Hi Everyone,
I just found out today that one of my properties did not settle today, the purchaser is a pty ltd company, now my question is does the director that signed the initial sales contract have any personal liability or can he hide behind the protection of the company structure?
Thank you for your replies.
Regards,
Charlie
Hi Charlie,
the company may well be a two dollar corporation. If he is the director there may be recourse against him, however he may have no net worth, viz: no assets in his name or a high level of debt compared to his gross value/worth. You need legal advice.
What was the reason that settlement wasn't effected? What have your solicitor/conveyancer informed you? Is it merely a delayed settlement?
Some more info on your situation may help the opinion given to be more appropriate to your case.
Your solicitor will probably have to wait about 2 weeks before they can issue a notice to complete. I hope you aren't hanging out for the funds.
Is signing a contract where a company has no funds to complete (or no intention to do so) deceptive conduct under the TPA? That would make the signatory a defendant perhaps?
cu@thetop wrote:Is signing a contract where a company has no funds to complete (or no intention to do so) deceptive conduct under the TPA? That would make the signatory a defendant perhaps?Probably, but if they have no personal assets………..the legal chase becomes expensive
A company signing a property contract when it has insufficient funds to complete is considered insolvent trading and an application can be made to ASIC to place the company under administration.
A company signing a contract to buy property when it has no intention to do so could arguably be considered deceptive conduct but it would be difficult to prove that it did not intend to buy the property at the time it entered into the contract.
My advice (as a lawyer) is to get your conveyancer to send the purchaser a "notice to complete" which means that the purchaser has to proceed to settlement within x number of days. If the purchaser can't settle, keep the deposit that they paid and move on. Pursuing any legal action will be very expensive and unlikely to get you anywhere and in the meantime your property will be off the market until the legal action is resolved.
You could try to force the purchaser to proceed with the purchase and try to bluff them into thinking that you will start legal action but I think the best thing for you to do is to terminate the contract, pocket the deposit and put the property back on the market.
Bummer for you though. I hate it when that happens.
Good luck
K
I hope you have the deposit. I would keep it and start again. Ask your lawyers opinion to give you the options available.
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