FIRB approval

[touchingcloth]

Hi all,

Can anyone tell me when would someone have to apply for FIRB approval by, after signing a contract to purchase a house?

The reason I ask is that is it theoritically possibly for some to delay the FIRB application for as long as possible thereby allowing a contract to lapse to to non approval from FIRB.

I guess what I'm getting at is that can somone use this clause as an extension a cooling off period to suit themselves.

I have sold (subject to FIRB) but don't know when to start planning my move, as , the settlement date is in August, and the buyer hasn't yet applied for FIRB. Can they do this?

Thanks

 

[alexlee]

Surely the FIRB clause must have an expiry date?
Alex

 

[Ausprop]

I think you would need to speak to a lawyer but I believe they would need to make their best endeavours, just like finance clauses. However just like finance clauses they can pobably quite easily make it 'fall over'. If someone wants out of a contract you will be battling to hold them in, easier to release and move on... or try somehting else, try saying to them that you will release them contractually if they surrender their deposit or somehting, you never know.

 

[touchingcloth]

Thanks for the reply guys.

Yes, there is an expiry date claue. However, I'm not sure that this would hold much weight as FIRB has 30 days to make a decision, and should a refusal come back from FIRB after this expiry date, I think this would hold great weight than the sale contract.

Oh well time will tell.

 

[marg4000]

A neighbour sold her house under a FIRB clause. It had an expiry date and the purchaser had approval by that date. The time allowed was not great, maybe 4-5 weeks from memory. So long as the purchaser meets the criteria then there should be no delays. Hopefully your RE agent checked this out before getting the contract signed.

If this clause expires, you have the option of extending the clause or terminating the contract. Certainly I would need to see proof of application before considering an extension.

If in doubt, give your solicitor a ring.
Marg

 

[alexlee]

Thanks for the reply guys.

Yes, there is an expiry date claue. However, I'm not sure that this would hold much weight as FIRB has 30 days to make a decision, and should a refusal come back from FIRB after this expiry date, I think this would hold great weight than the sale contract.

Oh well time will tell.

What does the clause actually say? Does it say that the buyer has to APPLY for FIRB approval by a certain date? Or does it say that FIRB approval must be RECEIVED by a certain date?
Alex

 

[Kennethkohsg]

What does the clause actually say? Does it say that the buyer has to APPLY for FIRB approval by a certain date? Or does it say that FIRB approval must be RECEIVED by a certain date?
Alex

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Dear Alex,

1. For "foreign" property investors subject to FIRB's Regulations, all property sale and purchase contracts must contain the Special Condition, "this sale and purchase is subject to FIRB's approval".

2. Without this Special Condition inclusion, the Sale and Purchase Constract signed by the Foreign property investors, is technically deemed to be "illegal" and "void" as far as the FIRB is concerned.

3. The FIRB have 30 days to process an application submission from its receipt date. For more information, please visit the FIRB Website link at
http://www.firb.gov.au/content/real_estate/residential.asp

Cheers,
Kenneth KOH