Sold my property and settlement was supposed to be 30 Jan. It's mid Feb and still not settled. When am I entitled to the deposit

dishak on 12/02/2014 - 16:39

Hi Guys,

I need some help in understanding how this all works.

I recently sold my investment property in december 2013, and the purchaser paid the 10% deposit on the same day as it was an auction. The settlement Date was supposed to be on 30 Jan 2014, but this did not happen as the purchaser explained to my solicitor that the loan approval was not ready yet.

In exchange my solicitor sent the purchaser's solicitor a Notice to Complete which is a 14 day period in which the property must settle within, also 10% interest charged daily to the purchaser as stated in the contract at the time of Sale.

Tomorrow is day 14 and nothing has happened yet and i am very sure that settlement will not be happening tomorrow as nothing is booked in.

My understanding is since they did not complete the contract and the Notice to Complete that the 10% deposit is forfeited and i am allowed to sell the property again. But this is not the case as my solicitor has informed me that i will need to go through a court as the money is held in a trust fund.

Does any one have any understanding of this or a Law which states what happens in this situation?

And finally do i still need to pay the Real Estate agent commission fee?

Thanks

Financial

Comments

  • Daabido on 12/02/2014 - 16:50

    Your solicitor is no doubt correct. The money will be held in a real estate agent's trust fund and they won't be handing that money over to you without being absolutely sure they have to. That means a court order.

    You will have to look to the wording of your contract to see whether the commission is still payable. My understanding in Qld is that the answer is yes. Different states may have different standard wording.

    • ESEMCE on 13/02/2014 - 08:17
      +12

      Why are you asking people who have no qualifications in the law, apart from the fact you didn't like the answer from the person you pay to understand the law?

      • leiiv on 13/02/2014 - 10:25
        +1

        Perhaps he pays the wrong person. I suppose not every lawyers are equal.

      • dishak on 13/02/2014 - 17:58
        +8

        because there may be people on here who have experienced what i am going through and i may get the right answer if i am lucky. So far there have been some very useful things that i may not have covered with my solicitor.

  • Smulder on 12/02/2014 - 16:59
    +4

    This is why you pay a solicitor, so that when things don't go to plan they sort it out for you.

    If you have any questions don't be afraid to ask them, you are paying them after all.

    • dishak on 12/02/2014 - 17:07

      I have asked them plenty of questions, but it does seem that i will need to go to Court to settle this out, but my solicitor has told me that it is a very uncommon situation i am in, also the court fees would average 10-15k and i have been quoted this amount by three different solicitors, if i decide to take this to court.

      • mskeggs on 12/02/2014 - 17:46
        +2

        This seems expensive for what should be a very simple piece of work.
        Read the contract yourself and see what it says. It might have some wrinkle that is making it more difficult.
        I assume if you got a 10% deposit (maybe $30k?) then paying agents commission and $15k in legals looks disgracefully high.
        Try asking the other way - what happens if you go and sell the property again to somebody else. What happens to the original deposit? Surely the original buyer doesn't get it back, and surely is can't just sit in limbo forever.
        To me it sounds like you aren't getting the full story.

        • dishak on 12/02/2014 - 19:08

          I believe its expensive as well.
          The contract states that there should be no penalty if the contract is terminated. (I dont see this as a penalty, but i may be wrong).
          I luckily got the 10%, they asked for 5% which would of made this situation even worse.
          When i asked the solicitor that they told me that they would have to pay for my cost in regards to the sale (agents fees) and possibly leagal fees and the rest is for them which would not be that much.

          Agent Fees: $7000
          Marketing Fees: $1500
          Solicitor Fees: $15000

        • Daabido on 12/02/2014 - 19:30
          +2

          That's the price for a day in court. It's out of the reach of normal people and usually brought on my idiots who have no respect for the law.

        • [Deactivated] on 14/02/2014 - 01:53
          +2

          And what if your boss signs an employment contract to pay you $300k salary, but stops paying after $30k and gives two-weeks termination notice. Are you really suggesting the boss is entitled to get the $30k back?

