Duna Terasz Grande - KÉSZ Group statement

The general contractor of the Duna Terasz Grande Residential Complex is KÉSZ Építő Zrt., a member of KÉSZ Group with a track record of more than four decades. Works started in October 2020 and handover was scheduled for March 2023, but post-coronavirus pandemic circumstances and the impact and consequences of the Russian-Ukrainian war on the construction market resulted in a number of difficulties in the construction process. Among other things, the supply of raw materials and the availability of resources have become unpredictable, causing significant delays and slowing down the pace of construction. In addition, the drastic change in the exchange rate also caused problems because we had to face significant price increases. It is the principle of KÉSZ Group not to leave construction work unfinished and, as such, the project was completed and the apartments were built. According to HCSO statistics, construction prices rose by 56%, with a similar increase in housing prices in District XIII of Budapest. KÉSZ Építő Zrt. advanced the increased costs for the realisation of the residential complex using its own funds, which have not been compensated by Duna Terasz Grande Kft. The price increase caused by these unforeseen events amounts to billions of forints, which was borne solely by KÉSZ Építő Zrt. 

As a final step before handover, KÉSZ Építő Zrt. corrected the defects in the apartments that were on the buyer's list of defects as well as all defects as per the applicable standards, meaning that the complex, the apartments, the communal areas, in other words the entire building has been ready for occupancy for several months. This was also confirmed by the residents who took part in the personal walk-through organised by KÉSZ Építő Zrt. and had the opportunity to inspect their own properties. 

However, the builder of the residential complex, Duna Terasz Grande Kft., in addition to the defects already repaired, included tens of thousands of works on the technical delivery defect list that were not technically interpretable, were not relevant or defects that although were in compliance with the applicable standards, were still assessed as defective. Although these defects – which the builder considers to be in addition to the corrected defects on the customer list – do not affect the usability of the apartments, they prevent the completion of the technical delivery process with Duna Terasz Grande Kft. In order to deal with all these issues quickly and efficiently, KÉSZ Építő Zrt. has initiated negotiations with the builder, but despite all efforts, these have not lead to any results. 

Despite the high level of completion of the building, on 10 January 2024 Duna Terasz Grande Kft. terminated the construction contract with our Company, which further hindered the swift and efficient conclusion of the case. KÉSZ Építő Zrt. has submitted several proposals to the builder for settlement, but has not received any response for more than a month, despite having initiated negotiations at both management and ownership level. The builder, with whom the buyers have a contractual relationship, is responsible for the delivery of the apartments to the buyers. In accordance with the legislation in force, the conclusion of the settlement between Duna Terasz Grande Kft. and KÉSZ Építő Zrt. is a prerequisite of buyers taking possession of their properties. 

KÉSZ Építő Zrt. has completed the work entrusted to it, for the quality of which it assumes responsibility, and has repaired the defects indicated by the residents. However, since the termination of the contract, KÉSZ Építő Zrt. no longer has any influence on the further outcome of the project. Our Company is sympathetic to the buyers and will do its utmost to resolve the situation satisfactorily as quickly as possible. Our goal is to conclude the settlement and the project with Duna Terasz Grande Kft. as soon as possible, so that the apartments in the completed residential complex are delivered by the builder to the buyers as soon as possible.