Hi, Can you tell me your view on this.
Investment property purchase of a 37.1 square metre studio apartment with a 10% deposit. (It is not off the plan as it is a renovated building and the studio was always the same size) Everything going fine after managing to get Bank to agree to finance as it was over 35 square metres. Survey/valuation done and it is only 32 square metres. Finance withdrawn.
On writing to vendors solicitors they advise that they sent out an amended plan of subdivision on 6 June 2011. No mention of what the amendments are. Also no alert to giving 14 days to rescind from contract because of this. Just a mention that they are enclosing an amended plan of subdivision. The studio has reduced in size by almost 16%.
Your advice will be appreciated.
Thank you
D Wallace
You could have possibly rescinded the contract. But since you had received notice you may be locked in.
what state is the property in?
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
It is almost finished but the point is that it is all refurbishment. They said it was 37.1 and it is actually 32 square metres. (and always has been but not til 2 weeks before settlement do we find out after our own surveyors report) The amended subdivision could have referred to anything as there are bout 30 properties in the development. Is a solicitor expected to get out a ruler and make sure it is 37 square metres by checing the size to scale of them all. It is actually 15.5% smaller and unfinaceable or should the vendors solicitor highlight something with such major differences. We are talking about a studio not a 5 bedroom house.
What did your solicitor say?
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
what state is it in?
Did it say on the contract somewhere that the size was 37.1m?
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
My solicitor is working on it now. (I just thought I would get an opinion on here since I was on the forum and thinking about it contantly)
It does say on contract that it was 37.1 square meteres. It is in Victoria.I am not familiar with VIC contracts, but if it was NSW you could claim compensation for misdescription. The vendor can rescind rescind if the total amount claimed is greater than 5%. I don't think the purchaser has the right to rescind
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
ok thanks for your help
Try the follow:
1. Claim 'Mistake' under contract law.
2. You have a clause in the contract "subject to finace acceptable to the buyer"?
3. You should also try the Trade Practices Act for "misleading and decptive conduct"
4. Claim against he seller for a reduction in price of 15.5% as it does not confirm to what you agreed upon: 37+sm's
5. Claim your legal costs as well.
6. Issue a notice to the buyer to retifty the fault….you contracted for 37.1sm's so you want to be delivered 37.1sm's
7. Issue a notice to the seller that you view the breach a s a fundemental breach and that the contract is recinded.If your contract is 'subject to finance' (which it should always be when you're getting finance) and you can prove clearly you can no longer finance the purchase… you're in the clear to rescind.
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