          OP hasn't been inconvenienced just 14 days, but since the auction date when the house was considered "sold". The inconvenience will continue as the OP now has to start the process again and find a new buyer.

          What if the property now sells for $100k less than what the underbidder, who since bought a elsewhere, was offering, because some American Economist Dude since said home prices will fall by 50% because of a burst Chinese bubble?

          What if OP was counting on a timely settlement and really needs the money - say for a medical operation for their sick child that's scheduled next month? (edit: OK, down below it says OP needs the money for another property… but you never know, it might be an orphanage for disadvantaged kids).

          The buyer is about to miss their second deadline. OP isn't being unjust, just being sensible and asking questions to understand their options.

        • dishak on 14/02/2014 - 07:56
          +2

          Thank you for understanding… I am not trying to run away with the money and ruin their lives I would just like to know where I stand legally.

  • mini2 on 12/02/2014 - 17:06

    Yep you will need to pay the commission - from their perspective, they've already done the job by finding a buyer and got a sale. It's not their fault that the buyer failed their specific performance i.e. pay for the darn house. Keep in mind the deposit is kept at the real estate agent's trust fund…..first dibs.

    • mskeggs on 12/02/2014 - 17:42
      +5

      I would suggest cutting a deal with the agent - if he wants to keep the listing to knock 2/3rds off this fee.
      He found a buyer who wasted everybody's time. If you give him the full fee and relist he has no incentive to find a better quality buyer this time around.

      • dishak on 12/02/2014 - 19:01

        I will have to try this, I still don't understand why he should get paid when i am the one out of pocket and the contract was never adhered to. And i am not sure if i could sell this at the same price… .

        • xsacha on 13/02/2014 - 15:50

          I believe (and this may differ between states) that as soon as the agent has found you a buyer and the purchase has gone unconditional (no subject to finance, etc OR sale at an auction which it was), the seller in entitled to their full commission regardless of what happens after that.

        • mskeggs on 13/02/2014 - 16:06

          Sure. But if they give him a discount now, they will get it re-listed.
          Just because they could ask for 100% doesn't mean they will. Re-listing it would be a lot easier for him than preparing for the first sale.

  • ilostnemo on 12/02/2014 - 17:19

    I know it WA that for an auction the buyer has to be pre approved for the finance.

    Tell your solicitor to earn his pay.

    I sold my place at auction and was told if the place didn't sell, I'd be still up for the fees.

    The money should be at your real estate company, ring them and get answers.

    All these agents and solicitors are great when it all falls into place for them.

  • jo2055 on 12/02/2014 - 17:43

    Not sure about QLD, but in NSW it is Court need to ask buyer to finalise the transaction,if he could not and dont have assets- you are up for nasty surprise. You resale the property and any shortcoming, expences should be covered by first buyer, if he could pay….

  • sparkles on 12/02/2014 - 18:05
    +1

    Who the hell bids at an auction without a loan approved? Feel for you, you shouldn't have to stump up commission on a dud bidder.

    • dishak on 12/02/2014 - 18:59

      Well they seemed to have the cash for deposit, so you would think that they would be pre approved, also having 6 weeks to try and organise a loan is a lot of time.

    • snook on 13/02/2014 - 11:43
      +4

      There are different 'approvals'.

      There is the 'in principle' approval which means the bank has looked at all your paperwork and said that they can lend you X amount of money. It you look at the fine print, you will see this is a 'conditional' approval.

      Then there is the 'UNconditional' approval. This means that the bank has valued the property you are bidding on and they have given you unconditional approval for 80% of that valuation. LMI, for 90-95% LVR, is not a guaranteed option unless you pay a fee pre-auction (in NSW, $1200) to have them ok that.

      So, many people go to auction believing that have approval to borrow X amount and so they bid to that amount, only to find that the valuation is much lower and now they can't get all the funds.

      As an eg. The bank says I can borrow 1m. The house is bank valued at 850. The house (in a hotspot) will always go over value. But I can borrow a mil right! So I keep bidding. I get it for 1m. In the washup, the bank will only lend me 680 (80% of 850). They deny me LMI for 765 (90%) and I now have to find 320 + 41 for stamp duty + fees. Screwed.

