Is “Ekvator” planning a new scam involving apartments?

The owner of the company “Ekvator”, Đorđe Đoko Davidović, has made an unusual proposal to buyers of hundreds of apartments from whom he received payment but never completed the construction. Specifically, he has drafted an agreement allowing buyers to finish the work in the apartments themselves at their own expense, despite it being his obligation. In return, he requests that they waive their right to any compensation and withdraw all lawsuits against him.

On the other hand, he undertook to handle the decoration and lighting of the corridors, the external facade, and the installation of the elevator, but only under the condition that tenants who haven't paid in full give him additional funds.

Some of the buyers with whom CAPITAL spoke believe this to be a new form of fraud and blackmail, while those who have reached an agreement argue that this is their only leverage to obtain anything amidst the increasingly likely bankruptcy proceedings of “Equator”.

In any case, professionals in the field consider the contract highly unfavorable for customers, while Davidović himself sees no issue with it. He deflects blame onto others rather than taking responsibility.

The CAPITAL portal has obtained an agreement with a buyer who had previously fulfilled all obligations and had a notarized contract with “Equator”.

Despite the fact that the contract provided for a “turnkey” project, he relinquished what legally belonged to him in a recently signed agreement.

In that document, the signatories assert that despite the terms of the previous contract, new circumstances have emerged, namely, the coronavirus pandemic, a surge in material costs, and a shortage of labor.Additionally, they concur that Banjaluka’s mayor, Draško Stanivuković, shares partial responsibility. According to their assessment, “Stanivuković’s unfounded political attacks on the company “Ekvator” have contributed to the collapse of its business reputation and delays in construction of the residential and commercial building”.

“Given the aforementioned circumstances, it is not realistic to expect the company “Ekvator”

to fulfill all obligations pertaining to the construction of the building independently and within a short timeframe” reads the agreement.

Furthermore, “Ekvator” commits to completing work on the common areas promptly, contingent upon all buyers settling their obligations.

The buyer agrees to independently finish the apartment for which payment has already been made. This includes installing wall and floor coverings, tiling, installing sanitary ware, completing the kitchen, and electrical installations. Additionally, the buyer assumes responsibility for finishing the balcony fence.

“Once the entrance door, balcony fence, and internal fence are correctly installed in the housing unit, the seller will engage an occupational safety institute to confirm that all mentioned installations have been completed. Following this confirmation, the seller will proceed with the handover of the residential unit to the buyer. “, promises Davidović in this Agreement.

What has caught the experts’ attention is that, by signing the agreement, the buyer forfeits the right to claim compensation for work delays and agrees to withdraw all lawsuits against Ekvator.

Lawyer Arsenije Baltić, who examined this contract for CAPITAL, believes the legal validity of the agreement is dubious.

He also notes that the initial notarized contract for apartment purchase and sale specifies that the seller will construct the apartment on a turnkey basis, covering all necessary construction and utility work.

“The nonnotarized contract specifies that certain tasks will be undertaken by the seller, while others will be completed by the buyer, constituting an amendment to the original notarized contract. According to the law, a contract can only be altered or supplemented in the form it was initially agreed upon”, warns Baltić.

Baltić argues that this contract represents a partial waiver of the original contractual terms by the buyer, thereby alleviating the seller’s obligations.

According to the initial notarized contract for apartment purchase and sale, the seller was obligated to cover all construction costs. However, under this contract, some of these responsibilities, both in execution and financing, are shifted to the buyer.

Furthermore, Baltić contends that the seller's linkage of obligations to new payments from buyers without defining any deadlines is highly questionable.

“In summary, through this contract, the buyer agrees to diminish the seller’s obligations while assuming new responsibilities previously not assigned to them. Consequently, it remains unclear what benefits the buyer gains from this arrangement. In exchange, the buyer receives no specific timeframe or guarantees, but merely another pledge that what was previously promised will be fulfilled, albeit not entirely”, concludes Baltić.

Hundreds of unfinished apartments

Despite the company facing bankruptcy due to mounting debts and Davidović attracting recent attention from the prosecutor’s office, he maintains that his intention is not to harm anyone.

He expresses confusion regarding the public's interest in him and alleges that a media campaign is being orchestrated against him.

“Those who have paid the full price will receive an apartment on a ‘turnkey’ basis. Everything will be completed, with the exception of cases where they opt for more expensive tiles or doors,” states Davidović, thereby refuting the contents of the agreement.

Davidović was taking payments from buyers for two buildings in the Novi Borik settlement. Approximately 130 apartments were sold in building D8, where, apart from joinery, the rough work was completed.

Estimates suggest that approximately 600.000 Convertible Marks are required to finish the building.

On the other hand, building D7, where apartments were also sold, remained at the foundation stage, with construction never commencing.

The issue of defrauded buyers is further complicated by Milos Stevanović, a lawyer from Bijeljina, filing a bankruptcy petition against “Ekvator”, which was recently reported by CAPITAL.

Stevanović acquired 180 million marks worth of claims from the Investment and Development Bank (IRB) of Republika Srpska last November, which included debts owed by Davidović to the IRB.

This development heightened anxiety among buyers, as many lack a legal foundation to attain creditor status in bankruptcy proceedings.

Gojko Mijatović, president of the “Novi Borik” association, who was himself defrauded in the apartment purchase, attributes blame to the prosecutor's office for only recently addressing their issues, despite their problems surfacing several months ago.

Mijatović doubts Davidović’s sincere intentions.

“He simply aims to extract further funds from dissatisfied customers. I would never consent to something like that. I perceive this as an act of degradation. He lacks the necessary funds to complete the project, and the prosecutor’s office just passively observes it all”, said Mijatović.

It is worth recalling that the Banjaluka Police Department had recently forwarded a report to the prosecutor’s office regarding suspicions that Davidović committed 20 criminal offenses, totaling approximately BAM 8.2 million, through his company from 2015 until the end of 2021.

Disheartened buyers have protested multiple times, urging “Ekvator” to complete the apartments for which they’ve already paid. Despite fulfilling their payments, many are still living as tenants. Tragically, some have passed away without ever being able to move into their homes.