Hi, heres my current situation that I'm after some advise for.
Last year I signed a 3 way Joint venture agreement that was for buying some land, subdiving and selling.
The other 2 parties had bad credit so the loan for the land was put in my companies name.
The land was purchased in my Trust, with my company as trustee.
The subdivision is almost done, but selling the land as house and land packages has not been at all successful due to the small frontage houses we went with.. They are 6 m wide blocks (3 of them) and 55 metres long. People can't seem to see the houses as being spaciaous enough…. but thats another story.
The problem I have is that for the purchase of the land, the other 2 parties came up with $150k. The land price was $440k.
I paid the 10k deposit on the contract. Over the coming months the with the 20% deposit on the land + fees, sub division costs and loan repayments the $150k is now gone and I am left to pay the loan repayments with one of the other joint venture partners..The 3rd partner is now a broke alcoholic and I've now found out he got that $150k off of a woman he was seeing (but is no longer). This woman has since put a caveat on my land for $150k which is fair enough, but now as the land is not selling and I can't get the finance to build the houses I need to get rid of it..
There is a loan for $352k in my name and then the caveat for $150k.. I think that I would only get 400 to $450k for the land. This leaves the woman with the caveat very short so I'm sure they would block any sale..I need to get rid of the land as I can't afford the repayments. I've had the 3rd party who doesn't pay for anything sign an agrement saying that if he doesn't make equal repayments with the rest of us that the original joint venture agreement can be terminated.
Can I challenge this woman's caveat? I guess the only link to me is the trasfer from her account to mine before the property was bought… I don't want to rip her off, I just need to sell the property and can give her whats left after the bank takes its share, but its not going to be 150k. She should be suing the broke alco…
Worse still is I've heard that the woman has bi polar and her parents now have power of atterney…
Should i challenge this caveat in court? or try and get in contact with them and explain the situation…/??.. How do I protect myself……. what should I do.??
Please help, any ideas or info would be much appreciated.
thanks
Have a chat with your solicitor about your actions on the caveat. Depending upon what your agreement with the parties states as to the % that you share any profit/loss will limit what the caveator could recieve.
Also approach the sale from a different angle – speak to the agent and sell the site subdivided with DA in place for the new houses (you may be dealing with the wrong agent or the agent may have hundreds of developers lined up looking for sites – you won't know unless you ask).
What state are you in?
Sounds like that woman has an equitable interest in the property as she contributed to the purchase price. Since this means she has a caveatable interest it may be hard to remove the caveat by going legal on her, and could be very costly in the supreme court. You may need to negotiate with her, or her parents – maybe they may be more reasonable.
Get some old law textbooks – you can get them very cheap from the uni second hand bookshops and learn as much as you can about caveats and equitable interests. At the same time seek the advice of a solicitor.
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
In South Australia.
Thanks Terry
I'd argue that she doesn't have an equitable interest in the property. All she did was lend someone money. She was not a JV partner. If I lend someone money and they then go and buy a car it doesn't mean that I have an equitable interest in that car. All I have is someone who owes me money.
The JV partner, who put the money in, has an equitable interest. All the woman has is a claim against the person she loaned the money to.
It seems to me that it is very easy to slap a caveat on a property. I don't know whether you have to give reasons for putting a caveat on a property, or what sort of evidence you need to provide. The bugger is that the owner of the property then has to go to the time and expense of getting the caveat lifted which I expect will involve going to court and providing evidence to refute the claim to equitable interest.
Having said that, I strongly recommend getting legal advice. Who knows what written agreement lies behind the loan. The woman may have had a legal agreement drawn up to the effect that she has an equitable interest in the property. It is a very messy situation but one that really needs a lawyer to sort it out. You can read all you like about caveats and equitable interests but there will always be facts that you aren't aware of. A good solicitor will know what information is needed to work out what needs to be done.
Yes, lawyers are expensive, but they can often save you a lot of money in the long run.
Cheers
K
Good points Linar.
Websa, now you know why those 2 had bad credit in the first place!
Sorry, i don't know anything about SA.
good luck and keep us informed.
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 websa i read your problem as you described it on another website.
the issues are serious and complex. the fact that the woman directly transferred $150000 into your bank account would surely prove a link to you? she has a mental illness so it could be argued if she signed a contract when unwell, it would be not valid. her family have power of attorny so they are now in control and have protected her interest by the caveat on the title.
a sad and sorry tale.
it does not sound you have risked much of your own money? legal advice will be required for all parties i would think.
are you still marketing the project?
good luck and i hope an optimal outcome for you all.pully wrote:hi websa i read your problem as you described it on another website.
the issues are serious and complex. the fact that the woman directly transferred $150000 into your bank account would surely prove a link to you? she has a mental illness so it could be argued if she signed a contract when unwell, it would be not valid. her family have power of attorny so they are now in control and have protected her interest by the caveat on the title.
a sad and sorry tale.
it does not sound you have risked much of your own money? legal advice will be required for all parties i would think.
are you still marketing the project?
good luck and i hope an optimal outcome for you all.AS far as i know she has signed nothing.
No only about $20k of my own money in the project at teh moment, but I do have my credit on the line with the loan.
Land is still for sale, but no takers… Marketed as house and land packages.
Thanks
If the woman paid you directly, then i believe she has a strong case for having a beneficial interest in the property – as these funds were directly used to purchase the property.
And Pully makes a good point about the mental illness and capacity.
Very messy, sorry to say I don't think it looks good for Websa. Please seek legal advice asap.
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
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