What happens if I can’t settle? Can I be sued?

Discussion in 'Loans & Mortgage Brokers' started by C4tg1rl, 31st Mar, 2020.

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  1. C4tg1rl

    C4tg1rl Member

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    I entered a contract for an off the plan block of land a year ago and it’s nearly ready for settlement. A lot has changed since then and I am no longer in a position to buy. I cannot go through with settling the land. The contract is not subject to finance and I paid a 5% deposit. I can lose that but I’m afraid of being sued. I asked for a mutual recession but the developer denied it. What does this mean for me? If I don’t settle, will I be sued? If so, how much would it be? Is it likely? Has anyone ever had this experience? What should I know?
     
  2. Terry_w

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

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    You could be sued. But it will depend on the circumstances of the contract, your financial siuation, the developer's situation and the market situation. I suggest you seek legal advice, from a lawyer, about trying to get out of the contract.
     
  3. Trainee

    Trainee Well-Known Member

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    When you say you are no longer settle what does that actually mean? From your previous post you had almost enough cash to settle the land. Have you signed a building contract as well?
     
  4. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    The developer wants to keep you to your contract and have you settle.
    Yes, probably.
    10% of the sale value to you plus difference in price between your purchase price and the eventual price to someone else + advertising costs + legal expenses.
    Yes, quite.
    This happened to many in Melbourne (The Docklands) years ago - very unpleasant. They had to sell their family home and move in to their OTP unit in some cases.

    Do what you can to settle would be my advice (not advice).
     
  5. Beano

    Beano Well-Known Member

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    You are probably better to settle
    If you are short maybe the developer will allow you to pay the balance on the drip.

    Is it can't or prefer not to settle ?
     
    Stoffo likes this.
  6. Marg4000

    Marg4000 Well-Known Member

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    Yes, you can be sued.
    Whether you will be sued or not is up to the developer.
    However, if you genuinely can’t settle, you don’t have many options other than to seek some sort of extension or default.
     
  7. C4tg1rl

    C4tg1rl Member

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    How much would advertising costs and legal fees be? Plus 10% and my deposit, Basically looking at 6 figures of a loss ...

    This feels so unfair. Obviously circumstances change and I don’t think it’s fair to sue people ridiculous amounts. Can’t they just be happy with my deposit and be done!? They can always re sell it’s really not that much of a loss for them but life changing for me. I’ve worked so hard to get to where I am and now due to corona my circumstances have dramatically changed and I’m probably going to have to go bankrupt if they sue me. Great!
     
  8. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    in the current climate, settling limits your long term risk.

    Not settling may expose u to unquantifiable risk

    Please seek legal and credit advice

    ta
    rof
     
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  9. iloveqld

    iloveqld Well-Known Member

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    Ask a lawyer, as asking here won't help. There are a few lawyers, who are active here and I think they are good.
     
  10. snoopy

    snoopy Well-Known Member

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    Sorry to hear of your difficult and stressful situation. Can you seek an extension from the developer- they won’t be keen to go down a legal path in the current environment

    have you exhausted all your financing options?

    speak to a lawyer and they maybe able to help negotiate an exit for you with the developer

    unfortunately in the current environment there are likely to be losses but you maybe able to mitigate it
     
    Stoffo likes this.