Legal Problems in Cancelling Purchase of an off The Plan Property

kyoba on 18/12/2017 - 20:04
Last edited 18/12/2017 - 20:15 by 1 other user

Asking for friend but have taken a keen interest after finding out the details of the situation and trying to look for a solution to the matter.

Basically i'm trying to find out what's the best way to deal with this situation. From the beginning, my friend purchased an off the plan property in NSW. Tragically, not long after the partner passed away due to unforeseeable circumstances. Now the friend has engaged their solicitor to rescind the contract, in order to get back the deposited paid. The solicitor has started this process, which involved a fee from the vendor solicitor. This has been paid however the vendor solicitor is now saying the that they are waiting for execution of the deed from the vendor. The vendor is infact one of the city councils.

Now my friend's solicitor has followed up many times all met with the same explanation. It's been almost a year since the the deed of rescission was submitted. Now my friend is stuck in a precarious situation and had to leave Australia for an extended duration which has left matters hard to deal with. Hoping to steer things in the right direction, i spoke to my friend's solicitor who has recommended this be escalated through to Fair Trading.

Is this the best way forward? Has anyone else come across a similiar situation and how did you escalate matters to resolution?

TLDR
Trying to get deposit back from an off-the-plan property purchase. Legally nullified contract due to reasons related to mortality but vendor solicitor floundering with no results.

Financial

Comments

  • cuteduck on 18/12/2017 - 20:37
    +2

    why not you post the case scenario on www.propertychat.com.au

    You will get a better answer there.

  • Master Bates on 18/12/2017 - 20:39
    +2

    Can't help, but that's a good TL;DR.

  • whooah1979 on 18/12/2017 - 21:03

    http://www8.austlii.edu.au/cgi-bin/viewdoc/au/legis/nsw/cons…

    (3) If a notice is given in accordance with this section:

    (a) the contract is taken to be rescinded from the time it was signed, but subject to the rights and obligations conferred by this section, and

    (b) the holder of the contractor licence may retain out of any money already paid to the holder the amount of any reasonable out-of-pocket expenses the holder incurred before the rescission, and

    (c) the holder of the contractor licence must refund all other money paid to the holder under the contract by (or on behalf of) the party who rescinded the contract at or since the time the contract was made, and

    (d) the party who rescinded the contract is not liable to the holder of the contractor licence in any way for rescinding the contract.

    http://www8.austlii.edu.au/cgi-bin/viewdoc/au/legis/nsw/cons…

    (6) A contract can be rescinded under this section even if work has been done under the contract at the time of rescission.

    (7) If a contract is rescinded under this section, the holder of the contractor licence is entitled to a reasonable price for the work carried out under the contract to the date the contract is rescinded.

    (8) However, a holder of a contractor licence may not recover under subsection (7) more than the holder would have been entitled to recover under the contract.

    that'll have to do for now. baked salmon and hash browns is waiting. gl.

    • kyoba on 18/12/2017 - 21:26

      Just to clarify the right to rescind has been passed. The problem now is with the vendor not "signing" off, although i'm not in the position to answer exactly what the signoff requirements are. I'd like to find out, but may not be possible for me since i don't have any legal say in the matter (although not entirely impossible via a power of attorney for example). Although i just wish to seek a difference of opinion and ideas if anyone has encountered similiar situations.
      The other road block is the vendor being the city council. All i want to find out is who, within the city council, what exactly are they signing off, and when will they be doing it or what are the problems involved. I'm thinking if there are ways to escalate the matter, if not with the vendor solicitor then maybe with the council but i'd need to know who would handle this sort of enquiry.

    • djkelly69 on 18/12/2017 - 22:16

      whooah, that section (and Act) is irrelevant. An off-the-plan contract is not a contract for residential building work, and the HBA does not apply. Additionally it is way past 5 working days after exchange.

      kyoba, I would be getting your friend to ask their solicitor to put something in writing to the Vendor's solicitor clearly setting out the time which has elapsed since a rescission was agreed to and the requested fee paid, and seeking both a reason for the extended delay and a timeframe in which the deed of rescission will be executed by the Vendor and returned. Yes it can take a little while for things to happen when a council is involved, but a year is about 11 months too long. Failing that, your friend's solicitor should threaten to write to the law society to outline the tragic circumstances and the extended and unjustified delay by the vendor/council.

      Hate to say it, but your friend might also ask for a copy of the correspondence sent to the Vendor's solicitor.

      There is also nothing to stop your friend contacting/pestering the council directly to try and ascertain who's desk it is on and when it will be actioned, writing to the council head, etc.

      I assume your friend hasn't paid any stamp duty, but if they have, be aware that they will be entitled to a refund once a deed of rescission is signed (by both parties).

      Also are you sure a council is doing an off-the-plan development? Seems very unusual to me given the potential conflict of interest (ie. they are both the applicant and approver of any development applications).

      • whooah1979 on 18/12/2017 - 22:30

        An off-the-plan contract is not a contract for residential building work, and the HBA does not apply.

        i'm sure you know more about this than me. i'm just going by nsw fair trading link.
        http://www.fairtrading.nsw.gov.au/ftw/Tenants_and_home_owner…

        Cancellations
        The legal right to cancel the contract under the Home Building Act 1989

        could you please tell us which legislation covers off the plan purchases?

        • djkelly69 on 18/12/2017 - 22:39

          Conveyancing Act is the main one which covers the contract. It has a similar cooling-off period, but as mentioned it is long since expired.

          Just to clarify, the HBA probably does apply for issues with the Home Building Compensation Fund, but they would be very rare and that scheme only applies to unit buildings which are 3 storeys or less.

        • whooah1979 on 18/12/2017 - 22:53

          @djkelly69:
          thanks for that.

      • Baysew on 18/12/2017 - 22:41

        Also are you sure a council is doing an off-the-plan development?

        Might have been Salim Mehajer.

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