Hi
We have sold a block of land to a Cash Buyer with a 2 week settlement. All is signed and unconditional.The buyer told the agent a few days ago that they were terminating the contract due to being told the building envelope was 1000sqm, but it's only 800sqm. The agent got the size of 1000smq via email from the council when she intially took on us as clients. She can't remember if she told the buyers or not, and if she did if she told them before or after the contract was signed. She does acknowledge that she also has plans that state 800sqm.
We've spoke to council & they will only approve a 10% increase to 880sqm. Teh buyers said no to this. They are yet to put in writing that they wish to terminate the contract.
They did however a few days ago ask for a 3 day extension on the settlement as the funds are coming from the UK. Then they say they want to terminate. We have also found out that they put an offer on the house next door & then withdrew from it.
As far as I can see the contract is unconditional and must go ahead. If the building envelope was important to them they should have got the details before they made the offer. I also believe the buidling envelope is only a warranty to the contract and not a condition (from my very limted knowledge of contract law). And would not entitle them to terminate the contract.
Does anyone know where we stand on this or have any suggestions?
It just sounds like they don't have the money & want out.
As far as I'm aware, unless it's stated as a condition on the contract that they require the council to approve a 1000sqm building envelope, then they cannot terminate the contract, of course unless they were misled by either you or the agent.
All that being said, you only have a legal recourse in this situation, so you can either decide to let them walk or fight them legally. Did they pay a deposit on signing the contract?
An unconditional contract is just that.
As long as there was no misrepresentation then the purchaser should have checked out the BE prior to contract.
Get your Solicitor to write back and tell them that you do not accept the termination and serve them notice to settle.
Remember your selling agent will probably want to take out their sales commission from the deposit prior to you receiving anything.
Richard Taylor | Australia's leading private lender
Thanks for that. Unfortunately they agent only took a $500 deposit.
We have found out that our agent faxed over to the other agent (before they signed the contract) all the land plans & titles etc because he vendor had asked for dimensions of block. The block dimensions are shown by the envelope size is hard to read (as they're all faxed copies).
I know this is going to come down to whether we want to pursue the buyers legally or not.
Narelle
Personally in todays market where properties are taking longer to sell I would go for them with vigour.
Richard Taylor | Australia's leading private lender
Do they have the money even if you persue them. It may cost more than it is worth. I am guessing the contract is in QLD where the agents handle the exchange rather than a solicitor. Also have been biten here, though I was the buyer, and now always insist on there being a solicitor, at least on my side before anything is signed.
MickMick
We dont have an physical exhacnge of contracts here in Qld.
Richard Taylor | Australia's leading private lender
Make sure that you have all the evidence and not misled any information given to the buyer
Expected long and lengthy battle.
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