Off the plan in Melbourne... withdraw issue

Hey guys,

Bit of a long story (mainly our stupidity of not researching it properly?)

My family and I live in Sydney and we were looking to invest our money into a property. After looking into Sydney and not finding a place where we can invest, we went to this Australis opening in Rydges Hotel. They were opening up to the market a new Melbourne CBD apartment that will settle in 2017.

It looked great and everything so we decided to negotiate and came to 525k for 1 bedroom + 1 bathroom (no car space) at 40th floor. We thought at the time that it was a good deal for us.

The sales person offered us an independent lawyer to get some advice on the contract. When he came, he offered little help and had to leave half way to some meeting, then came back and didn?t really say much. Anyway we signed a contract of sale of real estate and put in $5000, done deal and everything went smoothly?

Here comes the problem.

After carefully reviewing, we believe we bought it expensive + as we live in Sydney, managing a property in Melbourne with different real estate laws and such were difficult for us to handle + want to invest in Sydney somewhere again (I know, we should've reviewed all of this BEFORE we signed this contract...). So we want to withdraw from the offer and pay 0.2%. We obviously thought the cooling period is 5 days like in Sydney but apparently, it was 3 days in Melbourne. Today is the 4th day (5th as it's now Friday) and we want to withdraw from this but because we are not really sure what to do?

1) Once the $5000 deposit has been paid for off the plan + contract of sale of real estate has been signed. Can we withdraw from the offer? Is there any way to withdraw? It is our fault for signing the contract but as I said before, the independent lawyer + sales person were there and they didn't go through the contract in details + about the cooling period (they went in and out most of the times). They've more so just stated that we have to pay on 27th of March & no discussion about the contract itself (which was why we assumed from then to 27th was the cooling period = 5 days). Additionally, I know once it's signed, normally you cannot cancel but is there special circumstances where we can withdraw (e.g. if we haven't got the money to pay the 10% yet). If we were allowed to withdraw, I also wonder how much they'll charge us if we can withdraw?

2) I'm reading the contract at the moment but it doesn't seem to say anything (direct me if I'm wrong) but I want to know whether we can sell this property (off-the-plan) before settlement. It says in the contract

"3.20 The purchaser further covenants with the vendor that he will not sell, transfer or dispose of the property unless it is a condition of any contract of sale, disposition or transfer that the purchaser, transferee or grantee of the Property and their successors in title are bound by and are required to abide by the terms and conditions as set out by special conditions ??"


Am I looking at the right section? I cannot seem to find anything close to talking about selling except this extract and it does not mention whether we can sell the property before settlement.

3) How are Melbourne market atm? We are seriously considering whether this is a good investment or we should pull it out. Rent is very low there I heard but any chance it will go up within 2 years? Can anyone who lives in Melbourne tell me generally about the market there and whether it has the potential to improve within 2 years.

4) Anything we should particularly take note of in the contract? It's bit hard to read everything obviously and when situations like on Sunday happens where the independent lawyer go out and in, it's difficult to ask them and get a proper answer.

Really long post.. but please any help would be greatly appreciated!
Thanks
 
Last edited:
You still think the lawyer the salesguy 'introduces' you to is working in your best ineterests?

He seemed like it. For example, we wanted to sign this contract under two person (and that one person wasn't with at the time) and he suggested to us to just send him a letter of authorization with the person's signature instead of the sales person who deliberately tried to make us pay $100 so we can add another person into the contract later... or maybe not...

Any help for the questions above would be greatly appreciated.
 
You have entered a binding contract and are legally bound by its terms.

I suggest you seek legal advice asap - within the next hour. Even though the contract is binding it may be defective in some aspects and this may give you the opportunity to terminate.

Also the solicitor may be negligent in not explaining the contract to you and especially not explaining the cooling off period.
 
You have entered a binding contract and are legally bound by its terms.

I suggest you seek legal advice asap - within the next hour. Even though the contract is binding it may be defective in some aspects and this may give you the opportunity to terminate.

Also the solicitor may be negligent in not explaining the contract to you and especially not explaining the cooling off period.

Apologies as it's pretty new stuff for me to deal with but any recommendation on whom to call on the legal advice? I don't live in Melbourne so I was going to call the independent lawyer that this company offered, but not sure if he is the right one to talk to, to be honest.
 
Get your own lawyer. Forget the one in Melbourne. You need somebody who is representing you.

Part of the problem with the "free" lawyer was that they probably wanted to spend as little time with you as possible, since they weren't being paid by you.
Get a new lawyer and pay them yourself. Do it quickly because time is against you.
 
Get your own lawyer. Forget the one in Melbourne. You need somebody who is representing you.

Part of the problem with the "free" lawyer was that they probably wanted to spend as little time with you as possible, since they weren't being paid by you.
Get a new lawyer and pay them yourself. Do it quickly because time is against you.

I know...

The property laws in Sydney and Melbourne is quite different I heard which is why I'm trying to seek legal advice in Melbourne (been calling couple of numbers) ... if you can, please recommend me someone...

thanks so much for you guys help in advance btw.
 