      The lesson is never go to an auction without an unconditional approval. You will need to send details to your bank pre-auction and give them enough time to do the valuation and get back to you. You need to work out how much cash you have to make up the shortfall and keep your bidding within that. In many cases, what you thought you could buy, will actually be out of your reach at auction.

      It is my understanding that once the contract has been cancelled, you WILL lose your 10% at a minimum. I don't know anything about agent's fees.

  • mskeggs on 12/02/2014 - 19:21
    +3

    Also, and perhaps most importantly, you should ask your solicitor to approach the buyer's solicitor and ask what they are prepared to accept to avoid going to court for the deposit.
    If it will cost you $15k, it will cost them similar.
    Perhaps you can both agree to split the deposit and avoid the court costs.
    The agent costs you will need to sort out yourself.

    • dishak on 12/02/2014 - 21:05
      +1

      Thanks, that sounds reasonable.

  • nevbuster on 12/02/2014 - 20:44
    +4

    If you go to court, you will be going for breach of contract and suing for the full proceeds plus damages and court costs. If he's got enough assets behind him to make it worth it, you can even bankrupt him if he doesn't pay a court order. In summary, when you sue him his exposure is not limited to his deposit. We had a similar situation in WA and ended up receiving big $ in interest due to the late settlement. I'd ask you solicitor to send him a letter advising him of his contract breach and intention to take him to court seeking full payment + interest + court costs + damages and he might just find the money, and don't let him off the hook for interest when he does settle. The law is on your side with this one.

    • dishak on 12/02/2014 - 21:08
      +4

      sounds full on. I am pretty sure they has the intention to buy, but their loan was most likely not approved for the amount they needed. Another thing that has been happening lately is that the bank's evaluation of the property have been undervalues and only giving out 80% of the evaluation and not the price paid.

      • dishak on 13/02/2014 - 08:34
        +3

        why would i get negged for this, this is the current situation in which i am in, where i am looking at buying another investment which is currently selling for $465000 but the bank has evaluated it at $375000 and will only approve me for $285000 leaving me short and having to find the rest of the funds.

        This is my 4th property to purchase and this is the strictest i have ever seen the banks.

        • surm on 13/02/2014 - 14:11
          +1

          You have a lot of courage (and knowledge) to buy something at $465K when the bank values it to $375K.

        • MATTDAMON on 13/02/2014 - 14:57

          Hmmm yes, depends on who they used for valuation. I would personally be telling the bank to fob off and get a 2nd opinion first.

        • dishak on 13/02/2014 - 15:57
          +2

          I got a second opinion from a third party which evaluated the propert at at $425k, the reason most of the prices are going higher are due to foreign buyers and investors like myself.

        • epicaricacy on 13/02/2014 - 20:14
          +9

          in turn screwing it up for young Aussies trying to buy a home to live in….

        • hashtag7 on 15/02/2014 - 00:51
          +2

          Don't forget that investors create a rental market for people who cannot afford to buy.

  • nevbuster on 12/02/2014 - 22:21

    Once a contract goes unconditional, which yours must have theres no excuses or ways out. If they didn't get the finance, tough titties to them. They should have cancelled the contract when they could have before it went unconditional. If you just decided you didn't want to sell the house any more, what would they do ?

    • matt_will_fix_it on 13/02/2014 - 11:25
      +2

      umm it was purchased at auction so its unconditional on the fall of the hammer.

  • lionlion on 12/02/2014 - 22:22

    I dont think you need to go to court ,happend to my perants few years ago,realestate will release the deposit and will take their commision and you keep the rest which wont be big money and then you can resell your house again.

  • danyool on 13/02/2014 - 00:42

    Is it 14 actual days, or 14 business days? They might have a bit more time?

    • dishak on 13/02/2014 - 08:06
      +4

      14 days including weekends and public holidays.

      • dishak on 13/02/2014 - 17:50
        +3

        why do people neg if they do not know the rules. Search it yourself it includes weekends and public holidays.

