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. Property Meister

    Property Meister Member

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    agree to a new contract but $100k on top of it, for your pain and BS suffererd:D
     
  2. Renoir

    Renoir Member

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    Thanks Ned, that is a good idea!
     
  3. Renoir

    Renoir Member

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    Thanks CU but no it doesn't start with a C......but these guys are very much like the italian mafia.

    All three of them (the agent, the buyer and the lawyer) are italian and they all live in the same northside suburb).
     
    Last edited: 7th Apr, 2012
  4. Renoir

    Renoir Member

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    I don't believe that the contract was never even valid to begin with so I don't get why I am even having to entertain this guys threats and intimidation tactics. My solicitor says that he is just giving him enough rope to hang himself with and if he does somehow manage to put a caveat over the property then I will be able to sue his **** off. But I'm not interested in suing anyone or playing these stupid tit for tat lawyer games.

    Bottom line is the buyer listed on the contract is the "Smith Family Trust" (not the real name of course).

    And from everything I have read of the last week regarding family trusts the contract was never valid to begin with since it is only the trustee/s who can legally enter into contracts not the trust itself.

    In legal terms, a trust is a relationship not a legal entity.

    A trust is not a legal entity and cannot contract in its own right.

    A trust is not a separate legal entity and cannot contract in its own right.

    A trust is not a legal entity in its own right so cannot enter into contracts.

    I mentioned this same point earlier in this thread and Terry responded with "But if the trustee has signed the contract then it could still be a binding contract - from that angle".

    The conveyancing paralegal in my Solicitors Office sent a letter to the buyers lawyer as soon as they received the contract asking them to advise the correct name of the buyer and they never received any response from the buyers lawyer and that was over 3 weeks ago now so that argument that Terry put forward that the contract may still be legally binding if the person who signed the contract was a trustee of the trust would be a bit of a stretch wouldn't it???
     
    Last edited: 7th Apr, 2012
  5. Terry_w

    Terry_w Member

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    Mr Trust, first name Smith, middle name Family?

    What does your solicitor say about this? I have never come across this before, but would argue that having an incorrect names does not necessarily mean the contract is not valid.
     
  6. jaycee

    jaycee Member

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    I'm a bit surprised that there isn't a sort of standard way for dealing with trusts and this legal entity issue

    I know of one company which deals with trusts the same way as Renoir outlined and requires a person to be listed as trustee of the trust
     
  7. Aaron_C

    Aaron_C Finance Broker

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    It's the old contract principle of rectification. An obvious mistake can be rectified which would give it the intended meaning. It's not as if the person signing was pretending to be anything but the trustee of the trust.
     
  8. jaycee

    jaycee Member

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    A bit of common sense !
     
  9. Renoir

    Renoir Member

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    My solicitor doesn't believe it is a valid or legally binding contract. Usually in these circumstances when an error such as this has been made a new contract is simply done to replace the old one straight away. It is usually corrected swiftly because the buyer more often than not is applying for finance etc and no financial instituations will accept a contract with "Smith Family Trust" as the buyer (because a trust is not a legal entity and cannot contract in their own right) and the titles office will also never allow the transfer of the title into the name of a family trust it has to be the trustees name so basically the old contract could never go anywhere anyway.

    My solicitor hasn't mentioned any of this to them as yet he didn't think it was necessary.....he has just said the contract was rightfully terminated as you didn't pay the deposit end of story. He is still waiting to hear back from the buyers solicitor. It is the agent who is emailing me saying the buyer wants to do a new contract etc
     
  10. Terry_w

    Terry_w Member

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    There is a standard way of dealing with trusts - and that is the trustee is the person who enters contracts. There is no requirement for a person to be listed as trustee either, it could be a company.
     
  11. Renoir

    Renoir Member

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    Yes Terry I believe this probably was meant to be purchased in a company name, I have searched his other properties on Pricefinder and they are all in a company name as trustee for his family trust. So I presume that is how he intended to purchase this property as well.
     
