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Buying a Block with Pre Sales. Help!!

Discussion in 'Development' started by leicachamp, 27th Sep, 2016.

  1. leicachamp

    leicachamp Member

    Joined:
    6th Nov, 2015
    Posts:
    21
    Location:
    Melb
    Here is a scenario i have not come across before.

    I am looking at a block with permits to build 3 townhouses. 2 of the townhouses was sold off the plan back in 2014/2015. The sunset clause ends in March 2017 for both of them. Vendor could not get finance and thus have to sell the block.

    My questions are

    1) As the contract is between the vendor and purchaser and not me(New Owner) am I obligated to take over the contract?

    2) If i am obligated, the sunset clause ends in March 2017. At that time is the contract void?

    My Lawyer is away until next week and this deal will be subject to due diligence for 5 working days.

    Anyone come across something like this before??
     
  2. Simon Moore

    Simon Moore Mortgage Broker - Melbourne Business Member

    Joined:
    4th Mar, 2016
    Posts:
    220
    Location:
    Melbourne
    I'm not sure on the sunset clause, but 3 townhouses can be done under residential finance and there is one bank that has a brilliant servicing calculator.
     
  3. MrFox

    MrFox Well-Known Member

    Joined:
    20th Aug, 2015
    Posts:
    139
    Location:
    Melbourne
    If the units were sold in 2014 and 2015 they would have been sold under value?
     
  4. leicachamp

    leicachamp Member

    Joined:
    6th Nov, 2015
    Posts:
    21
    Location:
    Melb
    Yep thats my point. It would be best if the contracts were void!
     
  5. SK Investments

    SK Investments Well-Known Member

    Joined:
    1st Jul, 2015
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    Location:
    Wherever the wind takes me, currently Brisbane
    Who's to say as the new owner you would proceed with the build? Can you ensure that there is nothing in the contract tying you to the OTP buyers? Wouldn't the vendor have to return their deposits anyway?
     
  6. Tonibell

    Tonibell Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    392
    Location:
    Sydney
    This is a crucial part of the deal - you need to find a new solicitor promptly !

    It will all depend on the contractual clauses in the various contracts and someone else's experience in this area won't necessarily help.

    The sunset clause does sound promising however.