Hello,
What to do next when the property buyer will not settle? In February 2009 I sold my property, an unconditional contract and an 8 week settlement, the buyer has paid a deposit of approx. $38,000 not 10%. That should have settled in early April but it did not and the buyer and his conveyancer did not contact us to say they were having any difficulty or whatever.I did contact the buyer and he was vague but said he would have to speak with his conveyancer as he had left it with him and he said he would look into it.
My conveyancer then sent a request to settle on a specific date in mid May, it did not happen and still no contact from the buyer or their conveyancer.
Apparently at this point in time it is within my rights to cancel the contract keep the deposit and claim penalties for each day the settlement monies have been outstanding along with other costs.
I have been reluctant yet to do this as my aim is to settle and I thought maybe a bit more time would help, however I feel this may have to be the next step and soon.
I'm interested to know if anyone else has been placed in this situation and what resulted in your situation if there is any light you can throw on this predicament I would be anxious to hear your thoughts.
Regards,
Anxious.If you want to pay for some advice I can recommend a barrister who is arguing a similar matter in Court at the moment.
I agree that you need legal advice – that is it why it is best not to use a conveyancer for conveyancing!
In NSW you can terminate the contract by issuing a notice to complete and waiting 14 days. If they do not settle by then you can terminate the agreement and keep their deposit. If they have not paid 10% deposit, you may be able to claim the remainder, depending on the wording of their contract.
You can also sue the purchaser (this is under clause 9.3.1 of the standard contract of sale) and claim for any shortfall on the resale (within 12 months) and for costs and reasonable expenses incurred due to their non-complicance.
Before you start suing you should establish if they have any other assets – or you may expend money in legal fees and win, only to find they declare bankruptcy.
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
Hi,
I should have said that this is in South Australia so some legal aspects may be a little different.Thank you Rhys Roberts I may need a barrister, if he is in SA let me know.
Terry It seems it's time to get some legal advise. Also in SA as in NSW you can issue a notice to complete and this has been done and now I can terminate the contrct. From what I hear after a person cancels the contract the purchaser does not want to lose the deposit so will then slap a caveat on my property and try to regain their deposit.
They'll get a lawyer, I'll get a lawyer, they'll send letters to each other for a while and at great cost, it will eventually go to court.
I can only wonder how long this takes, how much it will cost and in the meantime I can't do anything with the property and what will be the outcome.
Thanks for your comments, if you have any thing to add or anyone else has some experience in a situation like this please comment.
Regards,
Anxious.You just can't ring up a barrister (unlike a barista) and get them to do your bidding. You will need to get a solicitor to instruct after the solicitor has gone through all of the motions. AS pointed out above either you serve notice to complete (which you have done) then seek to terminate the contract or you can sue for specific performance or terminate the contract and remarket it (knowing that you can accept $38k less as you have got it from the previous failed contract). What is your REA saying? They have an interest in this deal as they don't get commission if it falls over.
I see your point. if they slap a caveat and challenge the withholding of deposit it could take years to resolve. Then you are stuck with the place. Best to speak to your lawyer, probably while trying to resell asap. They may not have grounds for a caveat if they have breached the agreement and it is properly terminated. They will no longer have an equitable interest in the property then.
good luck and please keep us updated.
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
Hello Guys,
I appreciate your views. As you mentioned I'm at that point to either terminate the contract or as Scott suggested sue for specific performance.I did not know you could do that but that is what I would tend toward rather than terminate. I also fear that the market may have slipped back over this period of time possibly more than double the $38k. So to re market may not produce a lot of joy.
There is no REA involved it is private. I also don't know why the buyer is not settling from what I could understand they were not having trouble with finance this left me thinking that they had just changed their minds to buy for other reasons.
I have also been considering offering them some vendor type finance agreement if that is the case.
Terry as you mentioned I really don't want to tie this up in court. The place is not in rentable condition and would need thousands spent to make it so. Meanwhile my holding costs are around $700 pw. in interest only loan.
