Submitted to 'Real Estate' page but also a 'Legal' question:
6 months ago I purchased a house off the plan. I negotiated a 5% deposit but will have to pay the remainder next month.
I recently enquired in the same development for a relative and realised that they are now selling the same property as mine for a significantly lower price, a large financial rebate, many added features thrown in for free and even a $12k gift card. Whilst it is not ideal, I'm considering the opportunity this may present. My question is - what are my legal rights in terms of selling before settlement or forfeiting the contract and then repurchasing in the same development with the new terms? If it is simply a matter of forfeiting my deposit, then I would still be significantly better off. Are there other ramifications which would stop people doing this? I take it they won't simply amend my contract.
Any advice would be much appreciated!
Im no legal or property expert, so it will be good to hear from someone who knows exactly what the legal ramifications are for you.....
I would imagine that the developers are well and truly all over this. It sounds too good to be true that you can walk away from your obligation to purchase the property at a price you previously agreed on.
My thinking is that you have made an agreement to pay $XXX on completion of construction of he unit/house. I think that you are under a legal obligation to pay the balance of the funds and just because someone negotiated a sweeter deal (due to the market deteriorating) doesn't provide you the ability to walk away from the contract........but maybe I am over-simplifying things????
How do you reckon you would feel if you had paid your deposit, and the market had improved, so the developer found someone willing to pay a higher price 6 months later, so they send you a cheque for your deposit and say "its been fun, but we got a better offer"
I reckon you would lawyer up and get your property back.
So this is why my gut feeling is that you are stuck with the deal you signed up to.
A Im not a lawyer...and
B the terms of the contract will explain what you can and cannot do.
Thanks so much for the response Brendan! I agree with all that you've said. I'm certain I'm neither the first nor last to go through this, so yes - the developers will be all over it indeed.
I guess my question is what am I liable for? Obviously there are scenarios where people don't make settlement for one reason or another so what are they forced to pay? Do they simply lose their deposit or can they then be sued or pay fines as well? If it's a matter of "tough luck, as per the contract we then get to keep your deposit", I'd actually be better off sucking it up and going down that path. Or I sell the property before settlement but I'd be surprised if this works out to be an option.
But like you say, I need to decipher this enormous contract or get someone who can.
I would be consulting a lawyer regardless because I think you may have a problem when it comes to settlement. A Valuer nominated by your Lender will be aware of these incentives and will most likely value your property similar to the others in the development, ie at much lower than your original contract price. So I would be looking to re-negotiate your Contract of Sale with the developer of you will have to come up with more funds in order to settle the deal. Good luck!
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