I am due to complete on an apartment in this development around March/April next year.

I have just started to look at mortages, after initial enquiries it seems that with the current exchange rate, even if one can get a mortgage, it is not an attractive proposotion. The purchase cost in sterling is now way above what it was when the deal was agreed.

The thought of shelling out this extra cash along with the kitchen fit out and maybe a furniture pack, just for the unit to sit there either un let or let at a low rent, does not appeal.

There would therefore only seem to be two options.

Attempt to sell the contract at a huge discount between now and the completion date. Has anyone tried this, or have any idea at what price it would be feasable?

Or, just walk away and dont throw good money after bad. Again, has anybody had experience of this in Poland? Are there any further repurcusions than the loss of your 15% deposit and PS fee?

I have further investigations to do on this but if anyone has already set off down this road it would be useful to compare notes.

Tim

Where exactly is this property you are buying? And for how much in zloty terms? A lot depends on the location and whether it makes sense to default on it or not. Also, what are the terms in your contract about not completing? Poland has some peculiarities in contract law whereby the civil code can override contractual terms. For example, even if you do not complete the seller may be able to pursue you through court within 12 months, in order to have you complete or to compensate for loss - I know from experience of friends. Same applies if market was going the other way and seller tried to bail out of completion - you would then be able to pursue seller through court procedure under the civil code though action must be filed within 12 months of the preliminary agreement being signed. Of course outcome is not certain but process is painful. Also, are you looking at mortgages in UK for Poland or looking in Poland?
Give me more info and maybe I can help you.

Max

Thanks for your reply. To answer a couple of your questions.

The development is in the Bronowice Distict, a 10 min tram ride to the Old Town square or the city centre.

The balance to pay is 301,241 PLN. This being 85% of the purchase price. The unit will also need a kitchen, around 20,000 PLN I believe.

Not sure what the legal documents say about non completion as I do not have them to hand. Perhaps PS or anyone else who has dropped their deposit in Poland could comment on this?

You said that any legal action had to be launched within one year of the preliminary contract being signed. I exchanged contracts on this in 2006. Does this count or do you mean one year from when the completion was due?

I was looking at a mortgage through Rednet. Although I am self emplyed so that could prove difficult.

Tim

Tim, I'm in a similar position on this development and completing development in Solvakia. I'm intending to raise mortgages as this removed the currency issue assuming you can collect enough rent to pay the mortgage. In reality that means some funding will be necessary from the UK and/or a relatively modest LTV.

It's swings and roundabouts really as those of us with existing assets in these currencies or the Euro are laughing at the moment.
Huw

Tom

I'm an investor in Future City (first phase) and had to go thtough the same thought process a couple of months ago.
I was unable to raise money locally due to my circumstances (self employed) and the more conservative stance by the banks.
I believe there will be growth as long as you can hang on and cashflow it for at least another three years.
The big unknown is what the exchange rate will be in three years time - I am hoping the zloty will strengthen again but I have no idea whether this will happen.

To give some perspective, the zloty has suffered somewhat in the last few months and you are better buying now than in July of this year.

I had to take out a local loan and borrow from friends to make the purchase but was happy this was the right decision.

Hope this helps

Alex

Hi Alex

How has the fitting of the kitchen gone on your unit? Did it cost 20,000 PLN? £4,500 for a kitchen in a 1 bed flat sounds an awful lot in London never mind in the CEE!

What indications or rental demand and/or rental income have you had?

The additional cost of the unit due to the exchange rate and lower LTVs, if you can get a mortgage, seem a high price to pay for an investment that MAY pay for itself IF the zloty weakens in three years time.

Thanks a lot for your input.

Tim

Hi guys

I also bought into future city 2b and is now in the process of applying for a mortgage. My concern: when is the completion date for the black & white finish. As I believe we have signed ppc on the white finish completion, when the final balance will be needed on our unit therefore mortgages to be secured for that period.

Do any of you know when the pss units will be ready to white finish as this could make a big diffencence in when you need to have your funds ready.

I heard it could be anytime from March to June. Not pps nor the lawyer could answer this important point.

Any advice

I'm looking at the same bleak short term picture.

Has anyone asked the question about penalty clauses for late completion? This phase is way behind the original completion date. Is their a way out through this?

Martin

Was just imformed from Rednet & iProperty assets that the expected handover date for Future City 2b is October 09

Regards,
Brian

Hi,

I would not be at all surprised if our flats were handed even later than Oct. Look at the record for phase 1. Due completion date: Jan 2007. Handover Jan 2009!

Richard Goldie