Failure to settle

Discussion in 'Legal Issues' started by Chappo, 12th Feb, 2020.

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  1. Chappo

    Chappo New Member

    12th Feb, 2020
    I am new to this forum so please excuse any dumb things I may say.
    The purpose of me joining the forum is to gain advice as to what I do next.

    In August 2018 I entered into a 12 month unconditional contract to sell my commercial property from which I had operated my business for the previous 25 years and then to retire.

    Retirement also included separately selling and relocating the business.
    The purchaser flew from Melbourne on the Monday to view the property, he signed the contract and stated in front of myself,the agent and one of my staff members that he was moving his family from the cold of Victoria to the warm of Queensland and whilst he had a property to sell he did not need to sell it to settle, so there was no subject to sale condition in the contract. (He had paid the deposit on the previous Friday having not viewed the property at that stage).

    Everything was fine and I went about my business for the next 6 months at which time I got the agent to contact the purchaser to make sure all was on track so I could make arrangement to sell the business - all was good.

    In July 2019 (approximately 6 weeks prior to settlement) I did the same thing before entering into a contract to sell the business - all was good.

    I sold the business and the new owner signed a lease on the new premises.
    Then shortly after I received notice from the agent that the purchaser was challenging the validity of the contract as he had wanted a subject to sale clause in it. Lot's of legal backwards and forwards but the outcome was that the purchaser didn't show up for settlement, my solicitor issued a breach notice and I was left with a vacant property to maintain, no income from my business and no income from the sale proceeds!

    The agent is still holding the deposit as his legal advice has been not to release it.

    I feel I am owed the deposit and compensation for loss of income,legal expenses and cost of maintaining the property.

    My solicitor is keen to refer me to litigators, I would prefer not to as from what I am reading it could be expensive and end up nowhere.

    While this is obviously a short version of events I would appreciate any thoughts of where I should go next.
    Last edited by a moderator: 12th Feb, 2020
    JDM likes this.
  2. JDM

    JDM Well-Known Member

    19th Jan, 2016
    If the form of contract was one of the standard REIQ contracts and you were ready, willing and able to settle on the required date, then you have a clear entitlement to the deposit.

    If the agent is worried about releasing the deposit, the agent should follow the procedure in section 26 of the Agents Financial Administration Act 2014 (Qld): AGENTS FINANCIAL ADMINISTRATION ACT 2014 - SECT 26 When amount in dispute may be paid. This will protect the agent from being sued for improperly releasing the deposit.

    If the agent will not comply with the above, then they need the consent of both parties or a Court order to release the disputed deposit.

    You will also likely have a clear right to sue the Buyer for your loss (including additional holding costs etc) based on the information provided and the above comments. It will be a commercial decision whether it is viable for you to pursue the Buyer for this. This is even more relevant if the Buyer was a $2 company with no personal guarantee.

    Unless there is information that has not been provided, this is a pretty simple and clear cut case so your lawyer should be able to advise you accordingly.
    lixas4, d_walsh, Perthguy and 4 others like this.