1st IP in Wallsend NSW - Invalid contract - What to do

Flossy

Flossy

I am told my purchase contract on my 1st ever IP is invalid but as I am out of pocket for inspections, conveyancing, buying agent and mortgage costs, I would like to procede with the purchase if possible. Also I think it is a good investment and I don't see many houses in Newcastle for under $300,000.
  • The vendor is a company so can I contact the company owner personally?
  • Can I prevent them from selling the property next door with the same deception? It is currently listed with the same agent in Wallsend.
  • Failing resolution, can I claim compensation from the vendor for my expenses? How expensive is this likely to be?
  • Can I take action against the Solicitor and Real Estate Agent as they sold me this property and exchanged contracts through deception?

The detail
On the eve of settlement, my conveyancer received a final water bill from Hunter Water Corporation that included $11,000 for installation of seperate water metres and drainage on the 3 properties in the subdivision. The subdivison took place a number of years ago.

The Real Estate Agent, Vendor and Vendors Solicitor were aware of the issue, having sold the next door property with the same issue and deliberately concealed the issue from my representatives.

My conveyancer has made suggestions:
1/ Delay completion until the issue is resolved and request immediate possession of the property so my daughter can move in.
I wouldn't be allowed to rent to my other tenants and my mortgage approval could expire but this shouldn't be huge except if I have to pay all the banks costs again.

2/ Settle with $15,000.00 retained in trust until the dispute is resolved and a water meter installed. Costs could go way over $15,000 and the vendor could delay for years it seems.
I would consider settling with about $30,000 held in trust and a time limit set for the vendor to resolve.

Surely it will cost the vendor more than $11,000 to cancel this sale and start again just on this house and there is the one next door awaiting the same scenario?
The vendor is a company so perhaps they don't care or a real human isn't involved. This is why I am thinking of contacting the director of the company personally.

I have instructed my conveyancer to request that the vendor settle the debt with Hunter Water Corporation and procede to settlement with an amount held in trust to cover cost blow outs and repair to grounds. Awaiting a response.​

My daughter and 2 other tenants have given notice on their rentals and will have nowhere to live so I have requested immediate possession for my daughter.

Any advice or comments would be appreciated as always.

Sorry my posts are too long.
Cheers and good night,
:(
 
So were:
a) the water meters installed and the vendor didn't pay the invoice; or
b) the water meters have not been installed and the vendor has not paid the invoice?
 
Aaron, The water metres were not installed, there is still only one. The vendors have successfully ignored Hunter Water and has dragged on for about two years I think.

dtraeger, I tend to agree! I have made the request through my conveyancer.
 
Hi Flossy.
Can someone actually sell a residential property without it's own water meter, or with a meter shared with a neighbouring unrelated property owned by some stranger ? What were they thinking ? :eek:
My daughter works for a good agent in the area (not Wallsend) so PM me if you need a helpful contact.
Good luck
Cheers
crest133
 
Hi crest133, Thanks for the contact, I will PM you shortly. Apparently this lot have successfully sold one property in this way already. That purchaser has held a nominal amount in trust to cover eventual costs.

vaughan said:
You need a solicitor for this, not a conveyancer. Conveyancers cannot give legal advice.
Click to expand...
Can somone recommend a good solicitor please? I may also need to use them to claim my expenses if I cancel the contract.

The latest claim from the lying b...... solicitor for the vendor is that there are seperate water metres and sewerage connections on the property. We have asked for varification of this claim, will contact Hunter Water for more info and my daughter is on her way to the property to check for water metres and talk to the one owner in residence about her property. If they have taps attached she can turn them off and check water flow to each of the three properties.

