My partner and I have recently signed a contract of sale for a property in Aug 08. We purchased it in good will thinking we'd be able to move in as our first home in Dec 08. The REA told us that the tenants in the property are on a month by month basis and no contract was actually in place. Long story cut short, turns out that the REA deceived us into purchasing the property despite knowing that there will be problems getting them out before settlement and that they actually do have a contract in place.
Now, we will have to rent out the property till May 09 before we can move in.
Below is a letter that I've sent to the tenants as a last resort explaining our situation in detail, hoping that they will symphatize us.
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(All names are fictional. If you require more details, please kindly pm me. I'd be more than happy to share.)
First of all, we apologize for having to write to you personally. We do not have any intentions to intrude, disturb or cause you any grief you in anyway possible.
As you have or may not have already know, we have signed a contract to purchase XXX property some time at the end of August. We bought it in good faith thinking that it was going to be vacant and that your tenancy agreement was on a month by month basis. At least, this was what the selling agent, Des told us. We even tried to negotiate a much longer settlement which is the XXX of December thinking that this would provide you with more time to find a new place to live.
Initially, we wanted to put in *subject to vacant possession in the contract but Des told us not to. Prior to signing the purchase contract, we saw the contract of lease between you and the vendor. It was till May 09. we questioned this. However, Des told us that the contract were on a month by month basis and that the Landlord didn’t even actually sign the contract. Des also told us that according to the property manager, Brad that you have already found another place to stay. He gave us confidence that they will be no problems at all. Given that this is the first time we're buying a property as this is our first home, we trusted everything he said.
Des also mentioned that we shouldn’t put in the clause above given that we have many other clauses already such as subject to satisfactory inspection by my partner, subject to finance, subject to valuation not coming below purchase price etc. He told us that it will be difficult for him to try convince the vendor to accept my offer if we were to put in another clause.
Anyway, prior to this letter, we have been talking to Brad to try to get in touch with you in order to come to a resolution. We both do sincerely feel that it is unfair for requesting you both to find a new place to stay but since Brad had troubles getting in touch with you, we thought we might just go to this last resort which is to write you a letter just so understand the real situation as we are running out of time now. We do hope that you can be honest with us, as we are to you about what you both decide to do or how we can all come to a resolution. At this point in time, we have almost lost all hope in contacting Des because to him, his job is done. We are now both left stranded, neither here nor there. We don’t know what else to do.
To be completely honest with you, we both just started working recently. We were both students who studied here, got our degrees and decided to stay here in Australia after getting our PR. Now, because of this situation that we're gotten ourselves in, all because of our carelessness and naivetivity in trusting other people, we've gotten ourselves into a very complicated situation. We thought that buying our first home wouldn’t be this difficult and that it would be a happy thing.
In terms of the financial predicaments resulting from this, we had a good look at the situation at hand and what it means if you intend to remain there till May 09 and we continue renting at our current place in Carlton or another place.
We currently are paying 400 p/w living in Richmond. We gave notice to my landlord few weeks back that we will be moving out. (Back then we still didn’t know that this will be a problem as Des assured everything was under control when we checked with him.) Hence, he proceeded to find new tenants. We don’t know if he has found anyone yet, but if he didn’t, and worse case scenario, we extend the contract till May, he will definitely have our current rent increased due to the current property market. Say, if you continue to stay. We will have to pay my mortgage of nearly $2,900 per month not including body corporate and rates which will come up to about $400 per month all in.
On top of this, we will still have to pay my rent which is say $400-$430p/w. Income we will receive from you from my new property is $400 p/w and after tax, its only about $310 p/w not including management fees. Plus we will have to move out with all my furniture for a few months, then move again in 6months time if we cant afford to pay the rent increase. This is just too much trouble in every sense.
On top of this, the major problem would also be the fact that we're renting out the new place. We will be liable for capital gains tax in future if we decide to sell as the ATO will regard this property as an investment property rather than my primary place of residence. After putting all this in figures, we realize that we're really going to be in dire stress as we are adamant that there is no chance we can service the loan plus the extra out of pocket.
