As interest rates continue to rise on the back of record high property prices in Queensland, many buyers are finding themselves in difficult situations where:
- They now feel they have overpaid for a property (and wish to get out of the contract); or
- they have satisfied ‘finance’, only to discover that the bank will no longer lend the amount they require at settlement.
The failure to terminate a contract (which you did not realise you could terminate), may mean many years being stuck with a bad investment or a property you do not wish to live in.
As to wrongly terminating a Contract, the financial consequences could be dire, and in this respect:
- you may be forced to buy the property, plus be required to pay to the Seller damages, interest and legal costs; or
- you may find that the Seller tries to keep your deposit and also sues you for damages in a falling market where they can only find buyers willing to pay 10% to 30% less than you had agreed to pay. So, for a $1million property, this means you could be looking at damages claims of $100,000 to $300,000 plus the deposit, plus other damages (including double sales commission etc), interest and legal costs.
If you find yourself in any of the above situations, you need to obtain independent legal advice immediately and before prejudicing or waiving any of your rights.
Rose Litigation Lawyers can help you find a solution. Regularly, there are unwitting, even one-word errors, made in the conveyancing process, which if identified can tip the balance of a dispute in your favour. The following is a small selection of examples:
- often parties enter the wrong date as the “Contract Date”, which means most, if not all, of the dates thereafter are incorrect, including the settlement date. As time is of the essence in Queensland (unlike NSW and Victoria), an incorrect date could mean the Seller fails to turn up at settlement, giving you a potential right to immediately terminate the Contract;
- regularly there is loose language used by parties purporting to satisfy building and pest conditions or they enter into side ‘agreements’, such as conditional agreement to complete rectification works. Accordingly, there could be continuing rights to terminate the Contract or a right to terminate because the rectification condition has not been satisfied;
- in the bluster of selling, a real estate agent can mislead a prospective purchaser twas, inducing buyers to enter into the Contract, which may mean the Contract can be rescinded – those misrepresentations are often recorded on websites such as realestate.com.au;
- it is not uncommon for the Seller’s bank not to be ready for settlement on the agreed settlement date under the contract (such as with mortgage discharges) meaning that event could be relied upon to terminate the Contract;
- further, the standard form contract provide various warranties by the Seller, which can give rise to termination rights such as the often forgotten clause 7.4(2) under the REIQ contract which provides:
“… The Seller warrants that, except as disclosed in this contract as the Contract Date and at settlement there are no current or threatened claims, notices or proceedings that may lead to a judgment, order or writ affecting the Property …”
“current” or “threatened” claims or notices is undefined in the Contract, leaving the parties uncertain as to their meaning or effect, which can enable a Buyer to use that uncertainty to their advantage.
As mentioned, that is only a small selection of examples. Rose Litigation lawyers can:
- assist you to identifying any subsisting rights that you may have;
- help you uncover any errors made in the conveyancing process to your benefit; and/or
- work with you to design a plan of action, with a view to bringing the Contract to an end or to give you leverage to negotiate a more favourable outcome.