I don't live in Melbourne so I was going to call the independent lawyer that this company offered, but not sure if he is the right one to talk to, to be honest.

Don't do that as you may be suing this lawyer in a few months!

Look for a property solicitor.
 
Hi there,

$525k for a 1bdr with no car park is completely outrageous, and would most likely be over $10k psqm, I assume its in the CBD.

As its off the plan - I assume no finance clause was included.

I can provide a property specialist lawyer to speak to - if anyone will get you out of a contract he will - send me an email and I will pass on his mobile - you will need to provide the full contract and vendors statement.

Cheers, Ivan
 
Hi there,

$525k for a 1bdr with no car park is completely outrageous, and would most likely be over $10k psqm, I assume its in the CBD.

As its off the plan - I assume no finance clause was included.

I can provide a property specialist lawyer to speak to - if anyone will get you out of a contract he will - send me an email and I will pass on his mobile - you will need to provide the full contract and vendors statement.

Cheers, Ivan

Hi Ivan,

Thanks very much for this. My email is [email protected]

Please get back to me asap! Thank you so much in advance again.
 
Hoon,

How did you go?

What is the size of the apartment you signed up for?

I'm curious because according to
http://www.australisapartments.com.au/

42nd floor 51 sqm 1Br/1Bth is 499k so I hope your unit is bigger.

Sounds like you may have trouble getting out of this one, so your next step is to start thinking about finance.

Talk to some knowledgeable broker to make sure you can get a loan for it.
According to the site, building has already commenced, so it's not going to be a case of "maybe it won't go ahead".

It may not be the best buy around, but it won't be the end of the world.
CE won't disappear overnight (they make too much money :D) and some of their projects have been pretty ok (others have been a bit....less than ok).

The location is fine - it's not the seedy end of town (albeit close to the city lockup), and close to transport of all forms as well as the vic market.

The owners corp will be pretty expensive, but the flip side is that things like the 24 hour concierge is popular with tenants for security etc.

It's also good you went for a higher floor - it's a bit harder for the views to be built out and traffic noise won't be an issue (although your tenant will likely lose their laundry if they hang it out on the balcony)

The Y-man
 
Would be interested to hear how you went as well?

Anyone else considering buying off the plan needs to learn from this post so thanks for sharing OP.

1. Always get a property lawyer to peruse your contract before commiting.

2. Speak to a broker who is experienced and knowledgable with OTP purchases not associated with the business selling the property to check serviceability and order an upfront "to be erected valuation".

I know a great property lawyer for WA OTP purchases and can scratch around for a decent broker :)
 
Take a deep breath

Hoon, I personally wouldn't worry about the distance factor, you will manage your investment via a property manager.

In terms of value, I can't say whether it is over priced, but on the positive side you didn't buy in Docklands or Southbank, where it is suggested there are oversupply issues (or at least they loom).

I do think you need to critically evaluate whether you are just suffering a bit of buyers remorse or you have really serious concerns and what they are specifically.

I have other thoughts for you;
1) figure out how it is that you came to sign a contract when you seem to know that you should have done more due diligence first. You must avoid putting yourself in a position like this again.

2) ask yourself how it is that you failed to use the cooling off period, is it due to a lack of care, lack of interest, didn't get around to it or just assumed it was longer (as you say). You need to be honest with yourself to avoid further mistakes. For example, are you going to sign a loan contract without understanding key features of the loan?

3) how is it that you are now trying to work out if you have enough for the deposit - or is that just a potential excuse for trying to get out of the contract?

I don't think this is the end of the world for you assuming you can secure finance. I do think you need to better understand your own thinking processes and act more carefully from now on.

Trev
 
Hoon,

I agree, as per CosmicTrevor comment above, it's not the end of the world and the price is not too bad.

If you can't withdraw, just keep it and hold it out for a while.
 
Trev makes some good points -Hoon did you even read the contract? I must admit that I purchased about 10 houses before I ever read one. But if you don't read the contract how do you know what you are agreeing to?
 
Hi there,

$525k for a 1bdr with no car park is completely outrageous, and would most likely be over $10k psqm, I assume its in the CBD.

As its off the plan - I assume no finance clause was included.

I can provide a property specialist lawyer to speak to - if anyone will get you out of a contract he will - send me an email and I will pass on his mobile - you will need to provide the full contract and vendors statement.

Cheers, Ivan

Thanks Ivan for your help again. It was helpful talking to the property specialist lawyer.
 
Hoon,

How did you go?

What is the size of the apartment you signed up for?

I'm curious because according to
http://www.australisapartments.com.au/

42nd floor 51 sqm 1Br/1Bth is 499k so I hope your unit is bigger.

We signed up to 40th floor, a bit bigger (55sqm) than the unit you are referring too.

I agree with you, it?s not the end of the world but there?s few things that ticks me off.

