Could someone please advise what happens with a client's deposit in a wrap situation when the client defaults on payments so that the contract is terminated? Also, what happens with all payments made to date?
Depending on the wording within the installment contract the contract is terminated and the deposit and all payments along the way are forfeited.
Richard Taylor | Australia's leading private lender
Qlds007 wrote:Depending on the wording within the installment contract the contract is terminated and the deposit and all payments along the way are forfeited.Yep, then the person who defaulted on the wrap retains a savvy lawyer to challenge the contract in court on the grounds of justness, and despite the contract having watertight wording, the court finds that it was indeed unfair in its terms.
https://www.propertyinvesting.com/forums/property-investing/creative-investing/23243?It could be unjust because the vendor failed to verify the ability of the 'buyer' to meet the terms, or it could be because the vendor failed to set a 'fair market price' for the sale by deliberately overpricing, etcetera. Wrap contracts are not nearly as watertight as they seem, but generally, the buyer wouldn't have the funds to challenge them, thus the vendor wins by default!
F. [cowboy2]
Oh, I forgot. That thread mentions an appeal – the case did indeed go before the supreme court and the original finding was upheld.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
