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Early possession prior to Settlement

Discussion in 'The Buying & Selling Process' started by sanpan, 16th Jun, 2016.

  1. sanpan

    sanpan Member

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    The buyer of our property requested early possession prior to Settlement which he requested to be 10 months down the track. He agreed to pay all rates, water, gas, strata fees, power plus rent to enable us to cover a loan we had to get in order to secure the property we wanted. That is all well and good but now he wants an extension to enable him to sell his other newly built property. He is asking for a 4 month extension which we are rather nervous about for fear he then requests a further extension.
    What are the danger points the seller should be aware of when giving early possession prior to Settlement, and how many extensions is too many? My wife is not concerned but i am.
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    It is not in your best interest to grant an extension - too much risk
     
  3. sanpan

    sanpan Member

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    Hi Terry, thanks for your response, if you have a moment could you tell me what the risks are, all i know is i feel very uneasy about this situation, scared to death if the truth be known!
     
  4. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    What if he doesn't settle?
     
  5. sanpan

    sanpan Member

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    i don't know what will happen, doesn't he have to abide by the contract?
     
  6. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Yes - but courts exist because people don't!
     
  7. sanpan

    sanpan Member

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    oh dear, this doesn't sound good ! if he hasn't got the money he hasn't got there money, well he will lose his $50,000 deposit hope!
     
  8. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    The first thing to consider is - how do you get him out? Is there a lease or a licence for him to be in the premises?

    Damage is also a worry. What if he damages things, intentionally or not. WIll your insurance cover you - many won't if no lease.

    I seen a dispute where a relative damaged property owned by his brother because he was forced out at a sale.
     
  9. Angel

    Angel Well-Known Member

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    When are you going to get paid? What is in it for you to be granting such a long settlement in the first place?
    Now you are considering allowing him to move in. What does YOUR solicitor say?
    The guy moves in, eventually realises he cant pay and wants out of the sale. But hey, he is in your house. Maybe he likes it so much that he wont move out. Meanwhile you could have sold it to someone else who doesn't cause you any grief.
     
    Joynz likes this.
  10. sanpan

    sanpan Member

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    There is nothing in it for us in granting such along settlement...we agreed to it so long as he paid all the bills. i did not say that now i am considering allowing him to move in, he has been in for months, and all was going well until he asked for the extension to the long settlement. Maybe he does like it, but we have since discovered he has a reputation about town for ripping people off, so we are now aware what he is like. Maybe we could have sold it to someone else, but this guy was first in the queue, and how were we to know he would do this sort of thing......do you honestly think that we would have accepted his offer if we knew what he was going to do?? Do you think we would have taken him on if we knew he was without the funds to purchase this property? i think the agent was incorrect to advise us that it will be fine to allow a long settlement. It is ok for him, he thinks he will still get his commission, but we have news for him, if the deal is off so is his commission for which he has done zero work. We are currently seeking legal advice for quite a few aspects in this saga. We know, no matter what, we will not lose my property, the laws are there to protect people like us, that is what is good about Australia.
    '
     
  11. Bayview

    Bayview Well-Known Member

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    It is one of the strategies mentioned by Spruikers at their "seminars"..get early access, do a reno, sell before settlement and make free money.

    There's your answer...no extension.