Buyer didn't pay deposit so I terminated contract now threatening to sue me

Discussion in 'Legal Issues' started by Renoir, 3rd Apr, 2012.

  1. Renoir

    Renoir Member

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    Ok I'm sorry I will try and keep this as short as possible.

    I was selling my property (QLD) and signed a contract on 16/3/2012 it was a long contract 90 days with lots of conditions attached (due dilligence, finance etc) it wasn't to become unconditional until 60 days and then another 30 days for settlement.

    I signed the contract with the contract stating the buyer was to pay a $25000 deposit the agent told me when I signed the contract that the buyer had paid the deposit.

    I found out last Friday 30/3/2012 that he hadn't actually paid the deposit at all and that he would be paying it sometime this week. I had been having second thoughts about selling as the price was really low and so I instructed my Solicitor to advise the buyer that I was terminating the contract as he was in breach of the terms because he has never paid the deposit.

    I thought that would be the end of it. Today my Solicitor received a response from the buyers Solicitor saying that on execution on the contract he made a request to my agent that he would pay the deposit once his property had settled and that my agent had checked with me and we both verbally agreed to that (first I have heard of it, I didn't even know he was waiting any settlement). What he is claiming just doesn't make any sense he is saying I agreed to that when I signed the contract then why wouldn't we have amended the contract to reflect that. I was hesitant about accepting such a long settlement but the agent told me that he had paid the deposit and that was a good sign and that all would be well and that I should not worry about the long settlement and conditions.

    Now the buyer is claiming that the termination of the contract is unlawful and that he will be putting a caveat on it to protect his rights to the estate and that he will be making an application to enforce his entitlements over the property unless I still agree to sell it to him. And he also conveniently paid the $25 000 deposit today to the agent a day after I terminated the contract.

    There is no way in hell I will ever sell to this guy now he is trying to bully and threaten me into doing so. From everything I understand the contract was never valid because he didn't pay the deposit when he signed the contract as is required by law.

    Can he really put a caveat on my property so I can't sell it to anyone else?

    Does anyone have any advice, I am absolutely worried sick about all this and his threats to put a caveat on my property.

    **Extra Info**

    The contract says word for word.... Deposit $25 000 Initial deposit payable when Buyer signs this contract. Balance deposit NIL (if any) payable: when unconditional
     
    Last edited: 4th Apr, 2012
  2. Peter_Tersteeg

    Peter_Tersteeg Finance broker/strategist

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    What does the contract actually say?

    There's no legal requirement to pay the deposit when a contract is signed. The contrat can stipulate that it'll be paid on a future date or when other conditions are met. Personally I wouldn't hand over $25,000 until the contract became unconditional.

    Does the contract actually say that $25k is due by a certain date? If it doesn't, you should not assume that a deposit needs to be paid at any time.

    If the purchaser feels he's got a reasonable case, he's got every right to use a caveat to protect his interests until the matter can be resolved.

    You might want to get your lawyer to actually read the contract and advise you on what it says. You can then act within those parameters.
     
  3. Renoir

    Renoir Member

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    The contract says word for word.... Deposit $25 000 Initial deposit payable when Buyer signs this contract. Balance deposit NIL (if any) payable: when unconditional
     
  4. pennyk

    pennyk Member

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    As PT Bear says, you need to check your contract... my feeling is that in the end, whoever has the clearest instructions in writing would win any legal battle. The buyers solicitor would llikely know that verbal instructions from an agent mean nothing..... but at the same time as PTB says, you need to also check that your contract is clear.

    If your contract is not 100% clear, then to be honest, I would bite the bullet and go ahead with the sale, because legal fees and heartache are likely to be more expensive than any additional price you could get.... better now to put it behind you and move on. You have no guarantee of getting a better price if you put it back on the market....

    I had similar experience with my agent, where he was telling both us and the buyers what he thought we wanted to hear, rather than the reality. eg he told us they were waiving the cooling off period, but they werent... that they'd done a building inspection when they hadnt and then suddenly once we'd already negotiated price, he said they were looking for an extended settlement. It didnt seem like he was being deceitful as such, maybe more manipulating the situation so he had the best chance of a sale. So, I began to make sure I put everything in writing and worked only thru the solicitor.. and I'll definitely never use him as a selling agent again!
     
  5. Rolf Latham

    Rolf Latham Member

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    Hi Renoir

    U have a soli

    use them :)

    in general, my understanding of a qld contract is that a deposit is payable on acceptance when the BUYER signs the contract, and often a slightly larger deposit on finance, depending on how the contract is worded.

    Usually the initial deposit is due on signing, BUT sounds like your buyer may have worded their offer to u differently ?

    Im not a legal person, but if the agreed consideration being the deposit wasnt paid under the terms of the contract, the buyer is in breach, and the deal is off.

    Your primary target here isnt the phantom buyer, its the bozo agent that led you to believe the 25 k had been paid and you acted in reliance of same............

    25 k is a BIG initial deposit for qld as well ?



    ta

    rolf
     
  6. Renoir

    Renoir Member

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    He has been told he is in breach but he just won't accept NO for an answer. The solicitor says this guy really wants the property as he has never had anyone try to fight a termination when he is clearly in the wrong.

    My main concern is that he will succeed in putting a caveat on the property, I am really worried he or his solicitor will just rock up to the titles office show them a copy of the contract and that they will let him lodge the caveat and they won't be aware that the deposit wasn't paid and that he had breached the terms and conditions of the sale and so the contract was terminated.
     
  7. Rolf Latham

    Rolf Latham Member

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    in which case you can counter sue for damages.