Thanks
 
Progress today.
  1. We have found 3 water meters for 3 properties plus another metre for all 3 properties. The owner of the property next door has told us that the Hunter Water Authority signed off on the meters being at the front of the houses rather than the street but has since reneged. This being true, the vendor should have a compliance certificate from Hunter Water and or Council, shouldn't they?
  2. We have found sewer points in each backyard - round white plastic things. This does not mean that they are connected to the sewer I realise but if the sewer is connected, to move meters to the street is not major works.
  3. We have found three electricty meter boxes on one house and none on the other two. I didn't think councils allowed this. For me to get a council compliance certificate would require a survey and would take a couple of weeks I presume, as well as cost over $1000. The vendors solicitor cannot or will not provide compliance cerificates.

  • The Real Estate Agent has said the owners have no objections to us taking occupancy as well as settling with a $10,000 trust to cover potential issues with Hunter Water. I realise the agent wants his commission but I believe he is in contact with the vendor.
  • The vendors solicitor has told my conveyancer that they will not allow occupancy under any circumstances because the property complies with Water Board and Council regulations and we can settle. They will not provide compliance certificates but they now maintain that it is me holding up the settlement. I guess this claim pre-empts my claiming my costs when I cancel the contract.
My conveyancer did not talk to Hunter Water today as promised. I didn't think to ask why but suspect she was kept on hold for hours.
I have contacted the Vendor Company's owner and representative but only left messages as they are unavailable.

What difference would it make to this situation if I had a solicitor like the vendors lying b... solicitor?

Tomorrow my daughter is seeking rental accommodation for herself and her 1 remaining house mate.

Sigh....:(
Cheers
 
Solicitors are trained in litigation so the average solicitor would know more about damages and remedies for breach of contract than a conveyancer would. A conveyancer's job is to assist with the changing of names on title - from vendor to purchaser.
 
Terry_w said:
Solicitors are trained in litigation so the average solicitor would know more about damages and remedies for breach of contract than a conveyancer would. A conveyancer's job is to assist with the changing of names on title - from vendor to purchaser.
Click to expand...
Yes and that is why I employed a conveyancer. I'm asking myself whether, if the other side had used a conveyancer rather than a solicitor, would we be having these issues with non-disclosure, miss-information, deception, refusal to respond to requests etc.
If the other side had used a conveyancer, would I be in this situation where I may need a solicitor?

Anyway I am hoping to sort out these problems, despite the vendors solicitor and continue to settlement.
 
Last edited:
Progress today (or lack there of)

My conveyancer still has not been able to speak to Hunter Water Corporation.

My daughter has spoken to council and they stated that they have no interest in where the electricity meter is located.
Likewise AUSgrid, provided each house has a seperate meter which they do.
I have been given two verbal estimates of between $1000 and $2000 on relocating and electricity box so this wouldn't be a huge issue if it arose in future. Perhaps I should have my daughter contact Hunter Water.

The real estate agent told my daughter I was being difficult and holding up settlement so I have spoken to the agent myself and outlined the reasons we can't settle. He said he would speak to the vendor and ask for the relevant documentation and he will also try to talk to their solicitor.

No response or communication from the vendors solicitor i.e.
No response on Hunter Water refusing to issue a final account for settlement.
No response on what works Hunter Water requires?
No response on why they tried to conceal the problem with Hunter Water.
No response to our request for compliance documents for water and weird electricity meters.
No response to our request for copies of letters and correspondence from Hunter Water.
Oh sorry they have communicated yesterday stating that all the works on the property are compliant. Oh yes we believe you.... NOT!

The agent said he has "effectively" taken the house for sale next door off the market because of these issues. He is currently out of pocket for time, travel and his commission for this sale.

Cheers,
 
Last edited:
Still hoping to buy this house.

My daughter and one of her housemates are looking for another rental house to move into on the weekend. She still wants to rent this house from me in the future but he doesn't want to move again so there goes a great tenant.
If the tenants I had lined up can find another rental then I can hold out for quite some time if the vendor wants to continue to delay.

As I said at the start, I don't see any other 3 bedroom houses for under $300,000 in the Newcastle area and I am financially invested in this house so want to try to reach agreement and settlement.

Also I imagine it would be a long, ugly and expensive process to cancel the contract and try to get my expenses from the vendor. I'm not familiar with the process though.