  • djkelly69 on 13/02/2014 - 07:23
    +3

    OP, what state are you in? Conveyancing procedures vary greatly from state to state.

    For ACT or NSW, once you have served a NTC and then a termination notice assuming they haven't settled, you are entitled to the deposit. There should be no need to go to court to get the deposit. Are you sure your solicitor wasn't referring to going to court to either sue them for breach or to recover your costs once you resell the property?

    Speak to your solicitor about the agent's commission and check the agency agreement. May be able to avoid it as the buyer is obviously not "ready willing and able" to settle.

    • dishak on 13/02/2014 - 08:26

      I'm in NSW, I believe i can terminate the contract, and i am entitled to the money but the issue is the money will need to come from the agent which is in their trust fund.

      I will have to ask about the agency agreement.

      • djkelly69 on 13/02/2014 - 10:36
        +2

        There should be no issue getting the funds released from the agents trust account - once the contract is terminated you are entitled to the deposit. A letter from your solicitor showing the termination notice should be sufficient evidence to the agent to release (although they will likely want their commission first).

  • theguru1 on 13/02/2014 - 09:22

    Are you going to not pay the solicitor or heavily (try) discount their fees? And what about the advertisers or the photographers etc?

    • xsacha on 13/02/2014 - 16:04

      If he's going to relist it, he should get a discount anyway as there are some costs that would be shared. As you mention, photographs. It's also a lot easier to continue a listing rather than create one for a brand new property.

  • srhardy on 13/02/2014 - 09:33
    -5

    dishak, you will find your convencer will be a great help in getting info but not legal help as in NSW (and vic too i think) they no longer work in conjunction with a lawyer, so you will have to pay the big dollars unless you can do the letters of demand and your day in court (which i would do myself as the law is on your side)

    and yes, the banks are making buyers put more skin in the game now but thats all to their advantage as they see a big housing price dip and they dont want to fold like many banks overseas are doing we just dont hear about it here)

    the (not) funny thing is all that illegal boats are propping up the housing market as the suppply should be far outstripping demand as the population ages and dies. legal immigration isnt high enough at current levels to account for the steady rise in housing prices and the only area i saw as being a boom was the downsizing apartment! funny enough older people are staying on the 3-4 bedroom homes a lot longer as room in the nursing homes and retirement villages are already full with waiting lists most often (and it will only get worse)

    a few super changes forcing new retiree's to buy a pension and no endoflife payouts to spend on holidays (for most) will be the next change in super as retiree's are running out of money by 75 and will live 10+ years on the gov purse. It will have to change, its the aged and not disability or unemployed where the big welfare dollars are going to end up with the baby bubble now bursting (I look after my dad born '45)

    • snook on 13/02/2014 - 11:30
      +9

      what are you talking about - illegal boats?
      For a number of reasons, I agree with the Government's stand on turning back the boats however, the facts are there are very few people in the big scheme of things that arrive on boats AND, they are not illegal. The activity of people smuggling is illegal.

      • pmupsinep on 13/02/2014 - 11:53
        -5

        Wrong

        http://www.abc.net.au/news/2013-09-06/morrison-correct-illeg…

        Get your facts straight please.

        • snook on 13/02/2014 - 12:02
          +8

          I'm not wrong.

          Under the UN refugee convention, refugees are refugees, no matter how they arrive. Morrison has decided to term them 'illegal' and that is what the recent furore has been about. They can bandy it about ad infinitum and the result will always be the same. As long as Australia is a party to the UN refugee treaty, they are not illegal under that. If Australia removes itself as a signatory, only then can Morrison call it what he wants.

          Really, I don't want to be annoying but do some research that doesn't involve news outlets.

          Last year there were 20,000 spots for asylum seekers. Australia took just over that amount. 7,000 came via boat OR plane. There were then 300,000 immigrants via normal immigrant channels.

        • pmupsinep on 13/02/2014 - 12:08
          -5

          How about read the link, it covers everything you've written . ABC Fact Check is a respectable source, pretty disgraceful that you're saying they are lying.

