Advice needed: Vendor delaying settlement

I'm after some advice regarding a flat that purchased via auction a couple of months ago in Sydney.

I won the auction for a very good price, just as the market was starting it's very quick recovery. The vendor was selling to upgrade to a bigger place, and hadn't found anywhere to buy yet. There was a 3 month day settlement, which I was okay with as was in no hurry- I live overseas.

However, they're asking for another 3 week extension with no indication that they've found a place. This might cause an issue with the mortgage arrangements, as I'd have to get an extension from the bank. Or reapply from scratch if this drags on for too long. I could cover the cost of this without a mortgage, but this would involve moving money internationally and I'd prefer to avoid this right now, it just mixes pools of money which I wish to keep separate.

I also have other concerns- looking into it, it appears that a purchaser has little recourse in the event that a vendor delays settlement. There are no special clauses that cover this in my contract, but for NSW it seems like the main thing I can do is... just apply to get my deposit back. Given that I got the place at very good price a couple months back, and the market has since shot up in the area, I'm thinking that the vendor might not be financially motivated to go through with the sale. From the reading I've done, I could go to the courts to enforce settlement, but the information I've found is vague, and going this route sounds expensive.

The property is one that I do really want. I'm based overseas, but plan to move back in the medium term as soon as I get a visa sorted out for my wife. It ticks all the boxes for my family situation, it was a great deal, and a perfect location. Starting the search again from scratch whilst overseas would be a real pain.

Would anyone have advice on how to handle this? I'm trying to check via our solicitor as to whether this extension will seriously see them out of the place and the contact completed, but we're hitting the time of year when solicitors on both sides will be disappearing on holidays so I'm getting a little worried.

Thanks in advance.

 

Dear Jam,
sorry to hear about the delay. I am not a solicitor, but I would certainly suggest you hire one as soon as you can. I think they can issue some notices about time of the essence. ?
This may well sure that you get what you paid for?
Keep at your solicitor! Good luck with your wife's visas well.
I hope this helps.

 

I am not a solicitor either, just a suggestion.

Offer for them to stay living in the house as short-term tenants upon settlement if they dont have another place to go to. Get your solicitor to draw up the tenancy agreement as per NSW tenancy laws and rta.

I can confirm that it is almost impossible to get bank loans finalised atm. I'm in the process of waiting indefinitely for a tiny personal loan while the bank's lending department is flooded with work.

 

Get your solicitor to send a letter to the vendors solicitor. It is called a notice to complete. This will take two weeks past settlement. Make sure you get them to send that asap because the 2 weeks starts from when the letter was sent.

 

Yeah this... get it done before Xmas

 

You can apply to the supreme Court to get an order to settle, order for specific performance. Will be costly though.

I wouldn't send a notice to complete as this might give them an out.

Get legal advice from a property lawyer.

 

Sorry to derail for a sec OP, but this is worrying me! I have a property due to settle mid Jan, could this be an issue? Have been told by the broker and solicitor everything is ready to settle (we had a three month settlement so plenty of time to get things into place).

 

Why would you think it would be an issue?

 

Probably be ok for you, I imagine. It is the "Settle before Christmas" rush as most businesses will be on hold until 6 January.

 

Thanks everyone.

My solicitor has already mentioned a notice to complete as an option, but my (limited) understanding of this is that it does give the vendor an out- if they don't complete in 14 days then the vendor can simply refund my deposit and back out. I don't want to let them back out, I want them to settle.

@Angel , the possibility of renting the place back to the vendor was raised back when the contract was signed, but they'd asked for a below market rate. When I counter offered with market rate rental (as determined by their own agent) + a commercial rental contract, they decided not to take this as an option, which I found a bit odd at the time but it was their choice.

It's a court order to settle that I suspect might be the way to go, if they do intend to drag this out, but everything I've read on this forum so far seems to say "avoid courts unless you can afford lots of time and money".

I'll be talking to the solicitor on Monday. So far it's all been email and this issue has only just come up before the weekend.

 

Perhaps offer them a lease at a lower rate of rent. This will be cheaper than a court order and once title has transferred and the term of the lease is up you can expell them or up the rent.

 

absolutely this - it still allows you to get the house settled, and the differential in costs of rent is far less than lawyers cost.

given the option to rent back was raised at the time you signed contracts, you shouldn’t be surprised that they are needing an extension of time.

 

I can't say I'm totally surprised by this, but delaying contacting me about it up to the very last minute - literally the last day before solicitors start disappearing on holidays and settlement is literally the first working day the solicitors are back - seems almost like a calculated dick move on their part, so I'm fairly ****** off about how this is going.

 

What date is settlement supposed to be?

 

Agree it must be very frustrating - try get them to rent back at market rate again. They may be more accommodating now.

If not, a negotiated lower rental amount for an short period - eg. a month or two - isn’t too bad an outcome if you think overall your still getting a great deal on purchase price.

 

Closing this one out (hopefully not prematurely as settlement is in a couple days).

Finally got some sort of response from the vendor, looks like the message of "you've had an extended settlement period already, if you want you can rent the place back, otherwise we issue a notice of completion" worked. Somehow they can magically move out on time.

From seeing emails between solicitors, I get the feeling that the counterparty solicitor might have been a sticking point- her communications have been incredibly perfunctory and she doesn't bother beyond the bare minimum of detail. I've met the vendors in person after the sale and they seemed completely decent people but I've not contacted them direct as I'm overseas.

Thanks for the advice, everyone.