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The Biggest Loser Challenge
|Excited for a brand new home? Of course! Most of us are not fortunate enough to inherit dream homes. Some work half of their entire lives to save enough to pay down payment for either brand new home or through sub-sale. Buying ready-made house through sub-sale is almost risk free in the sense that you have the opportunity to inspect the house before deciding to own it. |
Purchasing a brand new home on the other hand is equally exciting in the sense that you will have a brand new home and have the opportunity to design the interior will less difficulty than house from sub-sale. However, there are also risk attached to it as evidently seen in our country of rampant abandoned housing projects.
How does a project abandoned? If a housing developer is unable to pay its debts, it may subject to liquidation in which liquidator takes over the affairs of company to settle its debts to creditors and to cease the company from company register. Once the company’s affairs is taken over, there is no compulsion for the liquidator to carry on the project. One may argue that liquidators are to assume the responsibilities based on the sale and purchase agreement whereby the developer company and its assigns to be bound by the agreement. However, in reality the liquidator is not strictly bound to continue or to rehabilitate the abandoned project.
If liquidators are not statutorily bound to rehabilitate abandoned projects, what then can purchasers do to protect their rights? Purchasers may invoke Order 92 r 4 of the Rules of High Court 1980 to request court to invoke its inherent powers to compel liquidators to rehabilitate abandoned projects on ground of public interest. However, there are mixed court decisions on this issue hence most of the time purchasers may not succeed in their bid to compel rehabilitation of abandoned project.
There are several reasons why liquidators may be put in an unfair position if there is legal compulsion for them to do so. We have to bear in mind that the first and foremost duties of the liquidators are to accumulate and realise the assets of the insolvent company and run the affairs of the wound up company for the purposes of settling the debts of the secured or unsecured creditors and other stakeholders.
After paying all the creditors there may not be enough fund left to rehabilitate the project.In some instances, even if there are enough funds, the liquidators may not have the expertise to carry on such project. The best they could do is to sell the project to other developers. In such instances, the purchasers have no choice but to enter into new sale and purchase agreement with new developers if they wish to. Otherwise, the purchasers may just have to settle to claim for damages from the company liquidators. By then again, for the aggrieved purchasers’ success to claim for damages are primarily based on whether there are funds left to meet their claims.