        • snook on 13/02/2014 - 12:23
          +11

          "Use of 'illegal' to describe asylum seekers

          Experts contacted by ABC Fact Check say it is not appropriate to use "illegal" when specifically describing asylum seekers or refugees.

          Professor Jane McAdam, director of the International Refugee and Migration Law Project at the University of New South Wales, says that "asylum seekers are not illegal under international law".

          "By ratifying the Refugee Convention, governments agree precisely not to treat asylum seekers as illegal," Professor McAdam said.

          Professor Andreas Schloenhardt, from the University of Queensland law school took a similar view, saying "the terms 'asylum seeker' and 'illegal' should not be used together or in the same sentence"."

          While they say that those who are NOT asylum seekers are ok to be termed illegal, the verdict does not reference or address the experts on the law - it does not take into account what their own fact checks revealed. ABC is still a news source and nothing more.

        • mskeggs on 13/02/2014 - 16:14
          +5

          Regardless of semantics, the arrival of people via boat is well less than 5% of arrivals with valid visas.
          There could be no effect on property prices.

        • team teri on 14/02/2014 - 11:49

          I wish everyone read article 31 of the refugee convention before commenting on this topic.

          Quoting the relevant part: "The Contracting States shall not impose penalties, on account of their illegal entry or presence, on refugees who, coming directly from a territory where their life or freedom was threatened in the sense of Article 1 ,enter "…

          My conclusions:
          1) the entry is still illegal (and can be called that), it just can't be punished
          2) it does not apply to any of the current boat people since the "coming directly" is not given - Indonesia does not threaten any of these people and entering illegally via a third (safe) country is not covered

        • pmupsinep on 14/02/2014 - 12:19
          -2

          Exactly team teri. Even the UN refer to their presence as illegal, but obviously people know better than the UN, who write the policy. What a laugh.

        • ukmark on 14/02/2014 - 23:01
          +1

          The entry by boat in this manner is an illegal entry until the person claims asylum, at which point it is no longer illegal by the terms of convention.

          Also, Indonesia is not a signatory to the convention, so asylum cannot be claimed there.

        • ukmark on 15/02/2014 - 18:11

          Down-voted for stating the terms of the convention? How bizarre.

        • pmupsinep on 16/02/2014 - 10:26

          You can't reason with idiots.

        • team teri on 20/02/2014 - 17:27

          The wording of article 31 does not support you. It still is illegal entry, it just can't be penalised.

          Regarding Indonesia: while people might not be able to claim asylum there, they will not be deported back to their home countries, so they are safe. They are safe to walk up to an Australian consulate or to UN offices and to lodge an asylum claim there - which will then be processed while they wait in Indonesia.

          There is no lawful reason to ever go on a boat, to give money to people smugglers and risk the life of your family. The only reason is the hope to be able to skip ahead in the queue, which is very unfair to everyone else.

    • Amaris on 13/02/2014 - 18:23
      +8

      Nice one man! Blame the boats for everything just like Hitler blamed the Jews for all of Germany's ills at that time….

  • theguru1 on 13/02/2014 - 09:42

    In Victoria, it is standard practice for the deposit to be released to the purchaser (less costs) prior to settlement (subject to provisions of the Sale of Land Act), once a sale is unconditional, which an Auction generally is from signing of the contract. If the deposit was not released prior to settlement, if requested, then alarm bells would be ringing already!

    Court action would centre around claiming losses from the aborted sale and subsequent resale. Remember that the other party in your action also needs to pay their way, so there is an incentive not to go to court.

    Can't comment on what applies where you live, but would suggest contacting your local Comsumer Affairs, Law Institute or Real Estate Institute and see what they say. And of course listen to your Lawyer, but another opinion can't hurt.

  • kaos on 13/02/2014 - 10:34
    +4

    srhardy- so all those nasty asylum seekers are keeping house prices high? What utter bollocks. Now that Tony Abbott has personally made sure that no more will arrive, I'll bet that house prices go down, right? Right?

  • dktlim on 13/02/2014 - 12:53
    +2

    Is there a "Subject to Finance" condition in the contract? There usually isn't one for sales by auction, but if there is, the purchaser may be able to get out of the contract without consequence if they fail to obtain finance.

