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Watch: The property developer who took money for homes that were never built

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Over 60 people have been bitten by the allure of cheap housing from a budding developer who in some cases sold them flats on land he did not even yet own.

Court records and first-hand accounts show how property developer Alex Mercieca sucked in young couples who thought they had managed to bag a bargain.

Mercieca is facing a mountain of court litigation, with claims totalling over €1 million against him, court records show.

The couple speak about their ordeal.

The amounts Mercieca is being chased for range from relatively low figures like €2,000 to hundreds of thousands of euros. His creditors, according to over 40 judicial letters and cases filed against him, include young couples, contractors who worked on his sites, and even a €140,000 bill from the taxman.

Other people have avoided court, choosing instead to draw up a debt agreement with the developer.

Mercieca would often demand hefty deposits of upwards of 15 to 20 per cent, in some instances without even having completed his own purchase of the land he was promising to develop.

The budding developer, answering via his lawyer Adrian Delia, said his aim was always to develop affordable residential units, but the pandemic disrupted his business plans.

He would then withdraw the deposit money, saying he needed it to develop the promised property.

The budding developer, answering via his lawyer Adrian Delia, said his aim was always to develop affordable residential units, but the pandemic disrupted his business plans.

Delia, a PN MP, has since stepped in as Mercieca’s legal representative and has been handling the financial administration of the business.

Documents show that in several cases, the couples would be left high and dry, as the promised property would remain in shell form for months on end, or in some cases, never even bought by Mercieca.

The promise-of-sale would then fall through, causing many buyers to lose their entire savings and still be left without a home.

To this day, his buyers still wait for a refund on their deposits, with an ever-shrinking hope that they will ever see the money.

‘We lost all of our savings’

Stephen Mifsud, 32, and his partner, Marouska Fenech, 30, are among the many bitten buyers.

In 2020, as they were househunting, they noticed a favourably priced apartment in Qormi that Mercieca was selling on plan.

The €200,000 price tag included the finished apartment and a garage – a significantly cheaper bargain compared to the other apartments in the area.

But the plot – a big, old, dilapidated factory – was yet to be demolished and developed into modern apartments.

What Stephen and Marouska did not know at this point was that Mercieca had not yet bought the plot. He had only signed a promise-of-sale to acquire it himself – a legal and commonly used practice, albeit a very risky one.

“We saw no reason why we should not trust the man,” Mifsud told Times of Malta, adding that the old building already had a planning permit attached to it, leading him and his girlfriend to believe the sale was legitimate.

“Although we didn’t know Mercieca, he was very nice and accommodating to our needs and even accepted to build our apartment with some alterations that we suggested.”

When they signed the promise-of-sale that year, Mercieca told the couple that their apartment would be completed with finishes and ready to move in within 15 months.

Their €20,000 deposit was withdrawn, and the waiting game began.

Seven months later, there was still no sign of construction at the Qormi site.

“After countless, worried calls, we were told the deed had fallen through and we won’t be able to buy the apartment. We accepted that and asked for our deposit money back,” Fenech recalled.

“To this day, almost three years after we signed the promise-of-sale, we have still not got our money back and the site has remained untouched. We later learned he had not been able to buy the property himself.

“The €20,000 was all our savings. We lost all of it, we were left without a home and we had to take a loan just so that we could pay a deposit on another apartment,” Mifsud continued.

“We are morally and financially devastated. We barely make ends meet and we’re paying two loans, just so that we can have a home. We fear we will never see our money back.”

We are morally and financially devastated. We barely make ends meet and we’re paying two loans, just so that we can have a home. We fear we will never see our money back– Stephen and Marouska

The couple decided it was too expensive to take Mercieca to court but, like many other buyers, signed a constitution-of-debt agreement – which is another, legally-binding deed in which Mercieca admitted he owes them money and would pay them within a specified period.

Other couples and first-time buyers even paid more than the conventional 10 per cent deposit.

