How to rescind a Contract?

In October of last year my fiancee and I embarked impetuously, with gusto in getting into the property market. We finally bought an off the plan unit in a 130 low rise unit development. The name is a very well known one, usually for the wrong reasons, I don't wish to mention that name (i'm not even sure if this forum allows me to anyway) until we have our facts straight about where we are at now. Please read on..

At the time we were led to believe that we were buying the property at a discount (minimum of 5%). I had started a sideline business venture in July of last year which I had assumed, foolishly, would cover the closing costs of the unit - some $52k. That business venture failed. We are now in the position where to settle on the property would prove to be very difficult. We would like to sell the property before settlement in February of 2003.

We were given a forecast of where the property would be financially from the outset until 5, 10 years down the track. A recent independent analysis has indicated that the unit would be worth $10-20,000 less than what we paid for it over a year ago. Also the plans had been changed from what we originally led to believe. It appears that we have been misled (as well as being somewhat gullable).... This week we will have the property assessed by a realtor, have the contract anaylsed by an independent property lawyer, afterwhich we will have a clearer picture of our situation. Thank you for reading up until this point....

Our questions? Is anyone able to shed some more light on which way we should go now?? Has anyone had any experience in rescinding a contract? If we do need to settle on the property, where could we source a loan of $52k to cover the closing costs?
We have already confirmed a vendor financing package interest only mortgage loan at 5.9% fixed for 3 years. Is there any other exit strategy that anyone can propose? We are looking into living in the property ourselves as our last resort which will impact our lives dramatically. The worst case scenario for us is the amount of massive debt that we could go into...

We are committed to building a property portfolio and realise that the mistakes that we've made are part of our learning process. We would like to minimise our exposure or loss, infact we're committed to turning this situation around to our favour - but we currently don't know how...

Even if you cannot respond or don't have any answers we would like to thank you for reading our request..
Is this development in Sydney or Melbourne? I'm interested in knowing the name. If you are uncomfortable positng this on the forum, just send me a personal message (PM) and I will keep it in confidence.

I don't know how it works in NSW as I've never bought a property there, however in Vic you should have 2 documents a contract of sale and a section 32. The section 32 will outline easments, floorplans, title searches and any other ancilliary information about the property, including size and measurements of your place.

Now your contract of sale should have a clause dealing with changes to the floorplan etc..etc... of your unit and outline how you can deal with this. Usually you should be able to get out if such a clause exists, as it's not what you agreed to or payed for.

I am by no means a solicitor and this info could be completely seek independant legal advice on this issue and from reading your post, it seems that is exactly what you are doing.

I'd also make noise about this, and lots of it. Contact the Real Estate body in your state, fair trading, the press and go after these people.

Also consider the location of where you have bought. Is it in a good location and is it a quality development. Your situation may suck in the short term, but medium to long you may do don't give is a learning experience and you are in at the deep end from the word go...........but you won't make the same mistakes twice.
Property Legals - Rescision Of Contract

Dear Captain,

I have just sent a reply to you. Therefore you will receive two identical emails. Once again thank you for your asistance. The story below should hopefully provide an insight into where I/we (my fiancee') are now.......

The property is in Sydney in Ashfield. After much deliberation and changing our perspective on it. We've found a way to make it a positive experience which will provide us with a spring board to enter the property market. It has caused us to stretch and learn how to turn it around. I believe that we have been successful at just that. We raised the deposit (which was the real problem as we'd planned to flip this "off the plan unit" before settlement) using our credit cards. We've found a technique from a tape set called 'Transform your Debt to Wealth' by John M. Cummuta. I found it on the Conant website Nightingale which will allow us to pay off our debts - including the apartment about 18 months faster, and it's utilizing the same money that you would of used. Just re structuring the way that we pay. Also there is great book called 'Your money: Starting Out and Starting Over ' by Anita Bell - a very simple book (no razzamatazz) with some great pieces of immediately applicable advice such as, savings v paying off credit cards/loans.

We have been through the Kiyosaki 3-day event (which was amazing, very insightful in which we met a fellow traveller on the same jorney we are still great friends now) almost 2 years ago now. We have continually studied around this area. Though, for 6 months (until recently) I was in the land of disullusionment - I stopped reading and became more like a "doubting thomas". But the break allowed me to begin to define what goals i/we really wanted - not the razzamatazz goals which i/we had in our heads after all the courses that we did.

These two references, the tape set and the book, I have found extremely simple and useful. You can apply the techniques immediately.

Therefore at the end of this experience we have an apartment, which on reflection isn't as bad as we first thought (it's negatively geared around $3-$5k a yr. Which we hope will be outweighed by the Capital growth of even 3% a yr (we bought for $362,600 - 1 bed + study, 78 sqare metres) but we found something alot more important and powerful to help us reach and to a certain extent begin to help define what goals we truly want. We will movein for 6 months to qualify for all of the grants and then rent it out as an investment afterward. We actually settle on Thursday and move in next week..

I don't know where you are but I hope that this is of some assistance..
Hey Peanut,

Thanks for an excellent post. I used to live in Syd before I made the move to melb, near Bankstown so I know Ashfield.

It's great to hear that things are working out for you and that you had the nouse to stick with it and make a go of something that was looking pretty well done.........
Re: Property Legals - Rescision Of Contract

Originally posted by Peanut

We've found a technique from a tape set called 'Transform your Debt to Wealth' by John M. Cummuta. I found it on the Conant website Nightingale which will allow us to pay off our debts - including the apartment about 18 months faster, and it's utilizing the same money that you would of used. Just re structuring the way that we pay.

Dear Peanut

I am always interested in a new idea a new perspective for common problems. If you have time can to give us all a few of the basic points of the program?