How does a notice to complete work for buyer?

Discussion in 'The Buying & Selling Process' started by Frank Manno, 12th Jul, 2017.

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  1. Frank Manno

    Frank Manno Well-Known Member

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    Settlement for a house I purchased was suppose to be today, but the vendor's bank isn't ready as there is some problem with the vendor's loan that needs to be addressed by them.

    Anyway, I can issue a notice to complete tomorrow giving them 14 days to complete. But what happens after 14 days? Does this mean I can simply and easily get my deposit back and my stamp duty back and go along my merry way and buy something else?

    Or does pulling out of a sale in such an instance need to be litigated?

    Other than a deposit refund are there any penalties that the vendor needs to pay if I do decide to pull out? Or does he simply just put the house back on the market and probably get more for it anyway? (due to Sydney growth, contracts exchanged 2.5 months ago)

    Or what if I don't decide to pull out and issue a notice to complete anyway and they take a whole month to complete? Then what?

    I'm going to spend tonight deciding if I want to get out of this sale and if so I might see what i can do under the circumstances..


    -Frank
     
    Frank Manno, 12th Jul, 2017
    #1
  2. Propertunity

    Propertunity Well-Known Member

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    Getting out of a purchase due to vendor delays is not a simple process. There is no penalty for the vendor in NSW. Contract T&Cs are geared to penalise purchasers only.

    Chances are the vendor will perform shortly and you won't have to think about it. If it drags on you'll need specific legal advice.
     
    Propertunity, 14th Jul, 2017
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  3. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    I would ask your solicitor handling the settlement for advice. A simple written statement by you could be interpreted as rescinding a contract and be harmful. The contract will likely contain clauses you may miss or not appreciate.

    Generally your solicitor would discuss the legal issues with the vendors advisers and sort out a solution using their skills, experience and expertise to protect your interests. That could mean a delay and a compensation amount. Or it may be a brief issue with no need for panic. Settlements get delayed all the time for many reasons.
     
    Paul@PAS, 14th Jul, 2017
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  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Basically this is it. But seek legal advice.
     
    Terry_w, 14th Jul, 2017
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  5. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    Did you incur any costs? If you did then you can seek costs against the vendor. If the costs aren't substantial then not worth litigating for.

    If in QLD then time is of the essence, if they can't settle by 4pm on the day then you can terminate, BUT the standard practice is to issue a Notice to Complete giving them reasonable time to do so (14 days is reasonable). You don't have to, you can terminate straight away but when standing in front of judge discussing costs (legal costs not the actual damages), it never hurts to have acted reasonably during the process.
     
    RPI, 14th Jul, 2017
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  6. DaveM

    DaveM Well-Known Member

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    If its just the vendors bank being not ready I wouldnt sweat it. Serving a NTC is overkill in this instance.
     
    DaveM, 14th Jul, 2017
    #6