    "My understanding is since they did not complete the contract and the Notice to Complete that the 10% deposit is forfeited and i am allowed to sell the property again. But this is not the case as my solicitor has informed me that i will need to go through a court as the money is held in a trust fund."

    Look for the General Condition in relation to Default. Provided the contract wasn't drafted poorly there shouldn't be any need to go to court just to recover the deposit. However like Daabido said, you'll have to look at the agreement you signed with the agent to see if you still have to pay commission.

    Don't take any of this as legal advice. Just a couple of observations from experience.

    • ESEMCE on 13/02/2014 - 14:10

      It was sold at Auction.. therefore no clauses. When the hammer goes down, the contract commences.

      • shadowarrior on 13/02/2014 - 14:48

        Not exactly.
        A contract becomes valid only when:
        a) a deposit is made
        b) both party sign and receive a signed copy of the contract
        c) If the auction day is not a business day, then the next business day.

        • shadowarrior on 13/02/2014 - 16:08
          +1

          I stand corrected.
          Checking NSW laws confirms that during an auction sale, there is no cooling off period or window to cancel the contract. As stated by baybeans, the 66W takes care of it. The contract is enforced straight away.

        • baybeans on 13/02/2014 - 16:15

          to make it even more fun, if it doesn't sell at Auction, but the buyer then enters into contract on the same day OUTSIDE of the actual auction, they are still bound by the 66W (no cooling off) - a trick for young players.

        • Wallyt99 on 14/02/2014 - 00:11

          Most people believe that to be the case but in fact it is not. At least in Victoria. There was a case where a bidder bid at auction but refused to sign. Was sued for damages and none awarded as there were no other bidders so no loss occured.

          Contract is valid on signing.

        • theguru1 on 14/02/2014 - 08:05

          Including 3 days either side of the Auction date, in Victoria.

        • theguru1 on 14/02/2014 - 08:07
          +1

          As the Sale of Land Act requires a Contract to be in writing a verbal contract is worth nothing.

    • dishak on 13/02/2014 - 16:04

      Thanks, there is no subject to finance in the contract. The agency agreement does not state anything about a contract not going through and having to pay the Agent.

  • shadowarrior on 13/02/2014 - 14:46

    You do not pay agent commission till settlement.

    Did the buyer sign the property contract on the auction day and you (the seller) signed it on that day as well?

    If you both signed the contract, then a 5 day cooling off period starts from the business day.

    The buyer can cancel the contract within the cooling off period, but has to pay charges for doing so. After the cooling off period the buyer has to purchase the property once the conditions of the contract are met.

    The settlement date can vary, and in QLD we used to see settlement dates even extended till 90 days. Some banks do take up forever to do settlements, it is quite common. And 7 out of 10 properties we have sold, the banks were at fault taking forever to go through the settlement process (paperwork).

    Anyways, you can only keep earning interest for delaying settlement. Check your contract for Defaults Notice and Breach. It explains more info there.

    Try and get your solicitor to talk to the buyer's solicitor and chase up the bank.

    In case the buyer pulls out of the sale, then you are entitled to a compensation which also covers your agent's fees and solicitor fees etc.

    Source. I am a licensed real estate agent in QLD, even though I don't work in the industry anymore.

    • baybeans on 13/02/2014 - 16:03
      +3

      If you both signed the contract, then a 5 day cooling off period starts from the business day.

      OP is in NSW.
      Property was sold at auction, so that includes a 66W - there is no cooling off period or .25% deposit. Its 10% on the fall of the hammer.

      • shadowarrior on 13/02/2014 - 16:09

        Yep, just checked NSW laws, you are correct.

    • dishak on 13/02/2014 - 16:16

      Sorry, 66W was in place so there was no colling off period.

      Settlement Date was on Jan 30, there was extenstion asked for or granted and the settlment was booked for that date but the purchaser did not turn up.

      Notice of Complete was served to purchaser the same day (Jan 30)and today is the final day and they have not asked for any extension, the only thing they have told me solicitor is that the bank has not approved their loan yet and they do not know when it will happen.