    Again im not a legal person, but your buyer needs to operate in the area of reality.

    If he/she wants to lodge a caveat, and a court finds there are no legit grounds, then they are toast,

    Get yourself out from under your weeny soli, and find someone wiht a bit of experience and muscle that you can rely on.

    ta
    rolf
     
  8. Aaron_C

    Aaron_C Finance Broker

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    Ah the classic old repudiation of a repudiation. Love it. Brings back memories of contract law classes.
     
  9. Rolf Latham

    Rolf Latham Member

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    ps

    very important to ensure the agent returns the deposit asap in a way that is indusputable assuming the cheque has been cashed.

    Again the agent is due for a kicking if they have cashed a cheque on a terminated contract

    t
    arolf
     
  10. Renoir

    Renoir Member

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    Hi Rolf, the agent was told both Monday when the contract was terminated and again yesterday not to accept the cheque and to return any deposit that they were holding. The idiot still accepted the cheque, can you believe the agent actually went and picked it up from the guy!!!

    Straight after the agent went and collected the cheque the buyers solicitor shot through another letter saying the agent had picked up the cheque and they have instructed the agent not to release the deposit paid by our client as if the matter escalates which it is likely to do unless I agree to sell the property then the deposit monies will be required to be paid into court.

    This is so unbelieveable it's laughable.
     
  11. Terry_w

    Terry_w Member

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    The buyer may have a case if your agent verbally made agreements with him regarding the payment of the deposit. Even though you signed a contract the agent is acting as your agent so any representations they made could be deemed to be made on your behalf as seller. That is why it is good to have a special condition in the contract which stipulates that the buyer is not relying on any verbal comments or promises made.
     
  12. Renoir

    Renoir Member

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    Hi Terry, This is where things get extra interesting! The agent never actually got me to sign a contract with him when I listed the property, he never sent me one and the property went under contract within 1 week so I guess he just forgot all about that. I actually emailed the agent today and said that I did not have a copy of the contract (Appointment to Act) and that I could never recall actually completing one and could he send me a copy of it for my records. He emailed me back to say that he can't send me a copy of it because he ripped it up as he doesn't want to sell my property anymore!

    So he never actually had any authority to act on my behalf at any time.
     
  13. Terry_w

    Terry_w Member

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    Yes, very interesting. But you went along with him acting as agent so you would have given implied authority.
     
  14. wylie

    wylie Member

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    I always thought that in Queensland the "time is of the essence" is considerably more important than in other states and doing things by the stated dates in the contract has always been stressed as being important, or we risk the vendor pulling out of the deal.

    Son's contract a week ago stipulated on the contract form that $100 was payable on signing of the contract by the vendor with $14,900 payable on 30 March 2012.

    (We could have left the total deposit at $100 but the agent wanted to cover his commission and we were happy to pay because our price was low and we wanted to show we were serious, so it was easier for us to just pay it and keep things smooth for a vendor who had already had a contract crash due to building inspection.)

    I'm guessing the fact the agent didn't get you to sign any authority to list is a huge problem for him as well.

    I don't have any idea of the other malarky the agent has been promising on your behalf. What does your solicitor say? If your solicitor doesn't seem to have a clue, I would quickly find one that does.

    You don't want to have escalating costs and escalating problems. Nip this in the bud quickly, and if you find you are bound to this buyer, then just get on with it. But I think you have every right to cancel as one of the important dates of the contract clearly was missed.

    Send peterw a message and email him. He is an agent and may have some advice for you.
     
  15. Rolf Latham

    Rolf Latham Member

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    implied auth to agent, who poss gave implied promises of the world to the buyer, who cashed a cheque for a deposit on a cancelled contract.............



    Can I ask why the deposit was so large ?

    While we are looking at implied things ................


    is the agent and the buyer "local" or is there some Nigerian Style interstate scam going on here ?


    ta

    rolf
     
  16. evand

    evand Member

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    This is a case of another unethical, lying agent going about his BS business and everyone involved left with the fallout. The guy sounds like a complete and utter tosser.

    Do as Rolf says, get a DECENT solicitor and have him write them a very strongly worded letter. No mamby pamby stuff. Most of this legal game is bluff.

    Bluff back as it sounds you are in a good position. Tell them they will be liable for all damages, costs and losses if they go ahead.

    I would also send a letter to the loser agent to pressure him to get the guy to back off as he can be partly (mostly) held responsible for the sorry saga.
     
  17. pennyk

    pennyk Member

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    If what you are saying is true, I would report the agent to your state authority, as I think they have acted illegally in not having a Contract for Sale. Do they have a relationship with the buyer?

    the agent is supposed to be acting on your behalf, not the buyers.
     
  18. Ausprop

    Ausprop Member

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    interesting stuff. stick at least $50k aside if you want to run this thru the courts
     
  19. cu@thetop

    cu@thetop Member

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    1. If he didn't pay deposit it is a breach and contract allows you to terminate
    2. If agent said something otherwise then buyer may have an estoppel claim against you
    3 If he lodges a caveat it will lapse after a few months. You can give him a notice under Land Titles Act to remove caveat- then he has to sue you in 2 weeks or caveat removed
    4. If he sues I don't think it will summarily be decided- will go to the issue of creditability which will require a full blown hearing. This will tie your property up for years unless your lawyer aggressively pursues the case
    5. Join agent as a party to the proceedings.

    Lot of money in lawyers fees- I reckon you need to talk to the buyer on this. Otherwise go to QLS for a refferal to a property /litigation lawyer in your area.
     
  20. cu@thetop

    cu@thetop Member

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    And the rest.