Selling to a developer… the start of a complicated sales

Discussion in 'The Buying & Selling Process' started by celmwu, 22nd Jun, 2021.

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  1. celmwu

    celmwu Member

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    Background
    • 2016- I had entered into a contract of sale with party B for the sale of my unit, settlement due in 2018
    • 2018-2020, Party B requests extension of settlement one year at a time, the latest deed of variation extends settlement date to June 2021
    • Early 2021 - Party B ‘on sold’ my unit to party C, a developer, even though party B had no rights to do so. Subsequently, Party C lodged a caveat against my unit
    • April 2021- party C sent a letter to all owners requesting extension of settlement date to 30 Nov 2021, emphasising there will be no further extension.
    • June 2021 - party B indicated they are not ready to settle but did not provide any paperwork
    Current situation
    • Party B has 75% ownership of the block (there are contract of sales entered into with party B for the other two units (including mine), but not settled)
    • Party C seems to be providing the funds to Party B for settlement. I suspect if Party C is not ready then Party B will not be ready
    • 2 days has passed after the settlement date
    I would appreciate some advice from the forum on these questions:
    • What are my options given Party B can not settled? If I serve them a notice to complete and then terminate the contract, could I be force to sell my property to them again given they have 75% ownership
    • Could I be force to sell at a price lower than the original contract price? Is the property value calculated as a proportion of the collective value of the block? Or is it market value based on current market condition
    • I have been warned by my solicitor not to involve party C as they haven’t been following correct legal procedures to date and likely to create further issues, or pull some dirty tricks. what could be some tricks or traps that Party C could play in the near future..
    thanks everyone
     
  2. Scott No Mates

    Scott No Mates Well-Known Member

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    Why not? They shorted/flipped your property. They can't settle with C until they have settled with you.

    You can't serve NTC until 14 days after the contract date. Could you be forced to sell? Yes, at the current price not the price set 5 years ago - new valuation on the same basis should be produced.

    You have no relationship with party C.
     
  3. Terry_w

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

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    What right does Party C have to ask you to extend settlement? they prob haven't even got a right to lodge a caveat.
    Have you sought legal advice at all?
     
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  4. thatbum

    thatbum Well-Known Member

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    Surely the only advice from here is to listen to your solicitor who is the only one appropriately qualified and with the full set of information in front of them?
     
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  5. Piston_Broke

    Piston_Broke Well-Known Member

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  6. Stoffo

    Stoffo Well-Known Member

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    That's a good question, how much more is your unit worth if you were to sell today ?

    If you were to buy an OTP unit today there will likely be a clause stating you can't on sell.

    The 75% of owners choosing to sell should be banding together and obtaining legal advice !
     
  7. wylie

    wylie Moderator Staff Member

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    I would be looking for a lawyer who has more expertise in this. Your lawyer sounds perhaps like he/she doesn't know the law in regards to this sort of complicated situation.
     
  8. celmwu

    celmwu Member

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    The original contract date was dated 2016. My understanding is that I can serve a NTC after the scheduled settlement date if the other party could not settle. As the contract price was at a premium price, my concern is if the current contract gets terminated, new valuation/ current market price will not be in my favour…
     
  9. celmwu

    celmwu Member

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    Advice from my lawyer is to issue NTC and terminate the contract with Party B, then consider Initiating court proceedings to sue for shortfalls if new contract price was lower than current contract, or seek specific performance order forcing Party B to complete settlement. However, Whilst Party B has 75% ownership of the block, it is a shell company..

    I do not wish to take this matter to court and hoping to know if there are other strategies. If a new contract has to be negotiated, how is the price to be determine? My lawyer is unable to provide any advice on this
     
  10. Terry_w

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

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    did you take a personal guarantee?
     
  11. Scott No Mates

    Scott No Mates Well-Known Member

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    You can't issue NTC until the 14 days past the amended extension date has lapsed.

    Has it settled on that 75% or is it in abeyance like your unit?

    Could be time to get a real lawyer. :rolleyes:
     
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  12. celmwu

    celmwu Member

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    unfortunately no..
     
  13. celmwu

    celmwu Member

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    yes, Party B has settled on the 75% ownership
     
  14. Kevbo

    Kevbo Well-Known Member

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    You will need a litigator, not your usual conveyancing solicitors. Strategically, I would look for options to make the buyer pay market value.
     
  15. MTR

    MTR Material Girl

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    I think the market price is less today. I assume its an apartment where there is oversupply in all capital cities
     
  16. Chabs

    Chabs Well-Known Member

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    Have been in a similar situation. This is not legal advice, IANAL, this is based on my previous experience.

    usually when your home is locked in under a call option you get paid a consideration that the purchaser forfeits all claims to. This constitutes part of the deposit and is deducted from the total at the time of settlement.

    then, when the call option is formally exercised you enter into a contract of sale. This contract of sale has an agreed settlement date.

    It’s important that you distinguish between the two, as if you’re currently in the settlement phase, then you should have received the full 5% / 10% deposit.

    As it’s usually unconditional, you have nothing to lose at this point if they don’t settle, and you keep the deposit, so don’t be scared!

    you have to play aggressive and try and force their hand, serve notice to complete when you have the chance (if you are in the settlement phase) and then if it expires... then you can eventually remove caveats and the property is once again yours and unrestricted.

    Yes when they buy it , whoever buys it, you have to get 100% of the money that is owed as according to the contract of sale, or it can’t be bought.. so don’t be scared. If the contract expires and they don’t complete from their end within the time frame, you can start negotiations from 0. If you restart negotiations, I recommend selling at the current market price, cash only offer with 42 day settlement, not the 2016 price.
     
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