      Interest has been charged since Jan 30.

      Thanks

      • baybeans on 13/02/2014 - 16:23
        +2

        I'm curious, what is the interest charge per day? ~$150/day?

        My money is on you coming out of this okay - the good thing for you is its an investment property, so you haven't got the headaches of doing the same thing to your vendor / the high cost of bridging finance / temporary living arrangements etc.

        Are you sleeping okay? there is nothing to worry about - its just a (big) hiccup.

        • dishak on 13/02/2014 - 16:36

          yeah the interest is about $140 per day.

          i will hopefully come out of this either with a sale of the property or some sort of compensation. And yes thank god its an investment as my cost would of been through the roof with a bridging loan.

          Sleep typical 6 hours. I am not too worried as i still own the property and i think i have the upper hand, but it is a headache to deal with and i definately would not like to go through this again whenever it finishes.

        • shadowarrior on 13/02/2014 - 17:10
          +2

          Yep, you will not be penalized in any way in this case, so don't worry about that. Your solicitor seems to be sending the correct notices at correct intervals. So you are covered from that. It's just a huge headache.

          If the buyer cannot work out finance then the buyer will be held liable for entering a contract and then not fulfilling it.

          There are protections in place for the seller to make sure some random person without any form of affordability doesn't turn up and sign contracts to a property.

          Good luck.

      • zeppeybabey on 14/02/2014 - 02:02
        +5

        If the Contract completion date was Thursday 30 January 2014, and the Notice to Complete was served on the same day, then your solicitor has stuffed up.

        A Notice to Complete can only be served on the party in default after the due date, ie the earliest that it could be served was Friday 31 January 2014.

        Best you check with your solicitor pronto in the morning what was the date of the Notice to Complete.

        If your solicitor served it on 30 January 2014, then it is void. The other side would know this and would currently be taking you and your solicitor for a ride and having a chuckle about it. If it was served on 30 Jan, you need to instruct your solicitor to issue the other side with a new Notice to Complete immediately.

        Unfortunately for you, your purchaser will have a further 14 days now (from the time the notice is served) to complete. So technically, if the new notice is served tomorrow, 14/02/2014, then your purchaser can dawdle to 28/02/2014.

        Regardless, I feel for you, sounds like you've got both a bad purchaser as well as a weak solicitor. The longer the delay, your bank interest keeps accruing daily and your legal fees become bigger. Solicitors who advise their clients that in order to recover your deposit money held in the Agent's trust account requires expensive Court litigation reeks of incompetence and/or a lack of understanding.

        If the other party is in default, you can terminate and recover your money. The are clauses in the Contract for this. Whether the funds are held in trust by the Agent or the purchaser paid their deposit by way of a bank bond/deposit bond, it entitles you claim to that money. You do not need to go to Court for this. And if it did go to Court, it would be nowhere near 15K legal costs. even if you hired the best litigation barrister in Sydney to represent you at the Court hearing, it would be nowhere near 15K.

        Anyway, you should speak to your lawyer immediately in the morning and find out what day the original Notice to Complete was served. I run my own practice and we act for hundreds of vendors and purchasers each year. Hope this info helps.

  • mskeggs on 13/02/2014 - 16:17
    +1

    Please update the thread to let us know how this works out. Good luck.

  • chiefbodge on 14/02/2014 - 00:02
    +5

    Wow only 14 days past settlement date and you want to take the deposit and sell the house again and you're talking about going to court?

    I agree with charging interest for every day overdue but these things happen. When we bought our house we made an easily achievable settlement date and did everything we possibly could to get the bank everything they needed for our loan straight away. It wasn't a complex loan and they didn't require any further information from us but apparently they had a huge backlog of applications to approve and took until right on the settlement date to approve us.

    A similar thing happened to a friend of mine recently and the settlement of the property ended up 30 days overdue. I think some patience and understanding is require sometimes.

    • ESEMCE on 14/02/2014 - 08:34
      +5

      It's all well and good to be patient when you're getting feedback from the other side.. in this case, the OP has heard nothing at all.

