Would like some legal feedback of a contract to purchase a residential property. I have paid a $1000 expression of interest to the developer's solicitors and signed an 'expression of interest' form.
Construction will start May and to be completed in December.
The 'expression of interest' form mentions that a total deposit of 10% is required. Options include: cash, bank cheque, deposit bond, and bank guarantee.
The agent has emailed me a copy of the contract. There has been some hint that the expression of interest does not guarantee that I will get the property.
The reference schedule of the contract states that the balance of the deposit (i.e 10% - $1000) is "payable immediately upon execution of this contract by the buyer".
A few other notes from the contract:
"The buyer must pay the deposit to the deposit holder at the time specified in the reference schedule". (ummm...there doesn't appear to be any rime specified?!)
"The deposit holder must pay interest on the deposit to the buyer and seller to be shared between them equally if the contract settles; or in any other case , the party entitled to the deposit"
"The seller must fix scratches, chips, dents, stains or marks on any surface, covering or fixture or fitting that are notified to the seller within 14 days after the possession date; and any other defects of workmanship or materials that are notified to the seller within 3 months after the possession date." (I thought this would have been longer, and have been told elsewhere 6 months)
"Any dispute about whether a defect exists or whether a seller has remidied a defect will be determined by the seller's consultant acting as an expert and the parties agree to be bound by the seller's consultant's decision" (What the?! Surely this should be an independent 3rd party?!)
So my questions are:
1. How long should I wait before signing the contract? Can they sell to someone else if I delay too long. What likely timescale are we looking at? What would you suggest?
2. Is 10% deposit reasonable? Thats a long time away until settlement. What terms should I be negotiating here? I would be more comfortable with 5%. Dividing the deposit interest 50/50 with the seller seems unreasonable given its my money.
3. The timescales and processes mentioned above with regards to identified property defects - Are these standard clauses and therefore reasonable?
4. What are my best options here do you think?
Thanks in advance for your advice and feedback
Construction will start May and to be completed in December.
The 'expression of interest' form mentions that a total deposit of 10% is required. Options include: cash, bank cheque, deposit bond, and bank guarantee.
The agent has emailed me a copy of the contract. There has been some hint that the expression of interest does not guarantee that I will get the property.
The reference schedule of the contract states that the balance of the deposit (i.e 10% - $1000) is "payable immediately upon execution of this contract by the buyer".
A few other notes from the contract:
"The buyer must pay the deposit to the deposit holder at the time specified in the reference schedule". (ummm...there doesn't appear to be any rime specified?!)
"The deposit holder must pay interest on the deposit to the buyer and seller to be shared between them equally if the contract settles; or in any other case , the party entitled to the deposit"
"The seller must fix scratches, chips, dents, stains or marks on any surface, covering or fixture or fitting that are notified to the seller within 14 days after the possession date; and any other defects of workmanship or materials that are notified to the seller within 3 months after the possession date." (I thought this would have been longer, and have been told elsewhere 6 months)
"Any dispute about whether a defect exists or whether a seller has remidied a defect will be determined by the seller's consultant acting as an expert and the parties agree to be bound by the seller's consultant's decision" (What the?! Surely this should be an independent 3rd party?!)
So my questions are:
1. How long should I wait before signing the contract? Can they sell to someone else if I delay too long. What likely timescale are we looking at? What would you suggest?
2. Is 10% deposit reasonable? Thats a long time away until settlement. What terms should I be negotiating here? I would be more comfortable with 5%. Dividing the deposit interest 50/50 with the seller seems unreasonable given its my money.
3. The timescales and processes mentioned above with regards to identified property defects - Are these standard clauses and therefore reasonable?
4. What are my best options here do you think?
Thanks in advance for your advice and feedback
