Stalled construction, disputed insurance claims, and now bankruptcy: The Ouschterbuer housing project in Oberkorn is unravelling, leaving its buyers grappling with an uncertain future and mounting frustration.
In July 2023, RTL first reported on the "Ouschterbuer" real estate project in Oberkorn, which includes plans for 15 flats and 26 houses.
Several buyers who purchased homes in the development in 2023 complained that construction had stalled, reportedly due to the international developer Capelli failing to pay the construction companies. Now, a new development has emerged: Oschterbour SA, the company responsible for the project and a subsidiary of the Capelli Group, has declared bankruptcy. This leaves 19 houses unfinished and their buyers facing an uncertain future.
For many buyers, the bankruptcy announcement has sparked mixed emotions. Jeff Wagner, who purchased a house in the Ouschterbuer neighbourhood with his wife, shared his reaction with our colleagues from RTL Télé: "We always expected it in a way, but it still came as a shock, especially since Capelli SA is a big international company."
Discrepancy between deed of sale and completion guarantee
Wagner explained that Capelli informed buyers of Oschterbour SA's bankruptcy via email, advising them to contact their insurance companies regarding the completion guarantee. Such guarantees are mandatory for off-plan properties (VEFA) and are designed to protect buyers if a developer cannot complete a project, covering costs that exceed the remaining payments under the VEFA contract. However, Wagner revealed a complication: the name on the completion guarantee does not match the name on the deed of sale.
According to Wagner, buyers were asked to submit their deeds of sale and completion guarantees for review. Initially, buyers were told that the guarantee was signed by Capelli SA, not Oschterbour SA, and therefore could not be honoured. However, Wagner noted that the insurer later backtracked, saying it would reassess the situation and provide further updates. "Once again, all we can do is wait, just like we have for the past five years", Wagner said.
Alessandro Rizzo, CEO of EuroCautioun, which acts as an intermediary between the insurer Stonefort and the buyers, clarified that the initial response was not a rejection. He explained that the guarantor needs time to analyse the situation before opening a case, describing the scenario as "unprecedented". Rizzo highlighted that Stonefort, which manages around 20,000 guarantees, has never encountered such a situation in its 12 years of operation.
Developer blames insurance firm for discrepancy
Rizzo explained that the initial email sent to buyers may have been misunderstood due to its use of "complex legal terms". To clarify, a second email was sent, confirming that the completion guarantees remain valid but require thorough assessment. Rizzo described the situation as "unprecedented", noting that some guarantees list Oschterbour SA as the responsible party, while others name Capelli Lux SA.
When contacted for comment, Capelli stated that all deeds of sale were signed by the company supporting the project, not Capelli directly, and emphasised that a completion guarantee from EuroCautioun applies to every unit. Capelli attributed the discrepancy in names to "human error" on the part of EuroCautioun. Despite this, affected buyers have been advised to contact the receiver of Oschterbour SA and its notary for further guidance.
Buyers sought compensation from Capelli
Separate from the bankruptcy of Oschterbour SA, some buyers had previously decided to take legal action against Capelli. Florence Villette, who purchased a house in the Ouschterbuer development, explained that she and others had filed a claim for compensation. However, the developer's bankruptcy has complicated matters, leaving them waiting for a resolution. Villette highlighted the challenges of moving forward, particularly for those in terraced houses. "We're four terraced houses, so all four of us need to be able to move forward at the same time if we want to get our houses up to date", she said.
According to Rizzo, the majority of buyers should not face issues with their completion guarantees. However, some are hesitant to rely on the insurance, fearing that the additional expert reports required could delay the project by several months.
Jennifer Vitriolo is among those who have decided not to use the insurance. Instead, she plans to complete her home independently with other contractors. Vitriolo anticipates that much of the existing work, including electrical and plumbing systems, will need to be removed and redone, effectively starting from scratch.
Insurers advise against completing homes independently
While insurance companies understand the urge to complete unfinished homes on one's own, they strongly discourage this approach due to the significant risks involved.
Rizzo warned that taking on such projects represents "an enormous risk" for families, emphasising the highly technical skills now required in modern construction. He acknowledged that those affected "very likely" paid too much, but argued that it is ultimately the guarantor's responsibility to cover completion costs.
