Vender of deal in trouble

Yea

 

Its scenarios like this which make me always recommend against trying to get early access to renovate during settlement

Sales contracts are heavily weighted in favour of vendors. You spend $50k on a reno during settlement, vendor then says nah not settling anymore as they have a nice renovated house they can get more money for, or they die, or relationship breakdown etc.

Your remedy as purchaser is limited - walk away and get your deposit back, or spend a tonne of money to sue for specific performance, which will cost more than your renovations.

1-2 months mortgage payment is far more palatable while you renovate post settlement.

 

two settlements on one day!!

Wow you got a big set of kahunas,
no offence I dont know if thats just ballsy or crazy

ive done that many times before, 30-45 day settlement, started renovating two weeks before settlement,
I guess its a risk but at the time I didnt think it was a huge risk

 

Sooo many alarm bells here - and more as we hear more about it. @the world is your oyster I hope you have a good lawyer advising you here.

Even the lawyers on here are only giving general suggestions because we don't know the full story - you need specific advice.

 

It seems likely the bank will sell the property as you are not in a position to buy at the moment anyway by the sound of things (needing to sell your PPOR). Just did the bank a favour by cleaning it up for them and I think you can kiss any compensation for that kind deed goodbye. I would cut my losses if I were you.

 

I have renovated during a settlement period once also, but it was a deceased estate and I didn't really think of/educate myself properly of the dangers. I hope it all works out for you and I think it will work out okay. I am put off renovating prior to settlement now as I have had a bad settlement experience (turned out okay but was dicey) on another property and now I know that everything is in the vendors favour. Its just not worth the lost 6-8 weeks rent which is likely to not be all that much money to save to risk double digit numbers for.

 

I too had a problem once with early access,
the vendor who wa an old lady who lost her husband recently and was selling
had agreed in writing for early access, but decided not to let me have it

the agent said "shes in the wrong,but what you going to do about it"

some truth to what the agent said

 

conditions don't mean anything. I had a special condition in contract for a settlement stating that all debris, rubbish and drug paraphernalia/syringes, drugs, and anything on the property other than the dwelling and its fittings and fixtures were to be removed and from the property prior to settlement. We tried withholding cash, we delayed settlement, the vendor didn't agree to the amount we wanted to withhold, and they did clean up but still left a pile of junk behind and a smashed window, however our only options were delay settlement further and be charged penalty interest, and have the vendor have the option to cancel the contract if we did this for more than 14 days, or we could take it to the supreme court as the vendor was in breach of contract! Obviously we weren't going to fork out a min of 20-40k to go to court, and we didn't want to not settle as we had had a 3 mth settlement and the house value had gone up about 80k within this period (Melb), so we didn't want to tempt the vendor into reselling it to someone else at a higher price so we just sucked it up but I do feel burnt from it.

 

Yes i agree.
However if penalty interest wasnt applied. The vendor is in the wrong . Whether they agree with you or not id just with hold a huge amount. If theyre willing to cmgo to court when theyre in the wrong over such a trivial thing id be more than happy to.

I agree its not practical but i refuse to get screwed over when ive done nothing wrong and especialy if its in the damn contract

 

You think early access for renovations is bad, I've acted for clients in transactions where the buyer has negotiated early access to a vacant block of land and the right to construct a house before settlement.

How about this for a kicker, the contract was drafted so that the house became the property of the seller if the contract was terminated without compensation to the buyer. This clause wouldn't stand up in Court and a buyer would still have a claim but I wouldn't want to be the one having to go through Court to get my construction costs back.

 

Interesting JDM makes me recall a case from equity at uni of a builder building a whole house on the wrong block of land.

 

My legal team seem to think everything will be fine
This is the third sort of deal I’ve done
First one sort of smooth we agreed on early access , she changed her mind only let me clean the out side up paint the bricks two loads of rubbish and tidy the gardens stil made a great profit with only a 3k Reno
2nd one very smooth sailing no dramas at all even better profit as I got to do the inside

3rd one is structured right just he want to settle early but can’t make me do it only I can bring the settlement forward ,
Iam pretty confident once my ppor is sold and I have a date for settlement there Iam not far off for being able to pay cash for the house anyhow

 

Let's all hope that hope is a strategy.

And all the best if it pays off.

 

Are you using a conveyancer or lawyer?

 

that sounds like some Henry Kaye type of strategy!

 

seem to think ...
Get that in writing

 

Conveyancer

 

I'm the first to admit I'm highly risk averse, so I'm probably the last person to comment on bullish investment strategies.... but..... this whole situation gives me the shivers.

It sounds like you need to settle on that place ASAP before the bank gets in and takes over. Why the hell did the seller agree to a nine month settlement with foreclosure looming over him!?

I would have thought that the cost of settling on these properties in a usual time frame, absorbing the holding costs, renovating and selling as per original plan would be FAR less risky than the way you have this set up.

 

In almost all of the properties I buy, I ask for long settlement with early access to renovate, demolish (subject to DA etc.). It means I don't need to expend my capital right away and can get started on renovating, building etc. My solicitors negotiate clauses into the sales contract protecting us and the vendor (i.e. in the even that we don't settle we need to return the property back to the original condition etc).

Also communicating clearly and transparently with all parties is vital to make sure there is a successful outcome.

Each to their own but this seems to work for me.