Developer asking us to pay Penalty

Hi atty,
We bought a house and lot project in qc. The completion of the development were delayed for a couple of months, when they showed us the unit there are still part of the house that needs to be fix like tulo sa kisame when it rains and some minor things. We demanded to fix everything first before we release the letter of guarantee from the bank but it took them few more months para magawa. And this is the irritating part, they are sending us letters of penalty amounting to almost 100k each month saying that we haven't released the LOG from the bank. Who is in the right mind to release that when the the house is leaking everytime it rains and it was also advised by our broker not to release it until everything is fixed because of the developer's history of not fixing backlogs after the LOG release. Now the developer is saying that they won't waive the penalty or lower the amount. we don't want to pay for the penalty because of the delay and we feel cheated because of the quality of their work. Can you please advice us on what should we do? Would appreciate your response. Thank you!

What do your contract say about
/your rights concerning not solved bad done work by the developer?
/developers right at delayed/stoped pay?

Have you talked to the others with SAME developer in similar situation as you?
If not - do that. You can be much stronger together, and less costs per person if it become a court case.

Such problems are coomon. Some developers don't even finnish PAID houses
(That's why I don't want to pay anything (except small amounts) in advance.)

Hi Lunkan, Thank you very much for your prompt response.

The contract doesn't have those articles about our righhts on bad work or even their delays. It also doesn't have anything about penalties.

We haven't contacted anyone yet but if we will have a chance we will. What do you think is our next step on this? Does the hlurb or any government sector that can help on this? What would be the best approach to settle this kind of matter? Through court?

Thank you!

I don't know much about such laws, so I hope someone else can answer better

1a. Next step I find being trying to talk to people in your situation with same developer so you get stronger by being a group
1b. and get to know possible usable law support.
2. TOGETHER talk to the developer and THREATH making a case of it. (="If you don't solve this soon, then we will have to go to court.")

Court is LAST alternative, when everything else has failed, because it both take long time and can cost much money.

(Check your Contract to Sell because it will have provisions on the release of the LOG from the bank.  That's why they're sending you demand letters in regard to paying your penalties.)

First go to HLURB and file a written complaint.  The developer will have to answer, and you will be asked to provide evidence.  Provide pictures and letters that you sent the developer in asking them to repair the house, etc.  

Don't use this threat -  (="If you don't solve this soon, then we will have to go to court.") -
Use this instead, "If we cannot solve this soon, we may have to ask HLURB to issue a Cease and Desist order."  A cease and desist order (CDO) will provide more impact.  

HLURB will act as mediator, and a compromise will be made.

Thanks lunkan and betchay001 for the help.

We already visited HLURB and we were advised to get a lawyer to file a formal complaint.

Do you know or recommend a lawyer with good experience in real estate?

Again, thanks for the help