Actual land size is less than land size in contract

[senji]

Hi All,

I just about to settle the land portion of my first OTP (house and land) IP. The IP is located in QLD. Only 1 week before settlement, I found that the land size in actual plan sent by my solicitor is less than the land size in purchase contract for about 4 m2. I am still checking this with my solicitor, but I would like to find out what is my possible action on this matter. Any advice is much appreciated.

 

[Aaron_C]

Probably not a substantial enough change to rescind. Perhaps compensation?

 

[senji]

Probably not a substantial enough change to rescind. Perhaps compensation?

Thanks for the quick reply, Aaron.

 

[Peter_Tersteeg]

Had you known the discrepancy upfront, would it actually affect your decision to purchase or the price you've offered?

 

[senji]

Had you known the discrepancy upfront, would it actually affect your decision to purchase or the price you've offered?

Hi PT_Bear,

Of cuase I don't know the discrepancy upfront. I think it would affect my decision to purchase / the price offered because with the reduced land size it becomes one of the smallest lot in the estate. I might purchase other lot or look for another estate instead if I know the discrepancy upfront.

 

[RPI]

Hi Senji

your OTP contract would outline that a lot more variance than that is allowed, well if the developers solicitor is any good it will. It will be in the special conditions of the contract, read it and if it is still not clear, paste the clause in this thread and I will give you feedback.

regards

 

[senji]

Hi Senji

your OTP contract would outline that a lot more variance than that is allowed, well if the developers solicitor is any good it will. It will be in the special conditions of the contract, read it and if it is still not clear, paste the clause in this thread and I will give you feedback.

regards

Hi RPI,

Thanks a lot for the advice. I will try to find the clause in the contract.

 

[senji]

Hi Senji

your OTP contract would outline that a lot more variance than that is allowed, well if the developers solicitor is any good it will. It will be in the special conditions of the contract, read it and if it is still not clear, paste the clause in this thread and I will give you feedback.

regards

Hi RPI,

I found the following clause in the contract, could I know how does this clause affect my case?

"The buyer may not delay the settlement, make any objection or requisition or claim compensation or damages arising from and agrees to accept the Land subject to:
(a) any minor variation (as long as it is of no practical consequence in terms of the size, appearance, utility of the Land) in location, dimensions or area of the Land, between the Site Plan and the Survey Plan"

 

[oc1]

Hi RPI,

I found the following clause in the contract, could I know how does this clause affect my case?

"The buyer may not delay the settlement, make any objection or requisition or claim compensation or damages arising from and agrees to accept the Land subject to:
(a) any minor variation (as long as it is of no practical consequence in terms of the size, appearance, utility of the Land) in location, dimensions or area of the Land, between the Site Plan and the Survey Plan"

If the change of land size causes no disadvantage to your original plan with the block then sorry to say you will need to settle as is.

 

[senji]

If the change of land size causes no disadvantage to your original plan with the block then sorry to say you will need to settle as is.

Hi OCI,

Does it mean I am not able to request for compensation too?

 

[oc1]

Hi OCI,

Does it mean I am not able to request for compensation too?

I very much doubt it. The clause is in the contract (standard). You are still able to build the dwelling. If there was an easement created after you purchased the block, for example, you would have a case then. In this case, no.

 

[Terry_w]

Hi RPI,

I found the following clause in the contract, could I know how does this clause affect my case?

"The buyer may not delay the settlement, make any objection or requisition or claim compensation or damages arising from and agrees to accept the Land subject to:
(a) any minor variation (as long as it is of no practical consequence in terms of the size, appearance, utility of the Land) in location, dimensions or area of the Land, between the Site Plan and the Survey Plan"

This is still pretty vague. Are there any practical consequences of the reduction?

 

[pinkboy]

What if you were purchasing a block advertised as 802m2 with vision to subdivide (ie, local council rules 400m2 min block size), then find out at this stage it actually measured 4m2 less, now officially 798m2 (ie, unable to subdivide now due to unable to meet minimum block size) - would that be grounds to recind/compensation?

Numbers used dont reflect any real life numbers, just a hypothetical question posed!

pinkboy

 

[RPI]

Hi Pinkboy

That is a crappy clause by itself, it doesn't appear that the term minor variation is defined elsewhere in the contract as it is not capitalised here, but if it is that may be different.

However for your situation that is a practical consequence.

We will utilise several clauses to explain that situation in a large estate, for a 5 or less lot it is less, but still clear.

 

[senji]

This is still pretty vague. Are there any practical consequences of the reduction?

Hi Terry,

There is not any practical consequences of the reduction. But I don't think it is fair because now what I get is less than what I pay for. What if the reduction is much more than that, say 50m2, how minor is consider minor?


