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November 4, 2009

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Lotus apartment deals nearly completed

THE odd and sometimes-angry saga at Lotus Riverside, an apartment complex in Shanghai's Minhang District where a 13-story building keeled over in June, appears to be nearing a conclusion.

A large majority of the apartment buyers in the complex have signed agreements with the developer to remain in their undamaged units after months of negotiations.

At the same time, 59 owners have decided to withdraw from their purchase contracts and take buyouts, Zhang Pengfeng, a lawyer appointed by the district government to coordinate negotiations between the developer and the buyers, said yesterday.

Only 59 of the original 489 apartment buyers in the complex have still not decided on a course of action.

"The end of the negotiations is in sight," said Zhang, who is still in talks with the owners of 21 flats in the toppled building who continue to insist that the structure be replaced. That's highly unlikely as the government is considering a proposal to turn the now-empty site into a green area.

Despite that plan, the owners have threatened to file a lawsuit against the original developer, Shanghai Meidu Real Estate Co, which has been suspended from future real estate operations. An investigation by architectural experts found that the nearly completed building toppled, killing a worker, because of improper excavation practices.

The other 38 undecided owners have apartments in a building that shifted a few centimeters because it was near the one that fell over. They don't have to make a choice until work to shore up their building is done.

The Lotus Riverside complex originally had 629 apartments in 11 buildings. People who own units in the toppled building can receive a buyout or purchase another apartment in the complex at a discount. Owners of units in undamaged buildings can stay and receive a rebate or take a buyout.

At least some who have made their choice on whether to stay or leave may not agree the negotiations are heading toward a happy ending.

"I have no better choice," said a buyer surnamed Yin who owns an apartment in an undamaged building.

He agreed to honor his purchase contract and receive a 5 percent rebate on the original price.

Yin said he could not afford to buy a similar apartment in a nearby community if he opted for a buyout because home prices have soared since the valuation for his flat was set.


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