Dazzling, hang in there!!
This is one of the best threads on the forum. Thanks for that.
This is one of the best threads on the forum. Thanks for that.
Every man has to have a shed
- Thread starter Dazz
- Start date
This thing is turning into a saga…..maybe this is what all transactions like this eventually turn into…..where all of the fluff and wind that you’ve been told and promised by agents eventually melts away at the pointy end of settlement and when you get down to tin-tacs, the real truth comes out.
I was told by the Vendor’s agent more than 2 months ago that there was a small item regarding the fire infrastructure on the property, but it was very minor and should be solved by the end of the week. That was the end of September.
It wasn’t mentioned on the Sales Contract – like they were supposed to do with all official dealings and notices pertinent to the Land – the wording they used was “none known”….despite the Fire Safety Defect Order being in place for over 3 years.
Surprise surprise – the Vendor’s agent slightly misunderstated the grim reality of getting the Order removed from the Land….a responsibility solely at the feet of the Vendor. Thank goodness for that. Don’t muck around with fire safety and buildings….it’s horrendously onerous to full comply with all of their ordinances.
They thought they were home and hosed…..until…..they had an on-site meeting with the chief fire safety officer, who has now ordered them, before the notice can be lifted, perform two more functions.
The first is install 2 x 120kL tanks on the property, with all necessary plumbing so the fire brigade can hook into the system and supply their fire engines with 4 hours of continual supply at their maximum pumping rate. Yowtzah !!
The second is a requirement to upgrade the existing hard plumbing to all fire fighting plumbing reticulated throughout the property up from 80mm to 100mm steel pipes. Double yowtzah !!!
The place can’t settle fully until all of this is completed.
The Vendor has taken a big gulp and tentatively estimated without official quotes that it’ll be about 6 weeks and 80K to rectify to the point where the certificate from Council can be signed off.
Needless to say this has thrown a very large pussy cat in amongst the pidgeons. I don’t believe their time or cost estimate for a minute.
Now – on the other side of the coin, I’ve finally found an officer in the Bank who is switched on, and is quick and efficient and has the necessary attention to detail. It’s marvellous to finally work with someone who turns paperwork around quickly like I do.
Yesterday I grabbed my cahunas and finally went down a rabbit hole that was a one way track. Called up the Treasury Dept and locked in two large finance contracts on the open market, scheduled to activate as of Monday – the proposed settlement date.
Of course, I would have to do that the afternoon before the Vendor’s agent emails me to say that they can’t settle. GREAT !!!
I have no choice now but to settle. So I’ve instructed my Conveyancer to draft a letter to them saying that I am prepared to settle without the certificate signed off by the Fire Safety Board, but will be holding back 400K and a written undertaking which is legal binding on the Vendor to stump up any further funds necessary to obtain the said certificate.
I think the elderly Vendors will definitely jump at this, as they have pushing this all along. It’s but a small blip in their profits, and they get to keep the rest.
The other alternative of course is to renege on the finance contracts placed on the open market and try my luck in early Feb 08 when they will probably be ready to settle fully. The break costs and high likelihood of a rate increase by then would be far more costly than settling now.
Other than that, I had a huge night last night filling in the LOC also necessary to complete the deal. I sent off 13 separate executed and scanned documents to the Banker, before arriving at the solicitors first thing this morning to drop off my PPoR title deed as security.
I’ve now got to pick up the final mortgage docs for the LOC this afternoon and later tomorrow all of the security docs are arriving by priority post to be executed and witnessed.
I then need to hand all of that paperwork to the solicitors again here in Perth, and then…and only then, will the Bank be able to pay the 5% deposit…..which should have been paid at the very latest 10 weeks ago. Oh well, a bit late but we are nearly there.
Still have no idea where or what time the settlement will take place. Monday morning sometime, but that’s still a very long way away. Of course there is another 3rd party agent involved with this, so it’ll probably get all screwed up in the communication wrangle between the now 15 parties dealing with this. We still have about 7 or 8 important steps before that occurs on Monday morning, so it’s going to be a busy weekend.
