GST on Display Home

[Annh]

thanks MRO - it's all there in black and white in the contract but the vendor is stating that they want the inclusive price and then we pay GST on top of that which amounts to another $50K and that's just not happening. It is a valid contract which the vendor's solicitors are arguing that it isn't because the agent didn't 'have written authority' to sign it. And they won't back down on this argument. I think we walk away. They will have to re-advertise, re-engage another agent (I know they won't use the same one) and re-auction. You never know - we may just get it again at an even lesser price.

 

[Ausprop]

so an autioneer has taken a property to market without any authority to do so? is that the crux of it?

 

[Annh]

It was the vendor's solicitors who drew up the contract and the estate agent just filled in the parts relevant to (a) knock down bid and (b) GST component. Our solicitor's view is that it is a legally binding document but the vendor's solicitors are saying because the agent didn't have written authority it's not binding (I think PeterW comment above may apply).

 

[Ausprop]

I am actually surprised the bank cares about the GST provisions - they will take the cash to satisfy their secured interest, the ATO is just an unsecured creditor of the owner.

 

[Ausprop]

It was the vendor's solicitors who drew up the contract and the estate agent just filled in the parts relevant to (a) knock down bid and (b) GST component. Our solicitor's view is that it is a legally binding document but the vendor's solicitors are saying because the agent didn't have written authority it's not binding (I think PeterW comment above may apply).

do you think the property may sell cheaper now? If not, get lagal advice to consider lodging a caveat and joing the agent as a defendant in the action. Get it to mediation and the agent's insurer can cough up some damages??

 

[Annh]

Ausprop - according to the vendor's solicitors the agent DID have authority to market the property AND auction the property but no authority to sign the contract even though there was no representative from either the vendor or the solicitors at the auction.

 

[Ausprop]

Ausprop - according to the vendor's solicitors the agent DID have authority to market the property AND auction the property but no authority to sign the contract even though there was no representative from either the vendor or the solicitors at the auction.

ok, well either:

(a) he had authority, contract binding
(b) he didn't = damages

 

[Ausprop]

in fact I would just go for a cash grab on this - get a lawyer to work out the plan but let the property go and litigate the auctioneer for damages should the property resell higher. If not, buy it again cheaper.

 

[Annh]

We have a caveat on the property at the moment. And if they go through the whole process again we could get it even cheaper but that's a risk we may have to take.

 

[Annh]

The bank doesn't particularly care about the GST component - they want the 'knock down' price which we were advised at auction was GST inclusive. So in effect they want $xxxxx (the knock down price) + GST.

 

[Annh]

thanks ausprop - that's my thinking too. I guess after four months I just needed to vent, seek some on-line advice that I'm heading in the right direction and take it from here.

 

[Ausprop]

The bank doesn't particularly care about the GST component - they want the 'knock down' price which we were advised at auction was GST inclusive. So in effect they want $xxxxx (the knock down price) + GST.

yeh I see, must be a lot of negative equity.

 

[Annh]

And the vendor's solicitors haven't issued a Notice of Rescission so at least they recognise (I think) that we've done nothing wrong.

 

[Annh]

You've got that right!