    • xsacha on 14/02/2014 - 12:48

      How about this: got approved in about a week (after spending time looking at different banks and getting conditional approvals), they even emailed a document saying 'unconditional finance approval'. So then I notify that the finance clause has been met. 2 weeks from settlement, feeling pretty comfortable.
      Then it took them 1.5 weeks to send out the contract to sign! Despite asking them every day where the contract was. They ended up sending it by overnight courier (left 5pm, arrived 9am next morning) and all the documents were dated from 1.5 weeks ago. Huge rush to get settlement done in time.

      So, even unconditional approval doesn't mean too much in terms of a timeline. Some things can take weeks that require no input from bank or yourself. Just the bank having a huge backlog or similar.

  • whatthecrappin on 14/02/2014 - 18:20
    +1

    I was in a similar and ended up charging them interest. Personally I was hoping it would take longer as I'd already moved out :D

  • [Deactivated] on 15/02/2014 - 18:21

    I purchased a property in December a few years back.
    30 days, no problems - preapproved by the bank - had a sizable deposit - easy!

    But … due to the end of year break … everything seemed to grind to a halt (banks/ conveyancers/ etc).

    This might just be a simple delay that's out of their hands - no dramas.
    Maybe just call their conveyancer or have a chat with them directly.

  • justjules on 18/02/2014 - 21:10
    +1

    No idea if OP has solved his problem but this link will give all the info you would ever want about the right to the deposit
    http://www.tved.net.au/index.cfm?SimpleDisplay=PaperDisplay.…

    If you were my client I would be getting regular updates from the other side and cooling your heels on termination. All well and good if the other side is public company, government department or commercial developer who should have had their finance in order well in time, but if your purchaser is just a regular couple or individual being jerked around by a big bank or financier, and ultimately you have evidence that the delay will be resolved reasonably soon, I would encourage a little sympathy and patience at least for a short while after the Notice period expires. Far far better to get the property sold than find yourself mired in a protracted Supreme Court blue over forfeiture of the deposit or payment of the difference in sale prices.

  • dishak on 19/02/2014 - 11:38
    +1

    So,

    The Notice to Complete was served and finished on Friday Feb 14, this day came and nothing happened not even a call from the purchasers side.

    I contacted my solicitor on 14 Feb and asked "what is happening" her response was "i will call them and see whats happening" in which she did and they said "everything is sorted out, Tuesday will be settlement"

    Tuesday comes and a call from the purchasers solicitor at 9am who says " we are not ready to settle as we are waiting for a discharge from a property that the purchaser is selling" This was our first knowledge of this. So my solicitor asked them to write a letter to us stating this and what day they expect to settle.

    Today i call my solicitor and she said she has received nothing from them except that they will be ready to settle soon.

    My solicitor asked me do i want to keep waiting or do i want to terminate.

    I feel like i am being given the run around with the purchaser's and my only option is to terminate as they can not answer a simple question of when they will be ready.

    Also now they have breached the contract twice now and still don't seem to care about it or have an urgency to complete.

    • mskeggs on 19/02/2014 - 14:27

      If it makes you feel better, a similar thing happened to me, but in the UK.
      The upshot was I didn't get any compensation for being mucked around, but I did end up selling the property for substantially more to somebody else.
      In your situation, I would be stating that you require daily updates from the buyer on their progress.
      I feel you are being given the run around too.
      Even with the best view of your buyer, they are delaying you substantially. My bet is they actually can't get bridging finance, so are getting you to supply the bridge.
      I think it is reasonable to demand the letter that was requested plus evidence that their story is genuine (copies of their sale documentation maybe?) so you can make an informed decision on whether to grant them more time or proceed to cancel the sale and forfeit their deposit.
      Again, if it were me, I would probably pick up the phone to the buyer's solicitor myself and advise this is unacceptable and you need a,b & c (where they are the assurances/updates/documentation you feel are reasonable).
      I think you are being very lenient because this is an investment and you aren't facing eviction etc. yourself. It's time to be more demanding.

Login or Join to leave a comment
Login Join