Once again, we would like to emphasize that we do understand that this scenario is also very unfair to you as tenants. If we were told that there will be no problems with you moving out and that the tenancy agreement was on a month by month basis, we would definitely not have signed the contract in the first place. The first thing we asked Des during the inspection was if the tenants were happy to move out. As you can tell, we are now in a very vulnerable position now as we cant have anything against Des. We've even tried talking to consumers affairs and Reiv and all they said is that its our words against his words. They have no doubts that we were telling the truth. However, in court, the judge will only look at the cold hard facts. All Des has to say is that everything is in black and white stated in the contract of sale. We made a big and costly mistake when we trusted every word he said.
Having said all this, all we can both hope for is for you to be willing to talk to us. You can be honest with us and tell us your situation, what it means if you really move out and what compensations that you may require. We are in deep distress at the moment and are very worried with this whole situation. We sincerely hope that you will consider coming in contact with us via a phone call. If you feel more comfortable, you can contact Brad too.
It would be very much appreciate if we all keep this letter just within both our parties as we really do not intend to have any shortcomings with anybody. All we are trying to do is hopefully come to a mutual resolution that you will be happy and satisfied with. We kindly hope that you will provide us with a prompt reply in regards to this matter as we're just five weeks away from settlement. All in all, we thank you for your time in reading our letter and hope to speak to you soon. We sincerely apologize if we have caused you any inconvenience that we never had the intention for. Thank you once again Mr & Mrs Tenants.
PS: We hope that you can provide us with a prompt reply as to whether you decide to come to a solution or even continue staying because our landlord has recently contacted us and said that he needs an answer by this Friday 21st of Nov 08. He wants to know if we are going to continue staying in our current place. We are honestly desperate and in dire stress now. Thank you Mr & Mrs Tenants for your understanding and time.
---
Note that Brad and Des are from different real estate companies. I hope that many will learn from my experience in regards to the above. I know its unfair to classify all REAs in the same basket. However, there are indeed some out there who are cunning, deceitful and dishonest. They would say anything just to get the deal across. I've tried contacting "Des" and he said that everything is out of his hands now. Its up to the vendor's solicitor or "Brad" to get the tenants out. He has washed his hands clean and wants nothing to do with this. He has no idea how much grieve and distress he has caused my partner and I who has made so many plans to move in by Christmas. He's totally ruined it for us.
Its okay, I just hope you guys will learn from this and make sure you have everything in black and white before you purchase a property. Trust no one but yourself. As for this "Des" guy, I'll just leave it to the man upstairs to deal with him. Take care guys. Sorry for being so long winded.
Now, we will have to rent out the property till May 09 before we can move in.
Below is a letter that I've sent to the tenants as a last resort explaining our situation in detail, hoping that they will symphatize us.
---
(All names are fictional. If you require more details, please kindly pm me. I'd be more than happy to share.)
First of all, we apologize for having to write to you personally. We do not have any intentions to intrude, disturb or cause you any grief you in anyway possible.
As you have or may not have already know, we have signed a contract to purchase XXX property some time at the end of August. We bought it in good faith thinking that it was going to be vacant and that your tenancy agreement was on a month by month basis. At least, this was what the selling agent, Des told us. We even tried to negotiate a much longer settlement which is the XXX of December thinking that this would provide you with more time to find a new place to live.
Initially, we wanted to put in *subject to vacant possession in the contract but Des told us not to. Prior to signing the purchase contract, we saw the contract of lease between you and the vendor. It was till May 09. we questioned this. However, Des told us that the contract were on a month by month basis and that the Landlord didn’t even actually sign the contract. Des also told us that according to the property manager, Brad that you have already found another place to stay. He gave us confidence that they will be no problems at all. Given that this is the first time we're buying a property as this is our first home, we trusted everything he said.
Des also mentioned that we shouldn’t put in the clause above given that we have many other clauses already such as subject to satisfactory inspection by my partner, subject to finance, subject to valuation not coming below purchase price etc. He told us that it will be difficult for him to try convince the vendor to accept my offer if we were to put in another clause.
Anyway, prior to this letter, we have been talking to Brad to try to get in touch with you in order to come to a resolution. We both do sincerely feel that it is unfair for requesting you both to find a new place to stay but since Brad had troubles getting in touch with you, we thought we might just go to this last resort which is to write you a letter just so understand the real situation as we are running out of time now. We do hope that you can be honest with us, as we are to you about what you both decide to do or how we can all come to a resolution. At this point in time, we have almost lost all hope in contacting Des because to him, his job is done. We are now both left stranded, neither here nor there. We don’t know what else to do.
