Do we have a legal leg to stand on?
- Thread starter doozer
- Start date
Depends on how they've written the contract. If they're smart, then they've probably put the facility in there to achieve this.
Based on my reading of the contract it says if there is a change to the price then parties can rescind and deposits refunded. However we used a deposit bond and we have legal fees too of course. What's stopping the Developer continuing to increase prices prior to settlement? Surely there is something in Australian Consumer Law that protects the consumer in these situations?
If it is in the contract then yes and it is very likely in the contract. They should be required to justify the price increase.
Developing a property off the plan involves a lot of risks for the developer and the contract has to be very much geared towards them.
Unfortunately your legal costs and deposit bond costs are not claimable against the developer. Most of your legal costs should only have been incurred at settlement anyway.
Your solicitor should advise you on it now and this should be at no cost to you unless you are getting a formal advice on the prospects of litigation
Developing a property off the plan involves a lot of risks for the developer and the contract has to be very much geared towards them.
Unfortunately your legal costs and deposit bond costs are not claimable against the developer. Most of your legal costs should only have been incurred at settlement anyway.
Your solicitor should advise you on it now and this should be at no cost to you unless you are getting a formal advice on the prospects of litigation
My conveyancer says her fees are still payable regardless if we rescind. The Lawyer says not to state our position until the sunset date expires next year.
His fees are already over $700.
Options:
1. Hold out until sunset date and then commence legal action under the Australian Competition Act
2. Proceed at higher price
3. Rescind and forfeit deposit bond cost and legal costs.
His fees are already over $700.
Options:
1. Hold out until sunset date and then commence legal action under the Australian Competition Act
2. Proceed at higher price
3. Rescind and forfeit deposit bond cost and legal costs.
Is your lawyer suggesting that you may have a cause of action? Can you amplify on what basis?
if you want to have a legal blue you need to appreciate that $700 is immaterial in the scheme of what you are doing. When the tally hits $150k on each side the stakes will be getting up there
I would suggest allocating $5-10k for initial opinions and argy bargy, then decide where you want to take it
Wow, that is the downside of using a conveyancer. A lawyer would provide that sort of advice as part of the process and if you were to terminate it then you would normally only be charged a token fee (eg <$200) as they had done 2/3 of bugger all up to that stage.
The property is obviously not in QLD as conveyancers are illegal up here, otherwise I would look at it for you for free.
Seconding this point. Seriously, $700 is - what - a week's rent on the property? Your sunk costs shouldn't even be a consideration - precisely because they're already sunk. Whether you purchase or not, that money is gone.
Your only focus should be: is proceeding at this higher price still a good purchasing proposition?
Or - if you have grounds for legal action - is it going to be worthwhile pursuing legal action? Bear in mind that it's going to cost you $20-30K just to get to the point of filing a claim and having a couple of meetings with the other side.
How much is the price increase? Does the purchase still represent value?
Yes I understand the legal costs at this point are minor, however we never forsaw an issue occurring such as this so any fees will hurt at this point.
The property is now at $330,000 for 2 bed, 1 bath, 1 car in Mount Druitt area. It was a good investment minus the $40,000 increase we?re dealing with now. Stamp duty is not payable given we signed the initial contract when the NSW Govt was offering this an exemption for new properties.
I?m not sure it?s a good prospect now?
Given the matter is ongoing I?m not sure I can give too many details? One thing is for sure, I?m not up for a lengthy nor costly legal battle.
Anyone know a good Lawyer in this area (off the plan purchases) located in Sydney?
The property is now at $330,000 for 2 bed, 1 bath, 1 car in Mount Druitt area. It was a good investment minus the $40,000 increase we?re dealing with now. Stamp duty is not payable given we signed the initial contract when the NSW Govt was offering this an exemption for new properties.
I?m not sure it?s a good prospect now?
Given the matter is ongoing I?m not sure I can give too many details? One thing is for sure, I?m not up for a lengthy nor costly legal battle.
Anyone know a good Lawyer in this area (off the plan purchases) located in Sydney?
If you take a look at it with fresh eyes.
1. Would you buy it as an investment now at the new price?
If the answer to 1 is no then terminate and walk away. Life is too short to go through painful and costly litigation over such a small amount of money.
If the answer to 1 is yes then proceed with the purchase, but weigh up whether the hassle of any legal action is worth it.
I estimate that you would burn through $5-$6k just finding out if it is worth pursuing. If the developer wants to fight it then you will quickly hit $20k in legal cost, and if it went to trial $50k would not be unusual. Then if you win you may get 50-75% of those costs back, if you lose then you may have to pay 50-75% of the other side's legal costs.
And money is only half of it, it is often much easier to write it off and move on from an emotional perspective. You could devote the time and emotional energy spent on fighting to making money elsewhere.
I have a litigation practice, though I no longer actually personally do any of the litigation, I still see the bills. We have multiple litigation clients who are burning through $10-$15k a month in legal fees, every month and that is before you actually get to the hearing.
1. Would you buy it as an investment now at the new price?
If the answer to 1 is no then terminate and walk away. Life is too short to go through painful and costly litigation over such a small amount of money.
If the answer to 1 is yes then proceed with the purchase, but weigh up whether the hassle of any legal action is worth it.
I estimate that you would burn through $5-$6k just finding out if it is worth pursuing. If the developer wants to fight it then you will quickly hit $20k in legal cost, and if it went to trial $50k would not be unusual. Then if you win you may get 50-75% of those costs back, if you lose then you may have to pay 50-75% of the other side's legal costs.
And money is only half of it, it is often much easier to write it off and move on from an emotional perspective. You could devote the time and emotional energy spent on fighting to making money elsewhere.
I have a litigation practice, though I no longer actually personally do any of the litigation, I still see the bills. We have multiple litigation clients who are burning through $10-$15k a month in legal fees, every month and that is before you actually get to the hearing.
Good advice RPI and everyone else-thank you.
I honestly don?t know whether it is a good investment now or not? Sydney property prices are still rising and I think the new price is probably OK for the market but obviously not as good as it was. The fact is I don?t believe for a second the reason provided by the vendor and my fear is they will increase prices again prior to settlement.
Whatever the case, we don?t want nor need a battle through the courts.
I honestly don?t know whether it is a good investment now or not? Sydney property prices are still rising and I think the new price is probably OK for the market but obviously not as good as it was. The fact is I don?t believe for a second the reason provided by the vendor and my fear is they will increase prices again prior to settlement.
Whatever the case, we don?t want nor need a battle through the courts.
Im no legal eagle, but if the vendor has the capacity to increase the price to meet market now, then they may have the capacity to do this just prior to settlement, which will burn you in more cash and emotionally.
If this is the case, I would seriously consider the advice RPI has given above, and move your cash to a better investement.
pinkboy
Till I'm blue in the face .....
Don't buy new property. Don't buy off the plan. Just don't. LL
Don't buy new property. Don't buy off the plan. Just don't. LL
I hear you, I really do but out of 5 OTP purchases this is the first time something has gone wrong.
I hear you also doozer. You normally have the problem you are having in a rising market . Good luck. Maybe get a valuers opinion. LL
It seems we've had a win. Looks like we will get the property for its original purchase price with some amendments to the contract and forfeiting of the cost of the deposit bond seeing we can either get a new one or use a 5% cash deposit. Happy....lets hope they don't spring anymore surprises on us!