I'm still open to more ideas or questions, if anything comes to mind, please let me know.
Regards,
AnxiousTerminate the contract. As well as keeping the deposit, you can sue them for any further losses that you incur in reselling the property. If for example, the sale price is $500,000 and you can only resell it for $400,000, you can sue the purchaser for the $100,000 shortfall as well as extra advertising costs etc.
Yes they can slap a caveat on the property but if you have issued a correct Notice to Complete and the purchaser has failed to complete then you have a contractual right to terminate. If they do put a caveat on the property, you can then go to court and get the caveat lifted and have the purchaser pay your legal costs (if you have done everything correctly).
This purchaser clearly doesn't want to proceed with the purchase. If they did, they would be asking for extensions. They haven't done that. They obviously can't rescind either, otherwise they would have done so. It is up to you to do something.
You should get legal advice though. I have an excellent property lawyer in Adelaide. PM me if you want details.
Hello,
thanks Linar as you and the others have suggested it does seem to me that I do need to follow this course of action.I do need to seek out some legal advice and I am interested to know your lawyer contact.
If any one has actually been through this, either as a buyer or seller, I would like to hear of your experience.
I'll keep this updated so you know the outcome.
Thanks,
Anxious.Ive been in real estate buying/ selling and advice for nearly 15 years now so have seen it all. There is no time to waste as time is money and yours dont forget in holding costs/ lost opportunity.
The buyers are not complying or offering any decent reasons, requesting extensions, so please look at your facts.
Step 1- Find the best solicitor you can in S/A
Step 2- If they have not complied with what you have served to date, then seek to terminate and keep deposit
Step 3 I would be getting the property either up to standard or a decent standard to sell
Step 4- I would also be finding the best agent possible to market the property for the best price you can achieve and keep moving forward.Yes I have seen people not settle, refuse to settle, declare all weird and wonderful reasons/ excuses- cat sick, forgot to call, had a fight with the wife, cant find their cheque book, don't understand the docs, their brain not working, partner left them etc- so you just need to take swift action and treat it like a business as these people are not knocking down your door to do the right thing or come to some amicable correct arrangement.
Remember you are not running a lifeline shop, you are running a business and loosing opportunity/ and $$$ now and being stuffed about to be honest and taken advantage of.Hello businessglobal,
You're quite right, time is wasting, holding costs, lost opportunity and the buyer has not complied and I am being taken advantage of. These people do fit into the category you mentioned "seen it all" mob.These people made no attempt to keep in touch or tell me anything, I had contacted them once and at that time he was vague said he'd left it in finance guys hands, conveyancers hands even said my conveyancer was holding it up and didn't know what was going on.
On June 2, I sent a letter threatening termination, penalties, legal action, resale and any shortfall in price etc. I sent it registered and person to sign and signature to be sent back to me as confirmation. Mid last week I called the post office he hasn't picked it up and still not picked it up by today.
However mid last week I faxed it to my conveyacer, he faxed it to their conveyancer and finance broker, so the buyer was contacted by the broker and the broker called my conveyancer and said hold up on further action, we'll settle Tuesday.
That was something I was going to have to see to believe I thought this sounds like more bullshit. After all it was supposed to settle 3rd. April nearly about 11 weeks ago, I can tell you I'm totally pissed with it all.
Surprise surprise, I thought this was not coming, Today it settled! I had to give the key to the guy, so I rang and told him he can find it under the mat he said sorry it took so long and nothing else. so to this day I still don't get it, weird mob.
They paid rates and taxes etc, since orig settlement date and nearly $10,000 in penalties.
Needless to say today is a great day! I would like to say thanks to all who put forward your valuable comments, much appreciated, thanks again.
Regards,
David.Sorry, my contacts are in Victoria.
Well done. Sounds like the best case scenario.
I assume the purchaser was having money problems and hoping you would just let it slide, but on communication with your conveyancer, realised that this was not going to happen. I think he/she realised that it was far cheaper to pay the penalties than to have you terminate the contract and be up for all your lost profits.
Cheers
K
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