forfeit of deposit???
- Thread starter melbourne
- Start date
It depends what is in the contract.
We released the deposit to the vendor in exchange for access prior to settlement, and one of our purchasers released the deposit to us in exchange for a long settlement.
In both cases, it was specified in the contract.
But its more common for it to be held either by the agent or by the vendors solicitor.
In New South Wales, the deposit is held between exchange and completion/settlement by the "stakeholder", which is usually the agent (or the vendor's solicitor in their trust account, if there is no agent).
More often than not, the vendor will include a special condition in the contract allowing them to have the deposit released to them if they need to pay a deposit or stamp duty on the next property they are purchasing. Purchase
There are risks with allowing the deposit to be released (e.g. if you have the right to pull out of the contract and get your deposit back, it's obviously a lot harder if it's no longer sitting in the agent's trust account), so purchasers should always ask for this special condition to be deleted.
As for delayed settlement ... In New South Wales, contracts usually specify that if either party cannot settle on the nominated settlement date then the other party has the right to serve them with a document called a Notice to Complete, which makes time "of the essence" (ie an essential term in the contract breach of which entitles the other party to terminate), and if the other party does not settle within 14 days then the non-defaulting party has the right to pull out of the Contract and get their deposit back (if they are the purchaser).
In NSW, penalty interest is usually only payable by the purchaser if they delay settlement. There is no such penalty payable by the vendor.
I'd be careful settling with the tenants in place - you risk them staying on at the property and being difficult to remove so that you can move in.
I would suggest delaying settlement until the tenants move out. I would nevertheless serve on them a Notice to Complete to protect your rights, just in case you decide that you no longer want to proceed with the purchase.
More often than not, the vendor will include a special condition in the contract allowing them to have the deposit released to them if they need to pay a deposit or stamp duty on the next property they are purchasing. Purchase
There are risks with allowing the deposit to be released (e.g. if you have the right to pull out of the contract and get your deposit back, it's obviously a lot harder if it's no longer sitting in the agent's trust account), so purchasers should always ask for this special condition to be deleted.
As for delayed settlement ... In New South Wales, contracts usually specify that if either party cannot settle on the nominated settlement date then the other party has the right to serve them with a document called a Notice to Complete, which makes time "of the essence" (ie an essential term in the contract breach of which entitles the other party to terminate), and if the other party does not settle within 14 days then the non-defaulting party has the right to pull out of the Contract and get their deposit back (if they are the purchaser).
In NSW, penalty interest is usually only payable by the purchaser if they delay settlement. There is no such penalty payable by the vendor.
I'd be careful settling with the tenants in place - you risk them staying on at the property and being difficult to remove so that you can move in.
I would suggest delaying settlement until the tenants move out. I would nevertheless serve on them a Notice to Complete to protect your rights, just in case you decide that you no longer want to proceed with the purchase.
Yes if you are representing yourself, but if you have a solicitor they won't talk to you.
I've been reading this thread to see where things landed.
I've had a several instances where things haven't gone exactly to plan, but the best thing to do is to find the opportunity that's hidden.
In many circumstances, there are conditions that would be advantageous to the seller, and when things go astray is exactly the time to start thinking. If the seller has a problem, think about ways to solve the problem. The real estate agent can be very helpful here, especially if it looks like a sale could be falling through.
Think about what would work for you, think about what you are prepared to concede and start talking to the agent.
I've had a several instances where things haven't gone exactly to plan, but the best thing to do is to find the opportunity that's hidden.
In many circumstances, there are conditions that would be advantageous to the seller, and when things go astray is exactly the time to start thinking. If the seller has a problem, think about ways to solve the problem. The real estate agent can be very helpful here, especially if it looks like a sale could be falling through.
Think about what would work for you, think about what you are prepared to concede and start talking to the agent.
Hi,
If it doesn't matter, why don't you just settle as the planned date and collect rent in the time between settlement and your current house is sold? Just think of this extra $ as a 'compensation' for the hassle you have with the contract
PS: this may have some impact on the cgt exemption when you sell the new place later on, but depending on how long you plan to live there, the impact maybe quite minuscule (sp?)
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