Can developers make changes to an SPA once they have signed it with property buyers? In other words, can they make changes to the labelling of a property from ‘serviced apartment’ to ‘residential’ midway through a project?
In principle, developers shall not ask investors to give away their rights to receiving a different type of property to the one that they paid for and they were promised to receive. Especially if it is a downgrade from “hotel apartments” to plain “Residential Apartments”.
Only inexperienced investors would accept such a proposal under the pressure of developers delaying handover. I anticipate a difference of at least 15% to 20% in value between “Hotel Apartments” and a simple “Furnished Apartments”. This what investors can lose by accepting the downgrade. A fair request from developers would be to offer investors a compensation of 15% to 20% of the original purchase price, in exchange for the investors approval to accept to receive a residential apartment and not a hotel apartment. Developers charged investors high premiums in line with their promises to deliver hotel apartments and not simply residential apartments.
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