“Someone we know paid almost the entire price upfront after Mercieca told her he would give her a significant discount on the final price if she paid a hefty deposit,” Fenech said.

Mercieca’s sale prices were appealing. In areas where other developers were selling apartments for €180,000, for instance, he was ready to let go of one of his for €130,000, attracting the attention of many young buyers.

Court records show another couple, Roberto and Claire Sciberras, paid a €75,000 deposit for a promised €120,000 maisonette in Gżira. The purchase agreement was subject to Mercieca acquiring the necessary permits to develop the plot, which he failed to do.

The couple were left with no choice to turn to the courts in a bid to recoup their €75,000 deposit.

In a decision handed down last year by judge Neville Camilleri, the court agreed that the promise-of-sale should be nullified, due to Mercieca’s failure to obtain the necessary permits. The judge ordered Mercieca to repay the deposit, adding the couple to the long list of creditors.

Another buyer, who spoke to Times of Malta on condition of anonymity, said she paid almost double the conventional 10 per cent deposit in 2020. She also lost all the deposit and has consequently not been able to buy another home because she cannot afford it.

In her case, Mercieca also failed to acquire the property he was selling and Mercieca offered her another apartment in a different location instead, but it was more expensive and out of her budget.

Another said she also lost her €25,000 deposit and said the mental distress from the ordeal caused her to be diagnosed with clinical depression shortly afterwards.

‘Not a typical businessman’

Mercieca’s buyers do not describe him as a typical businessman. He does not lead a lavish lifestyle and looks like a working-class professional-turned-developer, with good intentions. But a number of bad decisions and property investments went horribly wrong in a short period of time – a failure that was exacerbated by the pandemic.

Public registry documents seen by Times of Malta show that the deeds go as far back as 2016 on properties in Santa Venera, Msida, Attard, Pietà, Gżira, Birkirkara, Żabbar, Qormi and Fgura, among others.

Mercieca managed to pay back some of the early debts and, over the past year-and-a-half, he managed to settle some €900,000 more. Some of the buyers who were not refunded were offered an apartment in a different location.

It is understood that Mercieca himself is a creditor to a few other developers who took his deposit and did not sell him the land they promised  him.

Mercieca wanted to develop ‘affordable residential units’

In reply to questions, Delia said Mercieca started dabbling in property after his mother died seven years ago, with the intention to develop affordable residential units.

But his business venture was hit by the pandemic, then by “a few legal upsets at failed acquisition stage and more recently by the rapidly rising material and construction prices which were eating fast into his profitability.

“During the last 24 months, with the help of dedicated professionals, he was slowly heading to recovery, but a driven onslaught by a particular contractor after they fell out is now crippling him,” Delia said.

“Mercieca is still working 24/7 to firstly find an amicable solution to damaging disputes but, above all, to recommence works on his remaining sites so that he keeps to his commitments and settle (some of which long) outstanding dues, constantly remaining sensitive to the plight of the people affected.”

Notary denies wrongdoing

Questions were also sent to notary and Iklin mayor Dorian Sciberras, who frequently presided over Mercieca’s promise-of-sale deeds with his buyers.

Several buyers told Times of Malta Mercieca told them he preferred to work with Sciberras and they went along with his wish, but are now disappointed because they expected the notary to stop risky deeds from going ahead and to refrain from withdrawing their deposit money if he felt the agreements were questionable.

Sciberras denied any wrongdoing, and when asked why he continued to preside over the deeds, he said he always acted ethically and with full respect to the law.

“As notary public, I do not have clients but only act upon the instructions of the parties entrusting me with reducing in writing their agreements. Promise-of-sale agreements are private agreements and I cannot divulge any details in respect of same,” he said.

“Insofar as the handling of any deposits are concerned, I have always acted in accordance with the instructions of those to whom such deposit pertains and as regulated in terms of the promise-of-sale agreements entered into by and between the parties.”

The way the promise-of-sale agreements were drafted was not illegal and although the practices undertaken by Sciberras and Mercieca were significantly risky, they were entirely lawful.

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