At lunch I picked up a brochure for the Cunard Lines. I’m taking the wife on a cruise after this madness.
I was told by the Vendor’s agent more than 2 months ago that there was a small item regarding the fire infrastructure on the property, but it was very minor and should be solved by the end of the week. That was the end of September.
It wasn’t mentioned on the Sales Contract – like they were supposed to do with all official dealings and notices pertinent to the Land – the wording they used was “none known”….despite the Fire Safety Defect Order being in place for over 3 years.
Surprise surprise – the Vendor’s agent slightly misunderstated the grim reality of getting the Order removed from the Land….a responsibility solely at the feet of the Vendor. Thank goodness for that. Don’t muck around with fire safety and buildings….it’s horrendously onerous to full comply with all of their ordinances.
They thought they were home and hosed…..until…..they had an on-site meeting with the chief fire safety officer, who has now ordered them, before the notice can be lifted, perform two more functions.
The first is install 2 x 120kL tanks on the property, with all necessary plumbing so the fire brigade can hook into the system and supply their fire engines with 4 hours of continual supply at their maximum pumping rate. Yowtzah !!
The second is a requirement to upgrade the existing hard plumbing to all fire fighting plumbing reticulated throughout the property up from 80mm to 100mm steel pipes. Double yowtzah !!!
The place can’t settle fully until all of this is completed.
The Vendor has taken a big gulp and tentatively estimated without official quotes that it’ll be about 6 weeks and 80K to rectify to the point where the certificate from Council can be signed off.
Needless to say this has thrown a very large pussy cat in amongst the pidgeons. I don’t believe their time or cost estimate for a minute.
Now – on the other side of the coin, I’ve finally found an officer in the Bank who is switched on, and is quick and efficient and has the necessary attention to detail. It’s marvellous to finally work with someone who turns paperwork around quickly like I do.
Yesterday I grabbed my cahunas and finally went down a rabbit hole that was a one way track. Called up the Treasury Dept and locked in two large finance contracts on the open market, scheduled to activate as of Monday – the proposed settlement date.
Of course, I would have to do that the afternoon before the Vendor’s agent emails me to say that they can’t settle. GREAT !!!
I have no choice now but to settle. So I’ve instructed my Conveyancer to draft a letter to them saying that I am prepared to settle without the certificate signed off by the Fire Safety Board, but will be holding back 400K and a written undertaking which is legal binding on the Vendor to stump up any further funds necessary to obtain the said certificate.
I think the elderly Vendors will definitely jump at this, as they have pushing this all along. It’s but a small blip in their profits, and they get to keep the rest.
The other alternative of course is to renege on the finance contracts placed on the open market and try my luck in early Feb 08 when they will probably be ready to settle fully. The break costs and high likelihood of a rate increase by then would be far more costly than settling now.
Other than that, I had a huge night last night filling in the LOC also necessary to complete the deal. I sent off 13 separate executed and scanned documents to the Banker, before arriving at the solicitors first thing this morning to drop off my PPoR title deed as security.
I’ve now got to pick up the final mortgage docs for the LOC this afternoon and later tomorrow all of the security docs are arriving by priority post to be executed and witnessed.
I then need to hand all of that paperwork to the solicitors again here in Perth, and then…and only then, will the Bank be able to pay the 5% deposit…..which should have been paid at the very latest 10 weeks ago. Oh well, a bit late but we are nearly there.
Still have no idea where or what time the settlement will take place. Monday morning sometime, but that’s still a very long way away. Of course there is another 3rd party agent involved with this, so it’ll probably get all screwed up in the communication wrangle between the now 15 parties dealing with this. We still have about 7 or 8 important steps before that occurs on Monday morning, so it’s going to be a busy weekend.
At lunch I picked up a brochure for the Cunard Lines. I’m taking the wife on a cruise after this madness.
