A woman buys an apartment. Almost six years later, it is still not finished. This raises questions about the business practices of the controversial real estate group Adler Group in Frankfurt.
Johanna M. has embarked on a deal that she has long regretted. Johanna M.’s real name is different, she doesn’t want to make her real name public.
A few years ago she inherited money from her grandmother. She wants to invest the money sensibly in real estate. She opts for a one-room apartment: in a central location, opposite the Frankfurt trade fair, in a listed building on the edge of Frankfurt’s posh Westend. The project is called “Grand Ouest”.
The property developer announces that it will create more than 160 luxury apartments there. Johanna M. buys. “In December 2017 I was at the notary’s and that’s when the purchase contract was signed,” she says. “At the time, the contract stated that the apartment would be ready in November 2019.” But she isn’t. Not until today.
Always new appointments
Instead, Johanna M. is put off – with new completion dates again and again. The developer changes several times. Since June 2020, the “Grand Ouest” has belonged to the real estate group Adler Group.
Johanna M. quickly becomes restless. She wants to know if things are going well. She describes the developer’s answers as “a lot of text with little content”. Always shortly before the announced completion date, M. describes it, a letter came in which a new date was announced: “And so it happened again and again and again.”
Corona, restructuring in the company or delivery bottlenecks are given as justifications. Johanna M. was recently informed that the apartment would be ready on September 30 of this year. But Johanna M. has serious doubts. About six weeks ago she inspected her apartment again. She couldn’t see any real progress, she says. And her previous visit was almost a year ago.
Not an isolated case
The apartment – the price per square meter in 2017 was around 9,600 euros – is still a construction site. The Adler Group, which has been responsible for the “Grand Ouest” since 2020, has not given a specific date on request. A press spokeswoman writes: “According to the current planning status, the apartments will be structurally complete at the end of Q3/beginning of Q4”. “End of Q3/beginning of Q4” – that would mean: end of September, beginning of October.
Raphael Slowik knows that. Slowik is a lawyer specializing in commercial and criminal law. He represents Johanna M. and other homebuyers in the “Grand Ouest”.
The “Grand Ouest” is not an isolated case, says Slowik. Construction projects would start, the apartments would be sold – then nothing would happen for a long time. Adler is now known for this: in Berlin, in Hamburg, at the Kaiserlei-Kreisel in Offenbach.
The public prosecutor’s office, the Federal Criminal Police Office and the financial supervisory authority BaFin are currently investigating the background to the business of the Adler Group companies. The presumption of innocence applies until convicted.
Lots of open questions
Lawyer Slowik thinks he can see a pattern in the “Adler” projects. Also in Frankfurt at the “Grand Ouest”. “For the past two or three years, we’ve seen that no further construction progress has been made,” says Slowik. “The justification that this is due to Corona is simply unbelievable. As with other construction projects, it seems that the money is simply not available. That the money may have been misused for other purposes.”
Inquiry at the Adler Group: What is the group’s position on the accusation that sales proceeds from the “Grand Ouest” were not used for the speedy completion of the project? There is no answer to this question.
For buyer Johanna M., the dream of owning her own apartment has long since turned into a nightmare. She has now paid around 360,000 euros, around 80 percent of the total price. She now wishes to get her money back, she wants out of the project. But so far she has been denied this way out. Johanna M. has the impression: “You can cancel anything in life, except apparently a property developer contract.”
Legal position does not help
Lawyer Slowik actually sees a loophole in the law. “The construction contract law gives the buyers no opportunity to get out of stalled construction projects,” he says. However, this also means that the incentive for companies to misuse money already paid by buyers or not to complete apartments is “simply very, very large”.
Slowik is not alone in his criticism. Politicians in the Bundestag and experts have been warning for a long time: The law leaves home buyers and home builders out in the rain if the property developers do not deliver. Or even file for bankruptcy. A reform of the law has therefore been discussed for years, but the draft for the change in the law is still with Federal Justice Minister Marco Buschmann.
Unrealistic promises?
In the case of Johanna M., the almost six-year dispute over her one-room apartment is getting on her nerves. “Of course it’s stressful when you invest almost all your money in an apartment, and as of today I don’t have any of it,” she says. “And emotionally I would also say that the money is lost at the moment. Of course it’s very hard when you have to start from scratch.”
Lawyer Slowik now wants to file criminal charges against Adler. The accusation: Johanna M. and all other “Grand Ouest” apartment owners were deceived. Completion of the apartments on the promised date was never realistic.