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Wednesday, August 3, 2011

Real Estate Tip: Authority to sell club shares


Real Estate Story

Mr. De Jesus bought a club share from a developer, since he thought that he would be able to use the said share to gain access to other seven leisure clubs under a time share scheme, that an agent promised to him. After almost paying for the club share in full, he found out that developer withdrew its promise to allow him to use the other leisure clubs without informing him. He demanded a refund from the developer, which he never got back. Mr. De Jesus filed a complaint before the Securities and Exchange Commission (SEC) accusing the developer of misrepresentation and deceit.

Real Estate Tip

Real Estate Tip: Authority to sell club shares
Check with the SEC first, if the developer is authorized to sell club shares or is allowed to offer a time share scheme. What prompted Mr. De Jesus to buy was his trust in the developer and belief that he was getting one of the best deals or investment. his mind went into a fantasy zone, which woke up when the reality of the promise never materialized.

In a similar case, a developer with a partner planned to develop a leisure club project somewhere in Zambales. The firm had sold more than Php62 Million worth of stocks although it was never a licensed broker nor an authorized dealer of securities. It was merely registered as a developer, according to the SEC. The SEC issued a permanent cease and desist order to the developer from selling its membership share to the public. The order was issued based on complaints filed by investors for alleged non-completion of the project and non-issuance of membership certificates. The joint venture was dissolved due to violation of the joint-venture agreement by one of the parties, among many problems.
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