Yikes Daz!
The end is in sight though, and you should hopefully be covered since they still have to foot the cost of the fire ordinances and you're holding back $200k just in case.
Here's a little conspiracy theory for you: I know the shed's pretty big and would burn like a b@$%@#% , but my thinking is that the tanks the fire dept. requires on site, will pretty much help any other buildings in the surrounding blocks if they go up in flames. "Quick, someone get the hoses hooked up to Daz's tanks!!"
The end is in sight though, and you should hopefully be covered since they still have to foot the cost of the fire ordinances and you're holding back $200k just in case.
Here's a little conspiracy theory for you: I know the shed's pretty big and would burn like a b@$%@#% , but my thinking is that the tanks the fire dept. requires on site, will pretty much help any other buildings in the surrounding blocks if they go up in flames. "Quick, someone get the hoses hooked up to Daz's tanks!!"
Ya reckon Steve ?? There's a lot of concrete and steel...and not alot of anything else. There's a register of chemicals onsite, and I imagine they are all well contained - they have to be as part of the Lease, so we'll see.
Looking at industrial facilities going up in smoke, they do seem to go with a bit of a bang - so you could be right.
Just got off the phone with the conveyancer, and I'm uncomfy with the 200K, and instructed them to hold back 400K - better to have the money in your pocket to spend than chase them through the courts for it.
Dunno about the conspiracy theory - could be I suppose. I just need to make sure that the Tenant isn't inconvenienced too much with all of that upgraded infrastructure. Don't want to go wrecking the turning circle of a truck due to a whopping great tank in the way.
In the end, the property will be very much more valuable I reckon having all of this nonsense being done.....I'm just glad I don't have to pay for any of it, and the price of the place was locked up 3 months ago.
Looking at industrial facilities going up in smoke, they do seem to go with a bit of a bang - so you could be right.
Just got off the phone with the conveyancer, and I'm uncomfy with the 200K, and instructed them to hold back 400K - better to have the money in your pocket to spend than chase them through the courts for it.
Dunno about the conspiracy theory - could be I suppose. I just need to make sure that the Tenant isn't inconvenienced too much with all of that upgraded infrastructure. Don't want to go wrecking the turning circle of a truck due to a whopping great tank in the way.
In the end, the property will be very much more valuable I reckon having all of this nonsense being done.....I'm just glad I don't have to pay for any of it, and the price of the place was locked up 3 months ago.
Yeah but don't forget what inside the shed Daz - offices, extremely large gas tanks, buses with engines and plenty of flammable stuff inside em, equipment etc.
I tend to agree with you - $400k sounds a bit safer, and it's not as if your keeping it, they get it back once they do what they're supposed to.
I'm no fire marshall so don't know how it all works, but I'd just chuck the massive tanks in the north western corner on the dirt area where the bitumen finishes. But then again, they may be bigger than I'm picturing too - 120kl would be fairly substantial you'd think. Don't know if they'd take your opinion into account, but if possible, try to get them to put the tanks outside of the internal boundary fencing. It will inconvenience the tennant less, and will stop him from coming to you in a month saying "hey, these massive tanks are in my way, and I can't put my chasies here - lower my rent!"
I tend to agree with you - $400k sounds a bit safer, and it's not as if your keeping it, they get it back once they do what they're supposed to.
I'm no fire marshall so don't know how it all works, but I'd just chuck the massive tanks in the north western corner on the dirt area where the bitumen finishes. But then again, they may be bigger than I'm picturing too - 120kl would be fairly substantial you'd think. Don't know if they'd take your opinion into account, but if possible, try to get them to put the tanks outside of the internal boundary fencing. It will inconvenience the tennant less, and will stop him from coming to you in a month saying "hey, these massive tanks are in my way, and I can't put my chasies here - lower my rent!"
Ah, the devil is in the detail.
Well Lynn, solicitors are involved - so no, it's all gone to custard.