To be completely honest with you, we both just started working recently. We were both students who studied here, got our degrees and decided to stay here in Australia after getting our PR. Now, because of this situation that we're gotten ourselves in, all because of our carelessness and naivetivity in trusting other people, we've gotten ourselves into a very complicated situation. We thought that buying our first home wouldn’t be this difficult and that it would be a happy thing.
In terms of the financial predicaments resulting from this, we had a good look at the situation at hand and what it means if you intend to remain there till May 09 and we continue renting at our current place in Carlton or another place.
We currently are paying 400 p/w living in Richmond. We gave notice to my landlord few weeks back that we will be moving out. (Back then we still didn’t know that this will be a problem as Des assured everything was under control when we checked with him.) Hence, he proceeded to find new tenants. We don’t know if he has found anyone yet, but if he didn’t, and worse case scenario, we extend the contract till May, he will definitely have our current rent increased due to the current property market. Say, if you continue to stay. We will have to pay my mortgage of nearly $2,900 per month not including body corporate and rates which will come up to about $400 per month all in.
On top of this, we will still have to pay my rent which is say $400-$430p/w. Income we will receive from you from my new property is $400 p/w and after tax, its only about $310 p/w not including management fees. Plus we will have to move out with all my furniture for a few months, then move again in 6months time if we cant afford to pay the rent increase. This is just too much trouble in every sense.
On top of this, the major problem would also be the fact that we're renting out the new place. We will be liable for capital gains tax in future if we decide to sell as the ATO will regard this property as an investment property rather than my primary place of residence. After putting all this in figures, we realize that we're really going to be in dire stress as we are adamant that there is no chance we can service the loan plus the extra out of pocket.
Once again, we would like to emphasize that we do understand that this scenario is also very unfair to you as tenants. If we were told that there will be no problems with you moving out and that the tenancy agreement was on a month by month basis, we would definitely not have signed the contract in the first place. The first thing we asked Des during the inspection was if the tenants were happy to move out. As you can tell, we are now in a very vulnerable position now as we cant have anything against Des. We've even tried talking to consumers affairs and Reiv and all they said is that its our words against his words. They have no doubts that we were telling the truth. However, in court, the judge will only look at the cold hard facts. All Des has to say is that everything is in black and white stated in the contract of sale. We made a big and costly mistake when we trusted every word he said.
Having said all this, all we can both hope for is for you to be willing to talk to us. You can be honest with us and tell us your situation, what it means if you really move out and what compensations that you may require. We are in deep distress at the moment and are very worried with this whole situation. We sincerely hope that you will consider coming in contact with us via a phone call. If you feel more comfortable, you can contact Brad too.
It would be very much appreciate if we all keep this letter just within both our parties as we really do not intend to have any shortcomings with anybody. All we are trying to do is hopefully come to a mutual resolution that you will be happy and satisfied with. We kindly hope that you will provide us with a prompt reply in regards to this matter as we're just five weeks away from settlement. All in all, we thank you for your time in reading our letter and hope to speak to you soon. We sincerely apologize if we have caused you any inconvenience that we never had the intention for. Thank you once again Mr & Mrs Tenants.
PS: We hope that you can provide us with a prompt reply as to whether you decide to come to a solution or even continue staying because our landlord has recently contacted us and said that he needs an answer by this Friday 21st of Nov 08. He wants to know if we are going to continue staying in our current place. We are honestly desperate and in dire stress now. Thank you Mr & Mrs Tenants for your understanding and time.
---
Note that Brad and Des are from different real estate companies. I hope that many will learn from my experience in regards to the above. I know its unfair to classify all REAs in the same basket. However, there are indeed some out there who are cunning, deceitful and dishonest. They would say anything just to get the deal across. I've tried contacting "Des" and he said that everything is out of his hands now. Its up to the vendor's solicitor or "Brad" to get the tenants out. He has washed his hands clean and wants nothing to do with this. He has no idea how much grieve and distress he has caused my partner and I who has made so many plans to move in by Christmas. He's totally ruined it for us.
Its okay, I just hope you guys will learn from this and make sure you have everything in black and white before you purchase a property. Trust no one but yourself. As for this "Des" guy, I'll just leave it to the man upstairs to deal with him. Take care guys. Sorry for being so long winded.