Blow me down with a feather

Shocked - literally shocked. Stunned might be a better word.

Quietly sitting at home this morning monitoring my property-web of affairs. All systems go, all 8 leg monitors at full stretch poised for the slightest twitch, felt nothing untoward, no foul weather on the horizon, all looking calm and good....just the way we like it.

Tinkle - tinkle....what's that ?? Activity in the south-east quadrant. Hey hey hey, what little ripple do I detect ??

Inconspicuous little email forwarded from our Sydney CBD Tenant, requesting us to urgently pay a small water bill so as to avoid having the water disconnected ?? Say wha' ??

The deal is we pay the outgoing bills as they arrive, and we recover everything from them via 1/12th of the total bill every month. Coolo....up until now. (Note : In the back of my mind, felt it slightly strange that we haven't had a bill for anything since we settled in February....it's only been 8 months....maybe they all just forgot.....).

Call up the Sydney Water authority and let them know that I'll pay the small outstanding bill via BPay immediately.....but just curious to know why we haven't received any rates, or water bills, or anything for matter since Feb. I'm finding it strange to have this disconnection notice in the name of the former Vendor....probably why it wasn't paid....

Lovely helpful gentlemen offers to put me on hold to check the name of the account. After 3 minutes of serenading with Rachmaninov's 17th movement in E minor, he comes back to inform me that "No sir, the name on the account is correct, that name is the registered proprietor of the property, all is well."

Cyclone category 5 just blew in, no more little tinkle tinkle....I've been blown clean off my web and down the spout without a trace.

WTF !!

"Thank you my good man, you've been most helpful. Ta ta for now."

Re-gather thoughts, compose myself, what the hell is going on ??

Wife comes in and asks if everything is alright.....ummm....no it's not !!

Immediately pull up the final email from the supervising solicitor in Sydney back in February congratulating us on the settlement of the property. Details blah blah bah about when the council rates have been paid up to, when the water rates, land tax and strata fees have been paid up to....too easy.

Start writing an email to the solicitor, essentially saying "Sorry to inconvenience you ol' chap, but could you just confirm that indeed settlement did go through and we are in fact the Owner ??"

This was the reply...
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Put simply, we have done our job properly - the one that has not is obviously your mortgagee. It has the title deed, transfer (and its mortgage) and seems not to have registered them.



As soon as the Transfer is registered, the Notice of Sale we handed to the bank on settlement is activated and LPMA (Titles Office) notifies all relevant authorities, including Council, Sydney Water and the Land Tax Office, of the change in ownership.



You should follow up your mortgagee to find out why it has not lodged the documents (including the Transfer and it mortgage) for registration, have it do so immediately and claim from it any interest for late payment of rates that you incur due to its negligence and tardiness.
--------------------

Excellent !! We don't own the property !! Just a smallish detail....


Immediately write a fairly terse email to the head knob Banker in charge of the loan....had to go fairly easy as he is the one herding through the finance for our next upcoming loan deal...tricky stuff....otherwise his rear anatomy would have looked something akin to swiss cheese.


As usual, no written reply from the Bank, but an apologetic phone call saying he cannot understand how that could possibly be, but he has checked and in fact nothing was done at settlement, they have the title deeds, the unregistered Transfer of Land and the unregistered mortgage languishing somewhere in their files and he has the full team - late on a Friday night - scouring through to find them all....


He said it was doubly curious cos he checked that we had paid the fees to have it done - yep, had checked with his assistant after settlement and she said everything was tickety boo, and their internal audit team went thru our file like a dose of salts as we were a new customer to the Bank about 2 months ago and everything checked out fine.


I said well you can sack your assistant and also sack your auditors - cos they are worse than hopeless.


I'm left here dangling out on a limb with not a jot to my name, no property, and some vague corporate entity on the title deed of 'our' property who has taken off with our bank cheques.


Meanwhile, the Bank has nothing either. No registered mortgage and no leverage against us. I told him you can forget sending us this month's mortgage bill, I ain't paying cos I don't own anything and have no debt with you. His only reply was a silent gulp.


Thankfully the Tenant knows nothing of this, as all of the negotiating work I have secured over the last few months pulling them into line would be undone if they ever caught wind that I am not the official Landlord.


Well.....you think you've seen most things.....but this thing today has blown me away. Over 5 million bucks down the Swanee and not a cracker to show for it. Someone's head has to roll over this - surely to God. It might all be rectified on Monday morning, but right now I'm up about 7 creeks without a toothpick for a paddle.


Lessons learnt ?? Where do I start ??

1. No matter what happens, when you buy property, everything always falls back into your lap. It might sit there festering for months on end, but eventually all drains lead back to the main sewer...and that's where the Landlord is.