Today was going to be the day…..a long time coming for all concerned, but alas circumstances beyond my control have come to the fore and the inevitable occurred….settlement has been delayed.
I got up the Bank manager 4 weeks ago, telling him to pull his finger out and get the paperwork out to me in plenty of time such that there wasn’t a mad panic running up to settlement. As usual, no word and no paperwork came through for well over 3 weeks, and then they turn around and tell me they haven’t received the paperwork back in time ?? WTF ??
Anyway, it happened again. The LOC paperwork was supposedly sent late on Thursday last week by the solicitors, with a promise from them that it would arrive on Friday, so I could get it back to them on time. The wife sat at home waiting for them all day. As usual – you guessed it – nothing turned up….so we sit here high and dry.
Of course I come into work this morning and fire up the email system to – not unexpectedly - a smarmy email from up until now by some unknown female solicitor in Melbourne announcing they cannot settle or extend funds for settlement as they have not received the executed documents back ?? I was fully expecting them to stuff up...and they did. (Hey Simon&Julie - this really does work !!)
It took me less than 10 minutes to call her up and tear strips off her, warmly reminding her in my ever so gentle manner that it is quite difficult to execute documents that have not been received from her as yet. There was no reply other than “hmmmm”. That's not an admission of liability - just a hmmm, as good as it gets from solicitors.
So, we all sit around twiddling our thumbs waiting for the postie.
On the funds to be held back issue, an official quote came back of 105K to fully rectify said faults. The Vendors wouldn’t agree to my suggested 400K, only an amount double to the quote, so 200K it is…..better in my pocket than there’s, and saves having to deal with lawyers and courts to chase them up. Legal agreements don’t mean squat, have their cash in your pocket always makes them play the game properly.
So, the Shed remains in limbo, with the elderly vendor folk still salivating about the funds about to be realised by them, and I’m salivating at the prospect of working for a few more years to support the negative cashflows – joy !!
You know, I reckon reading this thread will put pretty much everyone off commercial investing ... Mylanta, anyone?
Good luck Dazz, finger are still crossed for you (and cramping). Better make that a really long cruise - you both deserve it.
And send an anonymous postcard to everyone who's stuffed you around. I'll leave the postcard content up to you. I'm sure you've invented a few new swearwords over the last six months.
Yawn. Back to the boring buy and hold ...
DJ
Good luck Dazz, finger are still crossed for you (and cramping). Better make that a really long cruise - you both deserve it.
And send an anonymous postcard to everyone who's stuffed you around. I'll leave the postcard content up to you. I'm sure you've invented a few new swearwords over the last six months.
Yawn. Back to the boring buy and hold ...
DJ
On the contrary. I reckon that the amount of effort Daz has had to put in is worth it - else he would have pulled the pin on the deal long ago.
I'd definitely be keen on giving commercial a go - however I've got to do a heck of a lot more research etc. and Daz's info here has been gold on the processes involved.
Cheers DJ,
I'm beyond stressing about this and starting to have fun with them all now.
The Vendor's solicitor just wrote a note to officially confirm they've "misplaced" the title deed, but feel very confident that it'll turn up. If ya didn't laugh you'd cry.
The original executed Lease that is the Lessor's has also gone walkabout.
When I asked when they decided to start looking for these to rather important documents, as they were both needed to be handed over today, the solicitor's phone went silent. Another "hmmmm" moment.
....and these guys and gals have the gall to charge $ 400 an hour for their "learned efforts".
Anyway, I'm sure they're having a mad scratch around to find them both.
I'm beyond stressing about this and starting to have fun with them all now.
The Vendor's solicitor just wrote a note to officially confirm they've "misplaced" the title deed, but feel very confident that it'll turn up. If ya didn't laugh you'd cry.
The original executed Lease that is the Lessor's has also gone walkabout.
When I asked when they decided to start looking for these to rather important documents, as they were both needed to be handed over today, the solicitor's phone went silent. Another "hmmmm" moment.