Does anyone know if the vendor can still issue a notice to complete in this situation where they claim eveything is ready to settle but they refuse to settle a requirement from an authority or provide documentation to prove compliance?
 
Flossy said:
Also I imagine it would be a long, ugly and expensive process to cancel the contract and try to get my expenses from the vendor. I'm not familiar with the process though.

Does anyone know if the vendor can still issue a notice to complete in this situation where they claim eveything is ready to settle but they refuse to settle a requirement from an authority or provide documentation to prove compliance?
Click to expand...

This is why you need a lawyer. You can't just cancel a contract.
 
Terry_w said:
This is why you need a lawyer. You can't just cancel a contract.
Click to expand...

I may be using the wrong terminology in saying 'cancel' a contract and have no idea how it is done.
I haven't heard from the conveyancer today but advised her yesterday that if the problem isn't resolved tomorrow, I will be handing over to a solicitor.

Also I realise I need a solicitor if I decide it is the end of the road and need to get out of the contract but if the transfer is to go ahead do I need to get a solicitor because of the issue with Hunter Water even if a resolution can be reached?
Thanks
 
Last edited:
Flossy said:
As I said at the start, I don't see any other 3 bedroom houses for under $300,000 in the Newcastle area
Click to expand...

I understand this isn't the main focus of your thread...but I have found that there are 3 bedroom houses in the Newcastle area that are advertised for under $300000, and as such there are 3 bedroom houses that actually sell for under $300000 also. :)

Before long though, this may not be the case. :)
 
Flossy said:
I may be using the wrong terminology in saying 'cancel' a contract and have no idea how it is done.
Click to expand...

It would be 'rescind' or 'terminate' which have different meanings i think Rescind means cancel from the beginning as if the contract never was entered into and terminate means contract is just stopped at some point.
 
13B Grey Street, Wallsend

I thought I'd post a summary and final update on my unfortunate first foray into property investment.

Hunter Water was unwilling to disclose full details but told us the water and sewer connections to the 3 properties at 13 Gray Street were non-complying so they wouldn?t give a pay out figure for the one I was buying. That seemed really strange when I was about to be the legal owner! They also told us they have sent letters to the vendors requesting them to carry out works to rectify non-complying water and sewerage connections. Perhaps they sent the letters to the wrong address as surely the vendors wouldn?t knowingly try to sell property that didn?t comply!??

The contract with the vendor, ISNY Pty Limited, has been successfully rescinded by my conveyancer and I've received my deposit back from the agent. I didn't need a solicitor, that was an unnecessary expense as a conveyancer can rescind a contract. If nothing else it was good for my peace of mind to have a solicitor assess the situation and I really like them so will use them again.

I don't understand why that company would be holding 2 properties with a joint value of $6-700k, which they obviously want to get rid of, for the sake of spending $20-50k, which I assume would be able to be written off somehow? The 3rd house was sold a few months prior to my attempted purchase so I wonder what position that owner is now in as far as the water board?s requirements go?

Legal proceedings to try to recoup my losses from a company that appears to have the means to drag out a court case would have been too long and expensive for a lone investor trying to get ahead. So I?ve cut my losses and moved on but will be keeping eyes and ears peeled for any news on these properties or the company that owns them.

Basically it was all a pointless and very stressful waste of time and money.
 
Last edited:
You must log in or register to reply here.

Similar threads

keroppi_gims
Vendor not providing vacant possession at settlement
2
Replies
20
Views
10K
keroppi_gims
keroppi_gims
A
Broken water drainage pipes
Replies
4
Views
1K
Big Will
B
Flossy
Rescinding Contract - Can I claim expenses?
Replies
13
Views
2K
Flossy
Flossy
H
The Cost of Changing a Name On A Contract
Replies
12
Views
4K
lizzie
lizzie
S
Urgent - Pre approval - First loan
Replies
8
Views
3K
tobe
tobe
Back
Top