2. Check, double check and triple check. Don't believe your Banker. especially don't believe a word your solicitor says or writes.

3. Two or three weeks after settlement (not 8 months in our case) double check to see at the Land Titles office that your name or your company is officially listed, otherwise you ain't got diddly squat.

4. Due to the shenanigans in the NSW system, especially harsh Vendors writing unbelievably unfair contracts of sale in the market we operate in, we have avoided it like the plague. This experience has probably sealed our fate and we'll never purchase in NSW again.

5. Due to the NSW history, we took the advice of solicitors and registered a caveat on the title as soon as we had a caveatable interest, i.e. as soon as we exchanged. That, it turns out, is the only legal leg we have to stand on this weekend. The Vendor, who still owns it, wouldn't be able to sell it from under us without removing that. I foolishly suggested to the solicitor a week after settlement that now we own the property, it would seem OK to remove the caveat. He suggested we don't, as it doesn't hurt to have it on the title if you own it. I didn't double check that word IF.


I'm still a little in shock to tell you the truth. Not happy at all. Let's see what next week brings....hopefully we might get to own it soonish.


Am I the only plonker in Australia who assumes he owns a property and finds out 8 months later he doesn't own jack squat ??
 
Thanks and my sympathy

Hey Dazz thanks for posting this it's a great lesson learned never trust anything you haven’t seen with your own eyes post that I (and alot of others) should take on board and learn from.

Kudos heading your way for the remarkable lack of expletives in your post (if it had been me I wouldn't have been able to talk without swearing for a week let alone typing a well thought out and constructed post).

Hope it all straightens itself out for you soon.
 
3. Two or three weeks after settlement (not 8 months in our case) double check to see at the Land Titles office that your name or your company is officially listed, otherwise you ain't got diddly squat.

2-3 weeks they'll never do. Last purchase took 12.
 
Thanks for sharing.

You're a hard man Dazz, but I take my hat off to you for confessing that even those who have been in the game for many years can still be hoodwinked.

A good lesson for us all!
 
If you ask me it would be the job of your legal representative to make sure all that was done, specially given the circumstance that your interstate.
That's the first dummfvk on the list that should be roasted.
#2 on the list
When & where was it, who was present and what did they actually do at the exchange?
 
Thank you again for sharing another tale of a day in the life of a "boring rent collector" hope it all gets sorted with minimum fuss.

It goes to show you need to have an auditor with OCD going over the books.
 
A strange story.

My Grandfather was clearly "well off" owning a grand house right on the beachfront of what was, admittedly, a frontier town. He owned, and his son sailed, 16ft skiffs capable of winning national c'ships on Syd Harb and was friends with Sir Reg Ansett.

Recently a cousin (who knew him best) told me that he had half owned a well known Sydney central hotel with Reg and he was diddled out of it (Any descendants of Sir Reg be assured that I am not finger pointing) but he was not big on paperwork and his interest was lost. I dismissed the story as "an overactive mind" on my cousin's part but possibly it could have happened. I'm talking the fiftys here.
 
Dazz said:
You should follow up your mortgagee to find out why it has not lodged the documents (including the Transfer and it mortgage) for registration

Hi Dazz,

My solicitor convinced me into getting some "Title Insurance" for the residential units/apartments I have purchased.

Not sure if something like this would have helped protect you further in such a situation?:

http://www.stewartau.com/public//NewCommercialPurchaserPolicy.html

Hope it gets sorted out on Monday.

The other thing I'm wary of is unintentionally getting a ''default'' on something small like a water bill, and then having this put on your credit record/file, and having this then preclude you from getting loans from some banks... scary stuff.

Probably not an issue here though as the bank stuffed up in the first instance...
 
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Dazz

What a amazing story DAZZ, lets just hope the previous, woops current vendor doesn't try to sell it again. The only question I have about it is doesn't stamp duty when paid need to be accompanied with the title?

Jezza
 
Wife comes in and asks if everything is alright.....ummm....no it's not !!



2. Check, double check and triple check. Don't believe your Banker. especially don't believe a word your solicitor says or writes.

Yep, I know the feeling but to a much smaller degree... I handle all our investments and it's quite a sinking feeling when you rely on other parts of your team to do their job but they stuff up and try to cover their **** while your left paying the bills... and it's not that easy to explain to the other half.

Are you sure it's the solicitors you shouldn't be believing?? All of my previous grief has been caused by a particular bank. They told me soo many lies and often blamed my solicitor, I eventually worked out they were the ones at fault.
 
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I don't understand why no settlement ever goes smoothly.