....and these guys and gals have the gall to charge $ 400 an hour for their "learned efforts".
Anyway, I'm sure they're having a mad scratch around to find them both.
Indeed Melbear.
The very conservative growth rate per day on the dirt is the same as what I earn before tax.....so as of the day the Vendor signed our offer and we managed to lock in the price, was the day I replaced myself.
I may come across as being frustrated as all hell, but yes, it's worth it....and I'd put up with heaps more to unchain myself from my job.
....guess what....the postie turned up !!
The documents were in a sachel big enough, such that he had to get off his bike and needed two hands to deliver it the wife.
Nothing like "just a few more documents" as the Bank described.
Big tip - never believe the Bank when they say they'll just scoot the documents through to you.
Opened the parcel up and there were four chunky reams of documents, all with a posh letterhead and gracefully signed off by the solicitor.
They'd dodgied up the cover letter, pre-dating the letter four days, with a hilarious statement which said "please ensure the documents are executed and returned to the Bank's solicitors no less than 2 clear business days prior to settlement". That's a bit rich and a bit hard to comply with when you only receive them on the afternoon of settlement. Called her up about that little doozy.....it was another "hmmmm" moment. Cover your a$$ on the paperwork side of things, and the reality or what actually happened fades into irrelevance....you can tell they've been around the block or two.
Looked really professional, and supposedly well worth the 11K in extra fees the Bank is sticking us to use this mob......until of course you read the documents in detail and discovered they have made error after error, including getting the name of the Trust Deed completely wrong, the address of security property wrong and few other minor details like double dipping on one of the 8K establishment fees and other small errors like that.
We corrected all of the solicitor's errors and carried on. Gotta love paying people lotsa money to do a job, they stuff it up and then you have to fix it up for 'em.....and yet still pay them.
We had a laugh after reading one set of docs that the Bank required us to be sitting with a lawyer when we signed the docs to ensure we understood the obligations being entered into. After chatting with the principal Banking guy, and pointing out a few of the errors involved with the paperwork, and after the carry on with the Vendor's solicitors losing documents left, right and centre, and of course not being green first home buyers.
He fully agreed with us that it best if we side stepped the lawyers and just carried on.
So, we read, understood, corrected where necessary, executed them all and had our accountant witness the lot - only took 2 hours to sign the docs, and hand delivered them back to the Bank's representative.
The Bank and their solicitors forgot to ask for themselves to be represented as an interested party on the insurance docs for all secured properties, so we quickly flanged all that up for them and smoked the scanned cert's on email. We should of charged them $ 400 / hr for the assistance, but refrained.
So, our side is now finally ready to go.....I shall sleep well tonight.
Just waiting on the Vendors now, which is a whole different ball of wax.
Our conveyancer advised an hour ago that they have yet to get any of the Deeds of Arrangement signed by the Vendor as yet and probably won't be ready until the end of the week. Their solicitors have still not located the title deed or the original Lease, so all is normal on that front.
Received an updated quote on the fire tanks installations. That has risen from 50K up to 132K, and it doesn't include all necessary things....surprise surprise....someone told me some porkies on that front as well.
Life has been busy today.
The folly of mice and men
......until of course you read the documents in detail and discovered they have made error after error, including getting the name of the Trust Deed completely wrong, the address of security property wrong and few other minor details like double dipping on one of the 8K establishment fees and other small errors like that.
We corrected all of the solicitor's errors and carried on. Gotta love paying people lotsa money to do a job, they stuff it up and then you have to fix it up for 'em.....and yet still pay them.
Dear Daz;
Do you realize that those legal eagles you have discovered are really a flock of extinct dodo's. They couldn't be turkeys because real turkeys gobble and it sounds like the birds you have encountered are really stuffed
Received an updated quote on the fire tanks installations. That has risen from 50K up to 132K, and it doesn't include all necessary things....surprise surprise....someone told me some porkies on that front as well.
