Problems with house sale

Discussion in 'Legal Issues' started by geoffw, 18th Jan, 2022.

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  1. Paul@PAS

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

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    A contract for sale with an existing lease should be specifically drafted and a copy of the existing lease should have been attached to the contract .

    The solicitors may have a argueable defence if your instructiosn werent direct and clear and in the end you signed the contract knowing it to be incorrect or assuming it was all correct. Contract law doesnt consider such assumptions. There is aimplied view that all parties who sign contracts are all knowing. Unless they sat before you when you did sign and gave advice on that its hard to see how its not contributory negligence on your part. If such a issue was so important to the contract why was it missed ? By you. Fighting that will take time and big $$$. And a law firm doesnt have a high cost to defend itself. They can wait you out on cost.

    The other option is to negotiate with the tenant for them to depart and you compensate them allowing vacant posession to occur. Make it sound like a solicitors **** up that needs a solution and in turn they can benefit. They may accept $10K cash as a inducement to move. That may also even be deductible as a cost incurred to break the income producing lease.
     
    Last edited: 19th Jan, 2022
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  2. Marg4000

    Marg4000 Well-Known Member

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    Can you delay settlement for a week and pay the tenant to leave?
    Anything less than the $30K price reduction is a win for you.
     
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  3. geoffw

    geoffw Moderator Staff Member

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    The purchaser has agreed to a drop of penalty to $20k (from $30k). This is after initially refusing any drop. We provided support that even that amount, when the additional rent from the GF is included, they would be receiving double what it would cost them to rent another comparable property until this tenant finishes their lease.

    I've confirmed with our solicitor that, not only did the agent tick the wrong box, but also did not provide lease documents (thanks @MTR ). Double Fault.

    So settlement will go ahead tomorrow.

    The next step will be negotiation with the REA.
     
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  4. willair

    willair Well-Known Member Premium Member

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    Maybe the best way to go,as now it's finished and you both can move forward..
    With all the kicks in the ball's you had lately I hope this is the end..
     
  5. Shazz@

    Shazz@ Well-Known Member

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    As Scott has stated, make sure your solicitor doesn’t release the commission to the agent.
    All the best Geoff. $20k is better than the original $50k. Hopefully the REA reimburses you the $20k.
     
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  6. inertia

    inertia Well-Known Member

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    Aside: Welcome to Newcastle :) Hope you are settling in ok.

    Cheers,
    inertia.
     
  7. geoffw

    geoffw Moderator Staff Member

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    Yes, thanks. I've raised this with my solicitor. All good.

    Thank you!

    When things are Covid free, I'll look forward to a Meetup.
     
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  8. Travelbug

    Travelbug Well-Known Member

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    I would offer the tenant $5k to move out. Even if you have to go to $10k, you are still ahead.
    Just saw it's happening tomorrow. Delay settlement (as long as you aren't in Qld). You get 2 weeks.
    Hate to say it. But at the end of the day you signed the docs with vacant possession on it.
    Good luck
     
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  9. geoffw

    geoffw Moderator Staff Member

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    The plot thickens.

    The agent has forwarded the solicitor an email confirming that, despite marking vacant possession, mention was made (in October) that there was a lease in place for the granny flat.

    We will have to see what happens now.
     
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  10. Shazz@

    Shazz@ Well-Known Member

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    Time to get some independent legal advice. Both are at fault… but I’m worried you’ll be the scapegoat as you signed the contract.
     
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  11. wylie

    wylie Moderator Staff Member

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    Does that mean the agent realises he/she is somehow responsible. I would have thought that email might have somehow gone astray because it strengthens your position, and weakens the agent's position, doesn't it?

    I'd definitely have your solicitor not release the funds held in the trust account if at all possible and push hard to have the agent make good.
     
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  12. Noobieboy

    Noobieboy Well-Known Member

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    This is like a good Mexican soap opera. Pretty exciting to watch. As long as it doesn’t get to you and doesn’t stress you out.
     
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  13. geoffw

    geoffw Moderator Staff Member

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    I think it means that the solicitor has mentioned to the agent that they stuffed up, and the agent is backing up their own position, providing two emails showing that they informed the solicitor that while the main house was vacant possession, the second house had a lease in place.

    I may have to get another opinion tomorrow.
     
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  14. Scott No Mates

    Scott No Mates Well-Known Member

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    Sounds to me like both are in for a rough ride (though it will cost you to get there) - both the solicitor and the agent have professional indemnity insurance so it won't be coming out of their pockets unless you negotiate a settlement with both parties.

    Agent should have advised it was a G/F and was leased. Solicitor should have checked the documentation included the lease for the GF.
     
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  15. Piston_Broke

    Piston_Broke Well-Known Member

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    I like this too.
    Just tell them the situation, they gonna get kicked out either way....and they could probly claim for extra time.
     
  16. MTR

    MTR Well-Known Member

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    I do too but perhaps it maybe a tad late for this?
     
  17. Astute Investor

    Astute Investor Well-Known Member

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    Did you read the contract before it was signed by the buyer? Or did the solicitor send it off before you got a chance to read it? I always double check everything coming from a solicitor or accountant because they are normally prepared by a junior with the actual solicitor doing a skim read.
     
  18. geoffw

    geoffw Moderator Staff Member

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    I read the contract. And I guess ultimately the responsibility is mine. But I wasn't on the lookout for an omission of an occupancy clause, so I didn't notice its absence.
     
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  19. Astute Investor

    Astute Investor Well-Known Member

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    Yeah it's tough - you always miss something. Nothing is 100% perfect, you always re read something after it is done and see some kind of error. Just need to hope it isnt something significant.
     
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  20. geoffw

    geoffw Moderator Staff Member

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    The solicitor has admitted that the mistake occurred in their office, and will compensate in full.
     
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