I've had and seen a lot of problems, but this one is the worst I've ever heard of.

It's as if each and every settlement is the first one that the vendors, the solicitors, and the banks have ever done.

Why is it so hard to get right?
 
The only problem I ever had was releasing the title deeds after the loan was paid.
I've never had, and hardly know of settlement issues except due to finance delays.
This may be due to the fact that I have relatives who are lawyers and chase up, check and confirm all steps, processes and details.
Only once have i used a firm ( apartment buy & sell in Qld) without knowing them, and there was no problem. They looked after all the details with 2 calls each transaction.

Which is why I blame the lawyer who is supposed to be your legal representative and act on your behalf during the transaction.
If the bank didn't do it, he was supposed to check & confirm for you that all legal documents were done & correct.
I'm also of the impression that you used a Sydney lawyer and not your locals.
Or maybe my lawyers just spoil me.
 
UNBELIEVABLE!

Your lawyer is a dumnfnark... they have ultimate responsibility for the conveyance of the property. Can you tell us who the morons were? And which crappo bank?
 
Deed of covenant on sale?

You still would have the caveatable interest if you hadn't lodged it already.

Don't worry be happy.:D
 
Consequences....

Thanks for your thoughts and comments.


Quite a staggering turn of events. Having had a few hours to reflect and get over the shock, coupled with the fact it is a weekend and no-one can do anything about it just now, I still don't quite know what to think.


I just sent a note briefing my accountant, only to realise we probably won't be able to officially claim any rent received nor interest paid, and the depreciation schedule we've had done won't apply.


If the papers are lodged next week, I presume that is when the ATO will deem settlement to occur ??


Jezza brought up stamp duty - don't know what the scoop is with that ?? Was it paid the first go around ??


My assumption that my solicitor was supposed to hustle everything up, and double check that all papers were submitted to authorities correctly - is that false or true ??


Is it solely down to the mortgagee to lodge all documents, or should my solicitor have picked this debacle up.


Our solicitor was a partner in the firm specialising in commercial matters. Not wet behind the ears. Looking back this evening over the hundreds of emails that went back and forth between ourselves to get this deal over the line, he never put a foot wrong, except we don't own the property.


The hardest thing tonight has been to call my parents and my sisters and their husbands to inform them of a fairly major royal screw-up. They have relied on me to escort them through their very first commercial transaction, and having had win after win since we first spotted the property back in July '09, I now feel sick thinking that officially we have nothing.


Hopefully next week the Bank will find the docs and register them all properly....


Never a dull day being a rent collector....
 
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Hello Dazz

Lenders do not commonly lodge the Registered Proprietor Transfer of Land documents until the last day of the required period for lodgement.

In Victoria, this is no later than 90 days following settlement

The day of settlement is when you become, or become eligible to become, the Registered Proprietor of the Land. This is when the Contract is satisfied, not when the Transfers are lodged.

The lenders collect the Stamp Duties and other Government Fees at settlement and then hold the funds in readiness for lodging and stamping

These funds can run into many thousands of dollars for each settlement. If they want to invest them in the overnight markets, or any way they choose, they can do so.

Your tax, depreciation etc are as from the Contractual and actual date of settlement between the parties

If the Government determined that tax, depreciation etc commenced from the date of lodgement of the Transfers then we would all know about it.

Late lodgement, or even forgotten lodgements, are not uncommon.

I have one customer who decided to refinance after about three years of ownership. The incoming lender discovered that the Transfer and thus the Mortgage had never been registered! Actually, they had, but the titles Office had registered the mortgage over the next door neighbour's car port!

The Conveyancer checked all their documents, and the lender checked all theirs, and it was a one digit data entry mistake at the Titles Office, which might never have been discovered if the owner had not wanted to deal with the property - or until the neighbour wanted to deal with theirs!

For the sake of $20, it is a good idea to routinely run a Title Search at the 91 day after settlement mark, to make sure that the lender has lodged the Transfers. Up until then, it is at their discretion to lodge so for nearly every transaction there will be a period of ownership limbo between settlement of the Contracts and Registration of the Transfer of Proprietorship.

Bit of a nuisance when the matter has been overlooked for eight months, but it will all be sorted out on Monday and the situation will revert to it's native nothingness.

I would suggest that this is probably one situation when the least said, the better. Kicking up a storm now will only draw public attention to the oversight when in reality the Bank will probably have the conveyancing clerk standing outside the Titles Office by 9am with the complete file ready to be lodged.

Hope this helps
Kristine
 
Your solicitor has not done anything wrong. Indeed your solicitor has protected you by telling you to keep the caveat on. It is your lender's job to lodge the documents for registration.
 
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