How to rescind contract and minimize litigation cost

Hi all,

I have got a situation of which I would like to seek your thoughts :

Situation :
- purchase 1 bedroom 1 bath 1 carpark unit in 29 Station St Nundah for 376,000 on Jan 2016
- deposit paid by Deposit Bond - 10% of purchase price - expire on July 2018 - approx costing 6000 dollars
- sunset date : 2.5 years from contract date : July 2018
- contract stipulates that vendor can extend the sunset date
- vendor requested extension of sunset date and offering to cover the deposit bond if we agreed the sunset date to be extended until April 2020
- vendor reason for extension request :
A. " delays pertaining to approval pertains to receipt of satisfaction of a development approval condition (external details) from council (generally in accordance) running from the date of the first contract for a proposed lot in the development on 21 Dec 2015 [in light of financial viability requirements for the development] up to and including when received from Council on 01 Aug 2016 , being 225 days
B. delays pertaining to contractors being from when our clients was advised on site that the previous selected contractor had ended their partnership on 13 Oct 2017.
Up to and including when our client received the tender from the new contractor being 64 days. The total being 289 days (225 + 64)


Position :
- I would no longer wish to purchase the property because I think that property is now overpriced

Questions :

1. What are the risk to me in this case if I rescind the contract ?

2. Vendor's reason point A seems to be a delay of getting approval from council due to not enough financing,
Am I interpreting the reason correctly ? Also is that a legally defensible cause for requesting an extension to sunset date ?

3. What would you do if you NO longer wish to purchase the property however you would like to minimize any potential risk of litigation ?

Thanking your thoughts in advance

 

Go see an experienced lawyer and get specific advice for my situation.

I have to say though, you seem to think that the vendor can unilaterally extend the sunset clause without your permission. You might want to have a closer look at that clause, because that seems unusual. You might be entitled to say "no thanks" as your get out of jail free card.

 

Has this thing actually started construction yet, 4 years later?

 

There is a chance that the sunset date can be extended where specific reasons are met under the contract, but these can't be extended beyond the statutory limit. What does your lawyer say?

 

I am always surprised by posts that ask for legal advice. And the reply posts say....get advice.

 

yes, it just started about 1 month ago

 

what i mean is that the unit that I purchase has gone backwards in the value at this moment

 

true to that

 

btw, when the vendor mentioned :
" delays pertaining to approval pertains to receipt of satisfaction of a development approval condition (external details) from council (generally in accordance) running from the date of the first contract for a proposed lot in the development on 21 Dec 2015 [in light of financial viability requirements for the development] up to and including when received from Council on 01 Aug 2016 , being 225 days

Would that mean that the vendor is delaying because there's an issue with their financing ?

 

If you are not using a solicitor to do the conveyancing then:

1. post the clause in the contract here relating to "Sunset Date"
2. I can read the clause and give some thoughts.

 

Thank you for helping out, I appreciate it.

I did use solicitor however they seems to be just passing on message from vendor rather than being able to give me an advice / options

 

Did you get any notices under 7.3?

 

yes, i did get notices as per below :

- vendor reason for extension request :
A. " delays pertaining to approval pertains to receipt of satisfaction of a development approval condition (external details) from council (generally in accordance) running from the date of the first contract for a proposed lot in the development on 21 Dec 2015 [in light of financial viability requirements for the development] up to and including when received from Council on 01 Aug 2016 , being 225 days

B. delays pertaining to contractors being from when our clients was advised on site that the previous selected contractor had ended their partnership on 13 Oct 2017.
Up to and including when our client received the tender from the new contractor being 64 days. The total being 289 days (225 + 64)

 

isnt that the standard lawyers reply?

 

There is an argument that a statutory sunset date cannot be extended as of right under the contract and I recently presented a Legalwise seminar to lawyers on this exact topic.

Feel free to email me through the contract and correspondence regarding the extension and I would be happy to have a quick look without charge.

 

That's exactly one of the ways a sunset date can be used. Nothing wrong with that. The developer should deliver the project within the contractual period.