Forum Legend
 
Join Date: May 2008
Location: Kt. Zürich
Posts: 9,639
Groaned at 409 Times in 353 Posts
Thanked 17,259 Times in 9,277 Posts
marton has a reputation beyond reputemarton has a reputation beyond reputemarton has a reputation beyond reputemarton has a reputation beyond reputemarton has a reputation beyond reputemarton has a reputation beyond repute
Re: Sign a purchase agreement but couldn't get mortgage?

How hard did your friend seek a mortgage?

There are agencies like this who can often find a solution https://en.comparis.ch/hypotheken/default

I never used them myself, it is just an example
Reply With Quote
  #13  
Old 02.04.2017, 10:35
Member
 
Join Date: Apr 2013
Location: Zug
Posts: 112
Groaned at 10 Times in 7 Posts
Thanked 97 Times in 51 Posts
jamon8 has earned some respectjamon8 has earned some respect
Re: Sign a purchase agreement but couldn't get mortgage?

Quote:
View Post
That seems like your own very personal case and I don't it think it generalizes well. 90% - so, that means you still paid them 10% for nothing, that's some 3-5k? If they can't cough up actual bills to back up such high damages, I'd think you're entitled to a full 100% refund. What's in that agreement isn't so important, as I already said many times, unless it's notarized (which practically nobody bothers to do), legally it's just rubbish. Toiler paper.
I meant that in 90% cases in my opinion there is full refund minus transaction costs and not that they return 90% of payment.
Reply With Quote
  #14  
Old 03.04.2017, 10:44
krlock3's Avatar
Forum Legend
 
Join Date: Feb 2006
Location: Zürich
Posts: 3,014
Groaned at 46 Times in 33 Posts
Thanked 2,248 Times in 1,081 Posts
krlock3 has a reputation beyond reputekrlock3 has a reputation beyond reputekrlock3 has a reputation beyond reputekrlock3 has a reputation beyond reputekrlock3 has a reputation beyond reputekrlock3 has a reputation beyond repute
Re: Sign a purchase agreement but couldn't get mortgage?

In our case, it was like that.... deposit would be refunded minus costs. However, we got a mortgage so was a non issue.
Reply With Quote
  #15  
Old 21.04.2017, 23:28
Vince's Avatar
Member
 
Join Date: Sep 2006
Location: Uster, ZH
Posts: 144
Groaned at 0 Times in 0 Posts
Thanked 95 Times in 57 Posts
Vince has made some interesting contributions
Re: Sign a purchase agreement but couldn't get mortgage?

Normally/typically the 20k or 30k is paid to 'reserve' the property. This gives the seller some security that the buyer is serious about buying the property. And not just signs the agreement and cancels it later for whatever reason.

Only a couple of months later, at the öffentliche Beurkundung (notary), the purchase agreement/contract is signed, where both parties in the presence of a notary go through the contract point-by-point. The buyer there have to bring a Finanzierungsnachweis, i.e. a document from a bank (or other financing partner, could also be an insurance company, but let's say bank) that confirms they are willing to finance the property. Typically stated that it has to be a Swiss-domiciled financial institution.

After only signing the reservation agreement, upon explaining the reason to the seller, one *should* be able to get either the full amount back (personal experience), or worst case the 30k/30k minus a few thousand, in case of a valid/good reason. In the actual reservation agreement, the conditions to refund a buyer for the 20k/30k may be stipulated. Typically the term is phrased something like: "in case for whatever reason, the buyer is unable to proceed with purchase of the property, seller will reimburse the reservation payment to the buyer, minus an amount to cover for admin and effort on the seller's side".
Reply With Quote
This user would like to thank Vince for this useful post:
Reply




Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Mortgage Collateral Agreement dannyt986 Finance/banking/taxation 12 02.04.2014 17:23
2 person rental agreement and other party refuses to sign termination piazza Housing in general 24 11.01.2012 19:01
Britain and Switzerland sign tax agreement The Local Swiss news via The Local 0 06.10.2011 17:48
Turkey & Armenia sign agreement in Zürich Wollishofener Swiss politics/news 5 12.10.2009 10:01
United sign pre-agreement deal for Peter Crouch Ian Nicol Football/sports 3 01.04.2008 11:56


All times are GMT +2. The time now is 01:16.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2020, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0