I'm selling my cottage and the contract has been signed. The purchaser specifically said they didn't require a building inspection and that they wanted a fast settlement and went ahead and placed a deposit and signed the contract. There is no clause in the contract pertaining to a building inspection etc.
Now less than two weeks before settlement my conveyancer emailed me and said that the purchaser has requested permission to view the council house plans in case myself or the previous owner/s have completed illegal building works on the property.
Firstly do I have to give permission? If I refuse can they back out of the sale?
Secondly what happens if there have been some illegal building works completed on the property? There is no clause pertaining to this in the contract, would the purchaser have the right to back out of the sale?
Being an old Tasmanian cottage (in really good condition) I would not be surprised if there had been work completed in the past without council approval by any of the previous owners (especially considering the previous owner was a builder!). So I am concerned that the purchaser may be trying to use this as an excuse to exit the contract due to cold feet….
Hi Rainydaze
Have contracts exchanged? If so, a deposit of 5% or 10% should have been paid up by the buyer. If they were to not follow through with the purchase, I’d think they’d have to compensate you in some way (ie. forfeit the deposit). I’m not a lawyer but I know that not going ahead with a purchase after exchanging contacts is not simply dismissed.
If contracts haven’t exchanged, then the buyer can place any requests. It’s up to you to agree/disagree with these terms.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi yes, contracts have been signed and a deposit placed.
There was no clause for a building inspection, as she said she didn't require one.
Also I had a questionnaire to fill out asking about any building or renovation work that had been completed.
I had to supply any permits where they were required for work. As I hadn't completed any work that required a permit, I stated that.
I feel that the purchaser is suspicious because the house has had renovation work (ie painting, tiling, new cabinets etc) but nothing that required permits….From my understanding of how contract law works, you are only obliged to offer any agreement subject to placement in the sales contract. If it states within the initial sales document for a building and/or pest inspection .. a time allowance is provided for such. Once the final terms of the sale are met, the contract becomes unconditional, in other words .. there is no conditions that excuse the purchaser from proceeding. If neither a building inspection or subject to clause was placed before the signing of both parties to the contract, then the contract becomes unconditional upon full payment of deposit.
You dont have to feel suspicious about the purchaser. The purchaser is under obligation to commit to the contract now. Any variance from the legally binding terms is at your discretion. But i suggest you consult a lawyer for any conditions over and outside the terms of the contract. From this point onwards .. you dont even have to provide postage stamps for the purchaser.
By the way .. even if there are illegal building works, thats not an excuse to sever a contract. Any due dilligence is to be taken at the inspections provided by the selling agent, and any queries as to the state of the house should be dealt with as an escape clause (subject to building inspections and/or pest inspections within the period of seven days from the signing of the contract).
Thats my understanding of the situation based on Victorian law. Anything i've stated should be treated as a guidline based on my state law and should be verified against procedures for your specific state. In other words, verify with a lawyer for your specific state.
Thank you all for your responses so far, they've taken a bit of a load of my shoulders, though I'm still worried and waiting to hear back from my conveyancer! Basically his initial e-mail went like this:
"The Purchaser has now requested your permission to view the Council house plans and permits to ensure that no illegal building works have bee undertaken.
I therefore look forward to your instructions."I responded with:
"I'm not sure what exactly is required of me.
Do I need to give permission for them to view the plans and permits, or do I need to supply the plans?"Conveyancer:
"I understand that Council will require your consent before allowing the Purchaser to view the plans. There could be a form to sign, but I will let you know."
Then my last email from him was:
"Council Authority attached for you to sign."
Since then I have raised my concerns with him and am now waiting a response. This is all with 10 days left of a one month settlement date.
Raindayze – GO back and read XDrew's comments. Without knowing the ins and outs of Tas contracts relating to property purchase my opinion is exactly the same as X's.
I reckon your conveyancer needs to be a little more supportive of you (their client) in this situation.
While there is nothing to stop the purchaser from undertaking the inspections requested – if the initial contract did not stipulate same as a condition of the contract then they should not have reason to pull out of the deal.
You need to be phoning your conveyancer and asking these questions.
1. Is this contract now unconditional?
2. Can the viewing of Council Plans provide purchaser with any escape opportunities?
3. Is the deal now unconditional?
4. If not? What are you waiting on? (I suspect it will be finance approval)
5. When is finance due?Have a conversation about your concerns.
Email sucks in situations like this.
I emailed my concerns to the conveyancer, and explained that according to the contract I feel that I don't have to give permission to view the house plans, purely because it was not a condition within the contract. And that they should have done all those checks before signing the contract, or put clauses with the sale being subject to such checks etc.
The conveyancer replied that I was completely correct and that the purchaser was just wasting his and my time, and that they sale would go ahead regardless now.I'm a little annoyed with my conveyancer, because I feel that he should have already known this in the first place and that I should not have had to explain it to him, saving me a lot of stress. I think he went and had things checked over with the solicitor in his firm….
I prefer email in these situations, because I can have everything in writing if I need to refer to it, and it gives me time to really explain myself.
Thanks for the input everyone,
thank god everything is fine and the sale should be going ahead!rainydaze wrote:I prefer email in these situations, because I can have everything in writing if I need to refer to it, and it gives me time to really explain myself.Hi Rd,
That is good to hear – I should have qualified my comment about email as follows:
Have the conversation on the phone (allows qualifying/clarifying questions etc to be ask) and then follow the phone conversation with an email highlighting agreed points.
This way you get the best of both worlds. A conversation so all issues can be explored and a written record.
This is the trouble you get when using a conveyancer.
Even though a contract is unconditional the purchaser may still be able to get out of it in many instances. eg. If there is a search required to be included in the contract by law and you failed to include it this could be enough grounds for a purchaser to terminate the contract.
If your property did have unapproved structures on it the council could order their demolition. If this occurred before settlement then the property the purchasers thought they were purchasing would be substantially different and not the one they contracted to purchase. This could be grounds for termination too. I am not sure how Tassie contracts are worded, but it may also be possible that if a demolition order has been given before settlement then notice would be given and the new purchaser would have to comply with the notice after settlement. If the demolition order had been issued before the contract was entered into and it was not disclosed to the purchaser then the vendor would be in breach of a warranty if not disclosed in the contract.
What the purchaser should have done was to include a special condition in which the vendor ensures that all building works have council approval.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terryw wrote:This is the trouble you get when using a conveyancer.I know.. it was my own stupid fault. I actually thought he was a solicitor, because I went to a law firm to do my conveyancing, turns out they have an in house conveyancer… but at least he can refer to the soliciter I guess… but I worry he may do something silly first, and by the time the solicitor see's it may be too late…
Terryw wrote:What the purchaser should have done was to include a special condition in which the vendor ensures that all building works have council approval.That's what I thought, and pointed out to my conveyancer. Hopefully everything will go smoothly, but I have a feeling they are going to try something during the final inspection.
Regarding the final inspection, is it my responsibility to keep mowing the lawns etc until the settlement date? I'm just curious about that.
Don't worry too much. You should be alright.
Yes you should keep mowing the lawns and keep insuring the property too until settlement.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
You must be logged in to reply to this topic. If you don't have an account, you can register here.