1) We are buying a property that cost nearly the same as in Sydney 1 bedroom in a good location, I do think we overspent on this (it doesn?t even have car park?). Plus, the rental market in Melbourne is very low compare to Sydney so we are bit worried on how we are going to pay the bank back once it?s settled. It?s for investment purposes but I hear a lot of inconsistencies happening in Melbourne market. This is entirely our fault so I accept this if we were to go proceed with the purchase of this property but-

2) If the agent / vendor can?t cancel. at least give us a straight answer - whether they can or can?t, is there a way or not. But the way this agent & the lawyer is handling this issue is what ticks me off. Yesterday night, I messaged the lawyer to see whether he has the time to talk few things (didn?t mention our issue + rescinding of the contract at the time) and he agreed we talk 9am in the morning. This morning, at 9am on the dot, I called the guy and he tells me to call him back at 10am. I got back to him at that time again and I explained it to him. He said we should discuss the matter with sales person, not him as he is just an independent lawyer. I told him it was his obligation to notify us about important aspects of the contract (inc. cooling period) at the time when we were signing the contract or else why would we accept the agent?s offer of whether we need an independent lawyer to go through the contract? I said it in a nice for forceful tone. He eventually agreed that he will talk with the agent himself and see what he can do, told me to get back to him at arvo. Arvo comes - He didn?t get back to me, I messaged him saying whether he has spoken to the agent and found out about the issue, no reply. after an hour, around 5pm I texted him again, and he tells me he is in hospital as his wife required stitches. I wished her a quick recovery and left it for another 1-2 hours and got back to ask him if he has any time now. This was his reply -

?You need to sort this out with Vendor. I was happy to answer several general questions, but as you had not received our terms of engagement, it is large contract, I spent 10 minutes with you and it wasn?t legal advice?

My question is, if he was acting on behalf of our interest, shouldn?t he have made it clear about few things (at least the important clauses) within the contract? Instead, he left half way when we were looking at our contract, came back later and didn?t offer anything. Additionally, if he was going to help today, why did he say he was going to talk to the agent about it and told me to get back to him in the arvo??

3) The sales agent - I called him this morning and we spoke about rescinding our contract. He asks me why and obviously I explained few situations - including the fact that the independent lawyer you have assigned in this case hasn?t explained to us anything except if we were to hire him, it will cost $1300 and the payment has to be made on 27th March (which was why we assumed it this period was cooling off period). Long story short, he told me to send him an email and he will forward it to a department which deals with this issue. I can smell BS to be honest but I agreed and sent him an email that afternoon. He also promised my sister that he will contact her at 8pm tonight about the issue? which he didn?t. We called him several times, texted few times , all no reply. Right now, he is acting like he doesn?t care at all?

4) I?m also thinking? as the independent lawyer has said what he has said (meaning he didn?t act on behalf of our interest), I thought with property contracts, there needs to be an assigned lawyer on both parties for the contract to be reviewed and finalised?? Can the binding contract be signed without lawyers being involved...?

Sorry to vent out my frustration here.
And again, thanks so much for the help.
 
Would be interested to hear how you went as well?

Anyone else considering buying off the plan needs to learn from this post so thanks for sharing OP.

1. Always get a property lawyer to peruse your contract before commiting.

Definitely agree. Thanks for the advice. Really really important.. for us, this whole process was rushed through - they?ve told us they will close the expo last Sunday so we obviously thought it was our last opportunity to get the property so we rushed everything (funny thing is, they are opening it again this weekend because it was selling too well last weekend according to the agent?).
 
Hoon, I personally wouldn't worry about the distance factor, you will manage your investment via a property manager.

Good to know that. Thanks :)

In terms of value, I can't say whether it is over priced, but on the positive side you didn't buy in Docklands or Southbank, where it is suggested there are oversupply issues (or at least they loom).

Excellent news. Are there high demands in the CBD areas (where we bought the property). I read an article not long ago about oversupplying issues and wondering if it effects CBD area as well.

I do think you need to critically evaluate whether you are just suffering a bit of buyers remorse or you have really serious concerns and what they are specifically.

I have other thoughts for you;
1) figure out how it is that you came to sign a contract when you seem to know that you should have done more due diligence first. You must avoid putting yourself in a position like this again.

2) ask yourself how it is that you failed to use the cooling off period, is it due to a lack of care, lack of interest, didn't get around to it or just assumed it was longer (as you say). You need to be honest with yourself to avoid further mistakes. For example, are you going to sign a loan contract without understanding key features of the loan?

3) how is it that you are now trying to work out if you have enough for the deposit - or is that just a potential excuse for trying to get out of the contract?

I don't think this is the end of the world for you assuming you can secure finance. I do think you need to better understand your own thinking processes and act more carefully from now on.

Trev

Thanks Trev for this. I must admit, it is our fault to sign the contract without knowing the whole details of it. This property is under my sister's name and English isn't her native language which means when law & property jargons come flying around, it's bit hard for her to understand (don't get me wrong, I don't understand much either!). We have our faults, I'm not denying it which is why if we cannot rescind the contract, we will accept and agree to buy it.

I'm just very disappointed at the way agent & independent lawyer is acting to be honest. The more I deal with them, the more I feel I'm dealing with someone I cannot trust.
 
Back
Top