I am selling my black of land and signed a contract with the purchaser.
The contract had a vague clause stating “subject to a satisfactory bank valuation by Westpac by date x”.
Cooling off finished and the next day the purchaser advised the bank valuation ‘didn’t come up’ and they are withdrawing.
They have not yet paid their deposit due yesterday. I have not seen evidence of the bank valuation.
The clause states that Westpac must do the valuation but it does not define the value of satisfactory nor does it define satisfactory by whom.
What do you think I should do?
Hi,
Not a lot that can be done to enforce the contract with that clause. The main thing is to learn from it and not accept a clause like that in the future.
Regards
Gibbo
hi gibbo
It was a super quick settlement, so i didnt think i had too much to loose … in fact, i haven’t really lost anything except the potential for that person to buy the land .. perhaps if i pushed back requiring a re-draft, then they still would have signed-up and the deal could have been locked in … i think you’re right.. lesson learnt .. take it slow and keep them keen!
You should seek legal advice before entering into contracts.
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
i actually have a law degree … it was obviously vague and dodgy, i just didnt want to push away the buyer going back to them with a redraft of the contract.
legal advice prior to entering the contract wasn’t the issue … managing the deal & negotiation with contract redrafts was the concern.
Well thats what you can expect with a vague clause -works in the favour of the purchaser in this case. I think you should let it slide and resell. Next time someone tries a valuation or finance clause try to be very specific – name the bank, time and amount that must be approved and how they are to notify you if it is not approved.
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
i still think we’re in the position of both the vendor and purchaser needing to reach agreement as to whether the valuation is reasonable.
does anyone have any experience with land valuations … what are some rough ball parks? … +/-10% …. +/-20% … -5%/+15%?
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