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OTP apt - no sale within ten years condition

Discussion in 'The Buying & Selling Process' started by Joynz, 29th Apr, 2016.

  1. Joynz

    Joynz Well-Known Member

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    A friend bought an off the plan apartment in Melbourne, for his SMSF. It is currently under construction.

    I was surprised to hear that the contract has a clause saying that he can't sell within ten years of purchase.

    Is this common?
     
  2. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    Maybe they figured that's bout how long buyers will need to wait until it's worth what they paid? ;)

    That's a horrible clause to have agreed to.
     
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  3. TFBoy

    TFBoy Well-Known Member

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    Maybe a buy with delayed settlement..of 10 years.
     
  4. CosmicTrevor

    CosmicTrevor Well-Known Member

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    Not something I've seen before, possibly designed to ensure a better balance of OO to investors?
     
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  5. Joynz

    Joynz Well-Known Member

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    I wondered what would happen in case of losing a job or some other issue. Also, an inner city apartment might be harder to sell in ten years, with densification.
     
  6. emza

    emza Well-Known Member

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    How would they even enforce that?

    Sounds like whoever wrote the contract is trying it on.
     
  7. tobe

    tobe Well-Known Member

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    I heard about an apartment in Brunswick with conditions you couldn't sell for more than the original sale price for ten years to discourage investors. Also didn't have any car parks, shared laundry bike spaces etc.
     
  8. Blacky

    Blacky Well-Known Member

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    I cant imagine that such a restriction would ever be legally binding.
     
  9. Joynz

    Joynz Well-Known Member

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    If it was part of a contract signed by the buyer then it might be binding. My friend wasn't at all worried and possibly hadn't read the legals, but I would have expected some sort of 'extraordinary circumstances' clause.

    In Brunswick, I can imagine a building might not have car parking. But I don't believe the developer would get away without bike racks.
     
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  10. USC

    USC Active Member

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    THE NIGHTINGALE MODEL

    The Brunswick one has been approved by council after adding 3 parking spaces. There's a proposal for the next one to be in Fairfield. Based on the ppl I speak to, there has been a lot of interest.
     
  11. teetotal

    teetotal Well-Known Member

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    More like a hipster culture :rolleyes:
     
  12. sanj

    sanj Well-Known Member

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    I think it's a good idea for the residents and community and worth exploring

    as for your friend, ill do my best to say this politely - he's an idiot for investing his super money without even reading the bloody contract. what the hell is wrong with people??
     
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  13. sanj

    sanj Well-Known Member

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    I think this one might be, it's been part of the proposal for the building by the developers from the start as they're trying to be more attractive to OOs and create a bit of a community there. probably are some conditions on the title
     
  14. bob shovel

    bob shovel Well-Known Member

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    Bahaha as delicate as a sledgehammer!

    The beauty of contracts is that you can include what ever you want*... who signs them is another thing!

    It could be targeting ppor buyers perhaps and/or screw you over otp style
     
  15. Joynz

    Joynz Well-Known Member

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    I believe their Commons project was very popular.
     
  16. sanj

    sanj Well-Known Member

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    I swear some people spend more time researching holiday destinations or what phone to by next than they do something worth hundreds of thousands of dollars.

    I.JUST.DON'T.GET.IT.
     
  17. Scott No Mates

    Scott No Mates Well-Known Member

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    @Paul@PFI - what would be your cost base?
     
  18. SmashedEconomy

    SmashedEconomy Active Member

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    I agree.

    And as I ask here so often, who would be so retarded to sign something like that?
     
  19. tobe

    tobe Well-Known Member

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    Owner occupiers who aren't planning to sell for at least 10 years, want a bike space, and don't want to share their laundry and other communal living spaces with short term tenants who may not care about the place as much as they do.
     
  20. See Change

    See Change Timing Lord Premium Member

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    I heard about the Brunswick project and for what it's aimed at , I could see the logic behind it but 10 years and cant sell ....

    Wouldn't buy an investment there though . It was an OO thing .

    Cliff