Hey All, So I just had dinner with some friends who have told me the most insane of stories/nightmares they are going through! Basically they were wanting to build a house at the rear of their PPOR and later subdivide. They found a great builder and signed a 14days subject to finance clause and at that time paid a 5% deposit (mistake 1). The builder conveniently had a broker they could use and so they went through them and got a Val done (mistake 2).The Val came in shockingly short (they believe an end value of 1.1) and this value came in at 540k. As finance was going to fail the broker said he would request an extension with the builder...They also called and wrote to the builder who never responded. In the meantime the builder had reccommended them a building surveyor (mistake 3) who went and got a building permit!!!! All this with a contract still subject to finance. The builder eventually responded and said no worries you have until Feb. They then went and got 2 more valuations, 680 and then 800. They needed 840 to avoid LMI and didn't want to pay it so they decided to pull the pin. It is worth noting they never applied for finance so were never denied as such, the Val's just came in short. In the interim the builder decided to drop off some machinery at the house....umm wtf?? So anyway! The builder has now said they are still bound by the contract and they went unconditional as soon as the deposit was paid. He said he will not refund then deposit and that they can take him to VCAT. In an email he said the following; 1 - The text they sent about an extension (even after they called him several times) is not valid because he was sick in bed and not in the office so it doesn't count!!! Haha 2 - If finance is unsuccessful the banks should have provided an unsuccessful letter. They have spoken to two seperate lawyers who think he is nuts but both agree it may not be worth pursuing because he could potentially counter for more than the 17k deposit. They said they have all the evidence in paper but said he might have something against them which made it somewhat risky although they do believe they had a good chance. It is worth noting that for the 17k deposit they got a soil test, building insurance and a building permit. Probably about what 5k's worth? Now here is the best part! They contacted the building surveyor and said they wanted to cancel the contract and permit and he said NO! He said as far as he is concerned it was a dispute and needed to be sorted before they could cancel and as it stood they were still under contract. He then said when the building permit expires in November they would need to get a new one at their own cost!! Whoa!! I was stunned. Can anyone with any clue give any possible reason on earth that this builder has a case? Or should they be going straight to VCAT??