Off The Plan - Contract Cancelled

Ldanielytf on 23/12/2017 - 10:41
Last edited 24/12/2017 - 10:14 by 1 other user

Fitzroy North - Property Purchased Contract Cancelled (Off the Plan)

I have put down a deposit for in the year of 2013.

The developer is unable to complete building in time to deliver to the purchaser.

What do you think?

Is it advisable to seek a lawyer to:

(a) extend the contract until the building is finished and to be delivered;

What I can see is that if I want to stick with the property, I have to pay for the current market price.

Example,

Price for the time I signed the contract is $970,000 .

Today's market price is 1.2 million .

Please advice and give your opinion if possible.

Thank you.

Facebook: https://www.facebook.com/MelbourneOffThePlanBuyers/

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Comments

  • TChalla on 23/12/2017 - 10:54
    +1

    Check for sunset clause in your contract. If there, not much point getting a lawyer.

    But this could help, depending on timing if your contract.

    https://www.holdingredlich.com/property-real-estate/sunset-c…

    • danielytf on 23/12/2017 - 11:11

      The contract is signed in year 2013. The sunset clause is starting from 2015.

      What do you think?

      • djkelly69 on 23/12/2017 - 22:18
        +2

        That is NSW legislation, it won't help you in the slightest. Don't know if there is anything similar in Vic.

        Also if you signed in 2013, that is 4 years ago, not 2.

  • BensonP on 23/12/2017 - 10:56

    Hang on, don't you just pay the price you agreed upon when signing the contract? So if you signed at $970k, you pay $970k.

    I'd look at getting the contract extended if the property is actually $1.2 mill.

    • danielytf on 23/12/2017 - 11:11

      Hopefully I can negotiate with the vendor.

    • airzone on 23/12/2017 - 15:33
      +6

      Yeah, but in the meantime the property value appreciates.. So the developer is suddenly "unable" to complete the contract. Once they are all rescinded, they resell again at 1.2m.. 23% more money for them.

    • GaryQ on 24/12/2017 - 07:21
      +2

      The developer uses the deposit as instant cash flow / collateral. Waits until the contract is about to expire, then decides there is an 'unforeseen impediment to completion', rescinds the contract, and re-sells the nearly ready units for whatever they are now worth

      You'd better believe that if prices had dropped, the units would be ready on time and for full ticket price

  • 2jzzzz on 23/12/2017 - 11:22
    +17

    Big class actions over this already. A way for developers to get capital, build property, refund initial capital and resell at a big profit for higher prices.

    • jimbobaus on 23/12/2017 - 12:19

      This!!!

    • sane on 23/12/2017 - 13:00
      +4

      Yep, it's a known con. If the price of the property has gone up it's a nice way for the developer to benefit. Risk is all against the person 'buying' off the plan.

      Basically if the price goes down - you get to pay the higher value. If the price goes up they can invent a reason to call up the clause, hand the money back, and then sell for the higher price.

      Oh, and they get to benefit from the money up front too.

      Net result - don't buy off the plan, and certainly don't do so with dodgy clauses.

  • JIMB0 on 23/12/2017 - 11:36

    I thought the sunset clause was to protect buyers from a builder that never completes the project. However it is being used by the construction companies to pocket the increase in value of the property from the time the contract was signed. I hope the apartment market crashes and they are left with the losses.

    • conan2000 on 24/12/2017 - 08:28
      +1

      I wouldn't be expecting the builder to put anything in the contract to protect the buyer!

    • HeWhoKnows on 24/12/2017 - 17:11
      +1

      On the other hand , if there have been genuine delays and this has resulted in significantly increased costs, then the builder has very right to protect themselves from losses as well. Such agreements should be to the benefit of both parties. The other option is the builder goes bust and everybody loses.
      But yes, these contracts are definitely never written in the interests of the buyer.

  • shadowarrior on 23/12/2017 - 13:30

    Pretty known con and been used in bunch of states. There was a big hoo haa about this near Sydney as well few months back where the developers pulled a similar trick to a whole group of buyers.

  • chumlee on 23/12/2017 - 15:11
    +1

    Forget it. Developer deliberately took to long as they are worth more now. Very common situation

  • BertieBrown on 24/12/2017 - 08:14
    +1

    Far out. I didn’t think I could think any less of big developers, I guess not. This stinks. How is this allowed to go on in this country?

  • Peck on 24/12/2017 - 12:42

    I think that 'Off the Plan' are being tightened up in NSW because of that scumbag Mehajer. About the only good thing to come from him!

  • HeWhoKnows on 24/12/2017 - 17:03
    +2

    Mate. I think you are seeking advise in the wrong place.
    If you read your contact you will find the developer has every right to do this.
    Hence you solicitor is the person to ask. Not us.
    Probably Tough cookies as they say

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