Hi All,

Extracted from REIQ "Term if contract" which attached with the contract as following, I am not sure whether this will help and also confuse about immaterial and material error

"7.5 Survey and Mistake
(1) The buyer must survey the land
(2) If there is:
(a) An error in the boundaries and area of the land
(b) an encroachment by structures onto or from the land; or
(c) a mistake or omission in describing the property or seller's title to it;
which is
(d) immaterial; or
(e) material, but the buyer elects to complete this contract; the buyer's only remedy against the seller is for compensation, but only if claimed by the buyer in writing on before the settlement
(3) The buyer may not delay the settlement or withhold any part of the Balance Purchase Price because of any compensation claim under clause 7.5(2)
(4) If there is material error, encroachment or mistake; the buyer may terminate the contract before settlement"

 

[senji]

Hi All,

Extracted from REIQ "Term if contract" which attached with the contract as following, I am not sure whether this will help, and also confuse about immaterial and material error

"7.5 Survey and Mistake
(1) The buyer must survey the land
(2) If there is:
(a) An error in the boundaries and area of the land
(b) an encroachment by structures onto or from the land; or
(c) a mistake or omission in describing the property or seller's title to it;
which is
(d) immaterial; or
(e) material, but the buyer elects to complete this contract; the buyer's only remedy against the seller is for compensation, but only if claimed by the buyer in writing on before the settlement
(3) The buyer may not delay the settlement or withhold any part of the Balance Purchase Price because of any compensation claim under clause 7.5(2)
(4) If there is material error, encroachment or mistake; the buyer may terminate the contract before settlement"

 

[RPI]

He Senji

Unfortunately that is something you need to have allowed for BEFORE you signed the contract. You agreed to that clause when you signed the contract, you could have asked for it to be modified before you signed.

 

[senji]

Hi Terry,

There is not any practical consequences of the reduction. But I don't think it is fair because now what I get is less than what I pay for. What is the reduction is much more than that say 50m2, how minor is consider minor?

Hi All,

Extracted from REIQ "Term if contract" which attached with the contract as following, I am not sure whether this will help and also confuse about immaterial and material error

"7.5 Survey and Mistake
(1) The buyer must survey the land
(2) If there is:
(a) An error in the boundaries and area of the land
(b) an encroachment by structures onto or from the land; or
(c) a mistake or omission in describing the property or seller's title to it;
which is
(d) immaterial; or
(e) material, but the buyer elects to complete this contract; the buyer's only remedy against the seller is for compensation, but only if claimed by the buyer in writing on before the settlement
(3) The buyer may not delay the settlement or withhold any part of the Balance Purchase Price because of any compensation claim under clause 7.5(2)
(4) If there is material error, encroachment or mistake; the buyer may terminate the contract before settlement"

 

[Terry_w]

Hi Terry,

There is not any practical consequences of the reduction. But I don't think it is fair because now what I get is less than what I pay for. What if the reduction is much more than that say 50m2, how minor is consider minor?

Hi All,

Extracted from REIQ "Term if contract" which attached with the contract as following, I am not sure whether this will help and also confuse about immaterial and material error

"7.5 Survey and Mistake
(1) The buyer must survey the land
(2) If there is:
(a) An error in the boundaries and area of the land
(b) an encroachment by structures onto or from the land; or
(c) a mistake or omission in describing the property or seller's title to it;
which is
(d) immaterial; or
(e) material, but the buyer elects to complete this contract; the buyer's only remedy against the seller is for compensation, but only if claimed by the buyer in writing on before the settlement
(3) The buyer may not delay the settlement or withhold any part of the Balance Purchase Price because of any compensation claim under clause 7.5(2)
(4) If there is material error, encroachment or mistake; the buyer may terminate the contract before settlement"

Looks like you have agreed to this.

 

[Terry_w]

Hi Terry,

There is not any practical consequences of the reduction. But I don't think it is fair because now what I get is less than what I pay for. What if the reduction is much more than that say 50m2, how minor is consider minor?

Hi All,

Extracted from REIQ "Term if contract" which attached with the contract as following, I am not sure whether this will help and also confuse about immaterial and material error

"7.5 Survey and Mistake
(1) The buyer must survey the land
(2) If there is:
(a) An error in the boundaries and area of the land
(b) an encroachment by structures onto or from the land; or
(c) a mistake or omission in describing the property or seller's title to it;
which is
(d) immaterial; or
(e) material, but the buyer elects to complete this contract; the buyer's only remedy against the seller is for compensation, but only if claimed by the buyer in writing on before the settlement
(3) The buyer may not delay the settlement or withhold any part of the Balance Purchase Price because of any compensation claim under clause 7.5(2)
(4) If there is material error, encroachment or mistake; the buyer may terminate the contract before settlement"

It may not be fair, but it looks like this is something you have agreed to when you signed the contract.

Have you surveyed the land? If so did any of the above apply?