  12. jaycee

    jaycee Member

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    Yeah I've seen both individuals & companies listed as trustee, with the company I was talking about insisting it be listed that way on contracts etc.
     
  13. Terry_w

    Terry_w Member

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  14. Renoir

    Renoir Member

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    There is no company name written on the contract I was just saying that I think that is probably what he meant to put on the contract as his other properties are in a company name as trustee of the family trust.

    The buyer on my contract is simply "Smith Family Trust."

    And I don't want to sue anyone, I just want this guy, his lawyer and the agent to accept that the sale is not going to proceed and stop trying to force me to sell it to him.
     
    Last edited: 7th Apr, 2012
  15. Terry_w

    Terry_w Member

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    You did enter a contract to sell, now what if:
    1. He/company takes you to court. He loses and you get a costs order - but the company has no money.
    2. His company lodges a caveat - which at the moment he would be entitled to do. You try to get it removed and he ignores you, you may need to sue the company to get it removed.
     
  16. Property Meister

    Property Meister Member

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    with regards to the person who mentioned that having the wrong name ie Smith Trust vs Smith Family Trust or similar,

    its my understanding that something like that doesnt void the contract, but if in the worst case scenario it did void the contract they could come after you or someone legally????

    eg a year ago, when I was selling my business which was leased to the landlord, I changed my mind about selling for a split second and tried to get out of it, the lawyer did say that since the contract of sale said the contract included chattels, which in effect was incorrect since I didn;'t own the chattels, the landlord did, the contract could be voided, however, they could come after me and/or the landlord for misrepresentation etc.

    Wouldnt this be a technicality in this situation?
     
  17. pennyk

    pennyk Member

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    I feel more relaxed about the situation knowing that your solicitor has contacted them unsuccessfully about the contract...particularly if that is in writing. If the buyers solicitor has not responded, then you would have reason to believe that they were not pursuing the contract anyway.

    It sounds like your solicitor is working for you and has things under control. I dont think you need to be panicking just yet... ;)

    I would refer any communication from the agent to the solicitor and ask them to deal directly with them. It sounds like they are not very ethical, and its better to have all communication now going to a central point. We also did this with our agent, because we felt they couldnt be trusted in their communication. I would keep them out of the picture, because they are just muddying the waters at the moment.
     
  18. Renoir

    Renoir Member

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    Thanks Penny, I am slowly feeling a bit more relaxed about it now, my solicitor seems on the ball and hopefully he is!

    I am presuming that if someone applies to put a caveat over a property in Qld using a contract of sale as justification for the caveat that they must be required to produce a copy of the contract of sale to the titles office when lodging the caveat? Does anyone know if that is indeed the case?

    I have decided that on Tuesday morning I am going to take a a copy of the contract into the Brisbane Land Titles Office and see what they say about whether this guy will be able to use the contract to put a caveat over the property.

    I'm going to try to ascertain if they will indeed accept that the contract is legal and binding since it has the buyer as being the Smith Family Trust, they have told me over the phone they wouldn't as a contract must be in the name of a trustee but I'm going to take it into them in person and actually show it to them to try to get definite clarification about the caveat process and put my mind at ease.
     
    Last edited: 8th Apr, 2012
  19. Terry_w

    Terry_w Member

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    Renoir, the land titles offices does not do a legal analysis when someone lodges a caveat. They may do no checks at all. They just require the basis on which a person is lodging. So a lodger could write on the form that they have an equitable interest due to exchange of contract of sale. No evidence is needed.

    If you as the legal owner dispute their right to lodge a caveat you would have to apply to the supreme court to have it removed.

    Don't get too worried about things at this stage. Just let your lawyer do his work and tackle this issue if it arises. I just wouldn't be selling the house to anyone else at this stage.
     
  20. kathryn d

    kathryn d Member

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    Renoir,
    If they put a caveat on your house, put one on theirs.
     
    BMan likes this.