Dear Daz; That explains it pigs that fly. Perhaps the dodo's could take up the task of estimating and the pigs could do the convayencing
For anyone reaing this thread the take home message is "read everything at least three times before you sign anything".....
Brillant post Daz!!!!
......until of course you read the documents in detail and discovered they have made error after error, including getting the name of the Trust Deed completely wrong, the address of security property wrong and few other minor details like double dipping on one of the 8K establishment fees and other small errors like that.
We corrected all of the solicitor's errors and carried on. Gotta love paying people lotsa money to do a job, they stuff it up and then you have to fix it up for 'em.....and yet still pay them.
Dear Daz;
Do you realize that those legal eagles you have discovered are really a flock of extinct dodo's. They couldn't be turkeys because real turkeys gobble and it sounds like the birds you have encountered are really stuffed
Received an updated quote on the fire tanks installations. That has risen from 50K up to 132K, and it doesn't include all necessary things....surprise surprise....someone told me some porkies on that front as well.
Dear Daz; That explains it pigs that fly. Perhaps the dodo's could take up the task of estimating and the pigs could do the convayencing
For anyone reaing this thread the take home message is "read everything at least three times before you sign anything".....
Brillant post Daz!!!!
I'm in this investing gig so I can cruise along without stress. Others, like yourself, seem to want a challenge. To each their own, eh?
I'm sure financially it is worth it - Daz clearly has an overabundance of the smarts where commercial deals are concerned (and the patience of a saint)
In the end, it all comes down to what each individual is able to deal with - and I have found out that I don't deal too well with stress
better luck to you all!This thread is the 'Days of Our Lives' of Somersoft, where an hour of normal dealing stretches out over months ... and the convolutions never end ... I'm addicted, it's true. Keep with the updates Daz!
DJ
thanks for the updates daz - i'm finding the whole process very fascinating.
i agree with you tho - you just get to a stage where you are soooo over the stressing that nothing bothers you anymore. i used to stress at the hiccups on "every" settlement caused by the banks - but now just shrugged and make the calls to get it rectified.
still peeves you off that you have to pay for the priviledge of getting stuff around tho ...
i agree with you tho - you just get to a stage where you are soooo over the stressing that nothing bothers you anymore. i used to stress at the hiccups on "every" settlement caused by the banks - but now just shrugged and make the calls to get it rectified.
still peeves you off that you have to pay for the priviledge of getting stuff around tho ...
OK, so that’s done.
Settlement just went through without a hitch. The shed is now part of our stable.
I’m stressed and completely wrung out after the past week or so. The behind the scenes activities, in terms of legal agreements and negotiating terms and cash holdbacks have been furious. As most people who have been through this process could attest, what I have written down in this thread only goes a small way to describing what is necessary to close the deal and get it over the line.
The work shall have to commence in earnest in terms of bedding this one down and stabilising the portfolio. Cashflows are always the biggest concerns when you dump another property into the mix, so we’ve prepared ourselves with a decent cash buffer and we’ll ride the waves until things settle down properly.
I’ll write some more later on regarding the wash up activities…..there’s a few…..but right now I’m mentally knackered.
A strong cup of tea and a lie down is in order….
Settlement just went through without a hitch. The shed is now part of our stable.
I’m stressed and completely wrung out after the past week or so. The behind the scenes activities, in terms of legal agreements and negotiating terms and cash holdbacks have been furious. As most people who have been through this process could attest, what I have written down in this thread only goes a small way to describing what is necessary to close the deal and get it over the line.
The work shall have to commence in earnest in terms of bedding this one down and stabilising the portfolio. Cashflows are always the biggest concerns when you dump another property into the mix, so we’ve prepared ourselves with a decent cash buffer and we’ll ride the waves until things settle down properly.
I’ll write some more later on regarding the wash up activities…..there’s a few…..but right now I’m mentally knackered.
A strong cup of tea and a lie down is in order….
