Off the plan dilema

The administrators sent through a letter , they are looking at options and one of them is to proceed with the build

My solicitor is looking at my contract , I just want out. Agent said he’s never had to do this before , and also mentioned they were never paid for selling it. He’s assured me the money is in their trust account but doesn’t know what happens from here

Horrible process and I have no idea how safe my money is

 

I'd take the whole "he's never had to do this before" with a massive grain of salt sounds like an attempt to delay. It may well be best to go ahead with the build.

Get advice from your solicitor and then if they say you can, I would gently apply pressure to get your hands on the money. Consider getting a debt collection agency involved if the solicitor says you can do so legally.

 

Trust account money safety will depend on what the contract says.

 

I work with someone and it took 2 years to resolve. The deposit(s) were not in a trust account by that time either. Liquidator progressed land dev to completion and paid council fees and land tax arrears and so much more so that the lender allowed release of land. Those who bailed got nothing, not even deposits and were not even listed as unsecured creditors. Those who sued still wait and may get their land (may have to pay more) but have paid a bit in legals along the path and those who waited got their land for the contracted price.

Solicitors advice will be important as they may be able to present argument and evidence to show that the deposit was meant to be repaid from trust prior to their appointment. However you dont want to be a unsecured creditor either.

 

You will either get your money back if the contract can be validly terminated or your will have to proceed with purchase when done. The recent changes to the law around ipso facto clauses make it harder to terminate a contract if the other party is in insolvency as it provides some safe harbour. Unlikely that your contract would have these clauses in anyway but if it does, don't hang your hat on it as a right.

 

Just got an update, more if anyone else find themselves in this situation

Deposit is safe in trust account . Creditors are meeting and deciding if they will go ahead with the build within the next month. Either I get the house (within sunset) or I get my deposit back

Very relieved , but not sure if I’d ever go otp again ! Thanks for all the responses

 

are you able to terminate?

 

Totally feel for the OP. An abject lesson (amongst others) on NEVER to buy OTP.

 

Not at the moment , no termination clause on insolvency . Main concern for now was my deposit

 

Interesting there’s no event of default clause covering external administration, winding up etc. Double check.

In the meantime, you or your lawyer put to the agent - in writing - that they are not to release your deposit to anyone without your prior written approval & if they do you reserve your rights, including pursing the agent. Make them accountable.

Also get written confirmation from the agent direct that your deposit is sitting in their trust account.

 

These are the changes under the safe harbour provisions, the ipso facto clauses giving rights to termination are stayed under the reforms to the corps act, but doesn't apply to contracts entered into per 1 July 2018.

 

Ipso Facto prevents termination simply because of insolvency. If the builder cannot or won’t finish the build, it’s a breach of contract and you can terminate under other clauses.

But yes, only post 1 July 18 contracts so doesnt apply here as contract was entered into 16 months ago so can use insolvency provision to terminate if there is one.

 

Hi All

Thanks for all the input so far. It's still ongoing, was hoping someone could explain the process better. Still waiting to get info back from administrators and solicitor

This was the ASIC update as of yesterday:
Status: Administrators Appointed
Secondary Status: Receiver & Manager Appointed

I emailed the administrators, they put me in contact with the receivers. The receivers are managing the land on behalf of the bank and told me they were trying to sell the block to continue the build

ASIC site today now shows:
Status: In Liquidation

So my question is, if my contract was to a company that is now in liquidation, does that mean I can get out? Or can I somehow get passed onto the receiver and its up to them to build or call it quits?

I've gone through the contract, nothing special about termination just the default clause (I can only terminate if I'm bankrupt or lose my mind), theres nothing about the other side of it

Thanks

 

Not unless the contract has other clauses about insolvency.

 

No good news. Receivers are reviewing contracts to make sure there are no insolvency clauses (they dont think there are). If not, they will sell the land with the DA and contracts in place to get the most money for the bank

Im now stuck waiting again receivers said at best the land will be sold in December. Then I have to wait to see what happens and what the new buyers want to do. Sunset isn't until Feb 2020

Any advice or options from here?

 

It doesn't really matter what the other side is doing. Have you reviewed the contracts to see if you have a way out?

 

There’s no insolvency clause that I can see

 

Insolvency clause aside, are there any other obligations on the other party that they have not complied with? Anything from reporting, to build start date, maintenance of DA (i.e. has it lapsed) etc.

 

can your lawyer see any?