Vitriolo, a mother of three facing eviction from her flat on 1 November, expressed frustration over limited options. When she previously had to relocate, she struggled to find suitable housing. At the time, she reached out to the Ministry of Family Affairs, which advised her to contact a social office if she encountered financial difficulties.
Vitriolo remains critical of their response, recalling: "Their reply made it very clear that, first of all, I earned too much money, so my only options were to live in a hotel or at a campsite with the kids." She also recounted calling about social housing in Differdange, where she claims she was told that despite availability, she did not qualify because she "isn't a refugee".
Oschterbourg SA could still be saved from bankruptcy
Upon enquiry, the housing service of the municipality of Differdange clarified that affordable housing is not reserved exclusively for refugees. All applicants are treated equally regardless of background and must submit an online form. Applicants are then evaluated using a points system based on a social inquiry. The service noted that someone living in temporary accommodation might score higher than someone already engaged in the primary housing market.
Meanwhile, uncertainty looms over the fate of the Ouschterbuer neighbourhood. Reports suggest there is still a possibility that Capelli could rescue Oschterbourg SA from bankruptcy by settling its debts. If successful, the company would regain ownership of the project, relieving individuals of direct responsibility.
Responses from Eurocaution and Capelli
Eurocautioun has issued a statement on the issue (original text in French and Luxembourgish):
"1. Eurocaution n'est pas l'émetteur de la garantie il s'agit de Stonefort Insurance sa
2. J'avais bien expliqué en camera ceci : De Garant, Stonefort Insurance ass eng Letzebuerger Assurance Gesellschaft dei Garantie Financiere d'achevement ausgestallt huet op Uerder vu sengen Clienten, also Oschterbourg SA a Capelli LUX SA fiir desen Lotissement.
3. Vous êtes en possession des mails qui ont été envoyé aux acquéreurs les informant de la situation juridique et de l'origine du problème.
4. C'est le personnel de Capelli Lux sa et Capelli sa qui demande par le biais d'un portail informatiques de stonefort les garanties d'achèvement. Ils ont demandés les garanties au nom de capelli Lux SA au lieu de Ochterbourg. (Ceci est un fait)
4. Induire en erreur Le lecteur sur une éventuelle faute d'Eurocaution qui n'est ni l'assureur ni l'assuré est inexact.
5. La situation juridique est beaucoup plus complexe que simplement d'affirmer qu'il y a erreur de l'un et l'autre."
Capelli has also provided a statement (in French):
"Nous ne souhaitons pas rentrer dans la polémique de savoir qui est responsable du contenu, des éventuelles imprécisions ou confusions et de l’émission de certaines attestations de garantie d’achèvement au nom de CAPELLI LUX SA car d’une part, notre unique préoccupation est de s’assurer que les clients concernés puissent actionner les garanties dont ils bénéficient et d’autre part, nous maintenons notre position sur la pleine validité de l’ensemble des garanties.
En effet, il est bien indiqué dans le contrat d’assurance d’achèvement de BUILDERS DIRECT SA représentée par EUROCAUTION SA que le preneur d’assurance est CAPELLI SA et CAPELLI LUX SA et l’assuré est défini en annexe. Dans cette annexe, l’assuré nommé est OSCHTERBOUR SA qui porte et réalise l’opération.
De plus, toutes les attestations de garantie produites par la compagnie d’assurance visées et annexées dans les actes de vente sont nominatives, elles visent les clients, le numéro du bien vendu avec le descriptif et le prix de vente.
Il est important de souligner également que l’ensemble des primes afférentes ont été acquittées via le compte bancaire d’OSCHTERBOUR SA et que le garant les a encaissées sans jamais émettre aucune remarque et qu’encore en décembre 2024, il a été réglée la prime correspondant au dépassement de la durée des garanties.
Aussi, nous ne saisissons pas pour quelle raison, le garant pourrait refuser d’entrer en matière et nous n’acceptons pas qu’il puisse se défaire de son obligation contractuelle."
Capelli have now also distanced themselves from the expression "erreur humaine" (human error) and now prefer to speak of "non-intentional inaccuracies".
