Within the next couple of weeks we shall be settling on a property that currently houses a trucking operation. The Sellers are the trucking operators and over the previous 10 years or so have accumulated hundreds of tonnes of ‘vital equipment’, all up against the fence (for 100m or so) happily rusting away.
I have grave concerns that it shall all be left there when they vacate on settlement. I have expressed these concerns to both the agent and Sellers in writing, with little action if any happening in the past 6 weeks since it went unconditional.
This is not something that can be cleaned up in a day or two, and needs heavy equipment to shift it.
I’ve warned the Sellers that I am willing to hold back $ 25K at settlement to ensure either they clean it up or get contractors in to do it.
Meanwhile, we won’t have full enjoyment at 12 noon the following day after sett. as there could be a mountain of metal garbage on the prop.
What are my recourse actions other than the above ?? My sett agent reckons we can charge them penalties – how do we get them to pay ?? take it off the total ??
Cheers,
Dazzling
“Go hard or go home”
It may be a bit late, but couldn’t you have made it a condition in the contract that you would only settle if the junk was cleared? Also, if you hold back $25k on settlement, won’t that mean you are in breach of the contract? I know it’s a difficult situation, maybe speak to your solicitor about this and see what they say.
Regards,
OziDazzling,
Can you not simply hold back settlement if they have given vacant possession? Typical contracts do have clauses on vacant possession however am not sure if you can hold up settlement over it.
Another suggestion maybe that you could contact someone like Sims Metals who deal in scrap and get a few bucks for the scrap metal. Could always make the phone call and see if they will pickup, then call the agent and say if it isn’t gone by settlement it will be shortly thereafter. For scrap, you can get around $60 -$100 per tonne.
Just a thought. cheers
Jan
Jan,
Thanks for the suggestion about Simsmetals. It’s something that was tossed around a few weeks ago as a very neat solution to the problem. On initial enquiry Simsmetal said for that amount of weight and the location they were prepared to come and pick it up themselves (the yard is literally around the corner from one of their depots).
We thought we were onto a winner there for a while until I mentioned we were clearing it up as part of settling a new property and the junk was likely to be left there from the Sellers. They said if we didn’t have legal title to the ‘goods’ they were not prepared to touch it and didn’t want to get involved.
I think the best recourse offered so far is just not to settle until it is clear and clean…puts the economic interest back onto the Sellers to do something about their junk.
Thanks for all of the suggestions.
Cheers,
Dazzling
“Go hard or go home”
Hi
I do think that once you settle on a property, whatever is left there becomes yours with the property. Check it out with your solicitor.
But I also agree with Ozi, be careful as holding back may cause a breach of contract, so check it out. Dont do anything without your advisors nod.
cheers
ToniWell,
Settlement day has arrived, and as expected, the mountain of ‘vital equipment’ is still there.
All of my advisors are saying we don’t need to settle until it’s all gone, and a letter to that effect has been issued to the Seller’s settlement agent.
The sticking point is the Sellers saying that most of the junk is not theirs, and is the other tenants. We are saying we are buying the whole property – not just selective bits of it, and shuffling junk piles from one corner to the next doesn’t constitute clear and vacant possession. It looks like a battlefield still.
We are imposing penalties of $ 191 / day against the Sellers for delaying settlement as per the contract…won’t know if this will hustle them up or not.
Anyone been down this road before ??
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Hi Dazzling,
What are your chances or actually getting the $191/day if they are deneying the rubbish is theirs in the first place?
Do you actually know who the tenants were and can you contact them directly? As it is supposed to be vacant possession, the onus is on the seller to coordinate this though. What are the laws respecting tenants goods on a property which changes hands? Who actually owns the goods?
Interesting problem, let me know what happens!
Can’t you just give sims’ number to the sellers? Surely they’d organise the removal if there was money in it for them?
We have been cleaning up our properties in preparation to finding a buyer. We have been receiveing $90 a Tonne for scrap steel. (There is a world shortage of steel and coal prices have gone up too.Somehow they’re related.) We only have a small truck and a forklift to load however a good load is worth $150+. Anything not considered good heavy scrap steel will usually attact a small payment or we take it to a dealer that lets us dump it out the back for nothing. Beats having to pay the council to take it to the dump!
Jan,
Chances are outstanding of imposing the penalty…it just comes straight off the top of the purchase price. Settlement agent and I have been down this penalty track 2 years ago, but that time it was because the Seller lost the Transfer of Land document for about a week, before finding it in her Singaporean kitchen cupboard !!!
This time the mechanism of imposing penalties on the Seller is the same, but the underlying reason is different.
Literally, it boils down to who is responsible for tenants junk everywhere, the tenant or the owner ?? Especially when that junk overflows onto common areas within the remainder of the property that other tenants have access rights to, and make the property unsightly for new prospective tenants. We are arguing it’s the owner, they are arguing it’s the individual tenant.
Leaving the issue for 3 months to fester has been the Seller’s downfall, despite repeated warnings and concerns. Trying to sift and sort hundreds of tonnes of junk in just a few days is the root cause. They’ve had 90 days to clear it up, but being slack, left it to the last minute…and now they are going to pay for being disorganised and dishevelled.
The end result is a list issued to the Sellers to rectify before settlement can take place….the delay and amount stripped off the purchase price continue to rise….
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
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