Somebody needs to speak about the elephant in the room. As it turns out, this somebody is me. Indeed, there is an elephant in the room, and it is the largest elephant I have ever seen. An issue being ignored or going unaddressed is in no one’s interest. Today we are going to shed some light on where the elephant came from.
You see, it didn’t just come from out of nowhere. Someone created the perfect conditions for it to come to existence. Loyalty is a two-way street and this is where things went terribly wrong. When otherwise loyal, true friends, start to consider exploring legal options regarding their down payments, then the developer has made a terrible mess. In that case the developer has not fulfilled his part of the responsibilities.
A lack of transparency results in distrust and a deep sense of insecurity. The customers need to be informed about everything that is going on. They need to be treated and talked to as equals. They need to feel they are cared about.
It is always important for a developer to be honest and transparent to the buyers and investors. Especially in times of trouble it is very important that the developer and the buyers are on the same side. They should always be on the same side. The buyers have invested a considerable amount of money in the project because they believed in both the developer and the project.
What I am trying to do here is what the developer should have done a long time ago. I am trying my very best to educate everyone involved regarding the status and complexity of the project. Believe me, it is a very difficult task for an outsider to write about a subject without having access to all the information. I shouldn’t be doing it. This is not a job for an outsider. This is a job for someone that attends the board meetings.
Having a lawyer issue a Q and A regarding the rehabilitation process is not the way to do things. It is the wrong way. It is like having a professor speaking to his class in a dull monotone voice expecting the customers to feel emotions. It demonstrates a lack of understanding of the psychology of human beings. Trust is a two way street. This is not the way to gain trust. The developer needs to have someone qualified in charge of customer care. It has to be someone capable of building a relationship with the customers. The customers need to feel that everybody is on the same team. They need to feel that everybody is on the same page. They need to be well informed about what is going on. Of course, finding such a person is not easy. They probably don’t come cheap. The developers are always trying to save money in order maximise the profit so it is not easy. I know, it is easy to know the right thing to do after something has happened. And it is impossible to predict the future. Who would have thought we would be talking about filing for a rehabilitation proceeding?
We are talking about a rehabilitation process. Why? Probably because some of the customers feel let down by the developer. The customers are starting to be skeptical.
The filing for a rehabilitation proceeding is probably an attempt to stop the growing number of legal cases where customers have requested deposit refunds. This could be a significant amount of money.
Some of the customers want their money back. We have often heard that before. Please explain to me how the buyers expect to get their deposits back. Of course there is the value of the land and the existing structure. The buyers need to understand that the building is worth nothing without the missing permits in hand. Who would want to buy a tower that has to be be demolished? Surely the land must be worth something. Yes, but after bankruptcy is ordered, then who usually gets the money? The lawyers and the courts take their share. There will be little if nothing left over for the investors. Having the assets auctioned off should be avoided at all cost! Then the buyers will have lost everything.
If the rehabilitation proceeding is approved then all claims are put on hold pending the success of an approved plan. Until the permit issue is resolved it is going to be impossible to implement any plan, hence the need to buy time. We are talking about a time-buying operation deemed necessary to prevent the buyers from destroying the project. It is outrageous! This is the price they have to pay for not having explained the complex problems properly. I believe they are paying the price for lack of transparency. It could have been avoided. Forgive them, for they know not what they do. This applies to both sides!
To be honest, there might not be much hope that the developer can find a solution to the problems. The project’s fate might have been sealed years ago. I can’t predict the future. But there is not other option than to let the developer try. The developer is in a very difficult position and they want to do the right thing. Both for their own sake and for the customers. They work hard to find a solution. They really want to complete the project.
Customers hoping for a refund of the deposits paid is not an option without a viable approved plan. The only way to save the assets is to give the developer time. If at all possible, it takes time to get these permits.
Right now the developer is fighting a two-front war. He is negotiating with City Hall and possibly other authorities, and at the same time the buyers are also causing problems. The customers need to give the developer a break so he can do his job. He is fighting for the project. It is the only way!
Read my words and understand that the options are limited.
Published 27 January 2017