Hi property gurus, I need some help here please. I'm doing JV project with my cash put into the deal as a money partner, and now we are stuck in very bad situation. We purchased 3 bed house in VIC in Jun last year, and got full permit for townhouses. However bank didn't let us knock down house and proceed with building, so vacant/broken-down house is sitting there for last 10 months with no progress, costing monthly interest, land tax, council rate (holding costs) Building cost climbing up and retail market declined, we get to the point where we are unable to build because it is not feasible any longer Even worse, existing house is now valued at lower/similar price that we purchased at last year. Sales price wouldn’t cover current debts - bank loan, private loan from me. How do I make sure that I can get my money back?? Below is snip of Loan agreement
Yes, it will cover bank loan, and other private loan other than from myself. Project has two private loans - from me and from other money partner
I recently came across a number of clients who entered a JV. They were issued shares etc. However the final wash up was the venture failed with massive losses. Many lenders were SMSFs too. Yet the shares were worthless and in the end they all lent unsecured to the individual so the relevance of shares seemed misleading at best. None sought legal advice as recommended in the rush for urgency. Legal advice would have noted the arrangement was a loan that was made to look like equity in a valueless entity. Its in liquidation with net assets of $0 but the bankrupt individual is hopelessly broke
Withouth knowing details I'd look at working with the other money partner to terminate the JV, demand repayment and take over the project. If that seems tedious and others not agreeing, demanding repayment terminating JV and get out of it asap by sale or wateva means. I know someone that spent years trying to fix and minimize losses in a similar situation. And of course i'd need a lawyer.
Sounds like after the banks gets their share you face a loss. One that is unsecured ? I would be engaging with your solicitor. You want to maximise recovery of what you sunk in and determine who bears the losses. Not you ? Note quite sure how the PPSR relates to real property. How can security be registered ? Its not "personal property ". That agreement looks like it was drafted by someone our to scam and throw one past you. Agreement may have as much security as a beer coaster. A solicitor may now recommend a caveat ? What is ‘personal property’? Personal property is a legal term that means any property that is not land, buildings or fixtures. Personal property covers a lot – some common examples include: Cars and utes Trucks, tractors and trailers Machinery Tools Scaffolding and temporary fencing Building materials (before they’re actually fixed to the build) Your ‘stock’ if you’re a manufacturer, for example clothing, wine and furniture Jewellery and artworks
1. Determine if you are liable for any further losses 2. No other personal security given by borrower or related entities? 3. Get good property lawyer and form initial view on likelihood of success in recovering your funds and how 4. Your first loss is your best loss
