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Foreclosed Home and Condo Properties Listings Affect Contractors

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By : John Cutts    99 or more times read
As the number of properties ending up in foreclosed home and condo properties listings increases, so do the troubles facing contractors and subcontractors. In Texas, contractors admit that a big number of real estate developers and homeowners have failed to pay them after their properties went under foreclosure.

According to contractors, the high number of distressed properties in the state, including Tarrant foreclosed homes, has created problems beyond the residential real property market. Sectors like construction and construction materials supplies are just some of those that suffered along with the housing market.

As an example, Tri Dal Ltd. has reported having over $300,000 worth of unpaid bills for a project involving excavation and installation of utilities for a retail complex in North Dallas. The contractor incurred the loss when the property ended in Texas foreclosure listings.

Tri Dal President Rick Muller also revealed that his company barely achieved a break even performance in 2009. He stated that as properties falling under house foreclosures listings increase, a number of contractors' losses also file up, forcing most of them to cut down workforce and close some units and offices.

Another example of such situations is the Stoneleigh project which ended up becoming one of the many properties under foreclosed condo properties listings. Developers behind the project reportedly owed an estimated $5 million to several contractors and subcontractors. The project was stopped in 2008 due to problems in financing.

In May 2009, the developer of the Stoneleigh project filed for bankruptcy, but the condo project still ended in a foreclosure sale. The property was later purchased by Centurion American Development Group and the company is currently in negotiation with banks for a loan that will finance the completion of the construction project. According to most contractors, the problem is that, under the state law, contractors lose any claim once a property gets foreclosed.

They can take certain items though, including wiring, light fixtures, carpeting etc. from a foreclosed property, but most of the time, even these are not enough to cover the unpaid bills. A number of properties under foreclosed house and condo properties listings have caused financial woes to Texas contractors and subcontractors. According to contractors, this has taught most of them a lesson of scrutinizing the financial status of the developer before accepting a project.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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