Seller backing out of contract of sale

S

Sirius

Hi all,

Last Wednesday the seller of a unit and I both signed a contract of sale. I'm still within the cooling off period. He also is the tenant while I am an investor.

He calls me on Saturday wishing not to go ahead with sale because he's in a huge debt and his bank wont finance a new property he wants, I tell him I will need to speak with my solicitor on Wednesday when he's back to work. I offered to buy the property and let him rent it until he can afford another place. He answers me back saying he wants to own rather than rent. He also mentioned that he will compensate any fees and costs I have incurred so far.

He texts me Sunday saying he wants to go ahead because it would be messy otherwise. Again he texts me yesterday saying that he won't go ahead after he spoke with his accountant and parents, however he will give me his final answer tomorrow morning.

I really like this unit. I have a feeling he received a better offer after he signed off on the contract. I wasted my annual leave finding this unit and signed the contract the night before I flew out (I live and work in SA the unit is in NSW).

Can he back out without my consent? If not, how can I protect the unit from him until settlement day? How much and how can I claim losses? For someone in financial difficulty, how can he be 'forced' to pay up?

Any advice is much appreciated!
Sirius
 
You need to get your NSW solicitor on to this. Provided the contracts have been exchanged then unless there is something in the contract giving the vendor the right to terminate the contract or you have breached one of the conditions of the contract eg if the deposit has not been paid, the vendor will be bound by the contract. You should instruct your solicitor to lodge a caveat to protect your interest under the contract.

From a practical aspect if the sale price is not sufficient to pay out any debts secured on the property at the end of the day settlement might not occur or migt be delayed
 
Thanks arc.

I'm waiting for my solicitor to go back to work tomorrow to fill him in on what happened.

Could this potentially go to court?!
 
Thanks BV,

I don't intend to back out, however I'm waiting for my deposit guarantee which might force me to ask for a couple of more cooling off days. I was previously told I could ask for an extra 5 days, however given that he wants to back out, can he use my request for more days as an excuse to legally back out?
 
Sirius said:
Thanks BV,

I don't intend to back out, however I'm waiting for my deposit guarantee which might force me to ask for a couple of more cooling off days. I was previously told I could ask for an extra 5 days, however given that he wants to back out, can he use my request for more days as an excuse to legally back out?
Click to expand...

Probably not, talk to your solicitor.
The extension of the cooling off will be done between solicitors and a couple of days isn't a big deal.
How flexible is their agent? Can you give their agent a personal cheque with no money in the account and ask them not to bank it for a couple of days until the money hits the account?
 
The agent is pretty flexible. He wants my business as he will be my property manager. He spoke to me on Saturday and said it would probably cost the seller more to back out than to press ahead. He also mentioned multiple times that I can ask for more cooling off days if I needed.

The reason I'll need extra days is because I live in a remote town, papers and documents take longer to arrive, be signed and posted back.

Thanks again.
 
Sirius said:
Thanks BV,

I don't intend to back out, however I'm waiting for my deposit guarantee which might force me to ask for a couple of more cooling off days. I was previously told I could ask for an extra 5 days, however given that he wants to back out, can he use my request for more days as an excuse to legally back out?
Click to expand...

He can't use the request to back out, but he doesn't have to grant the cooling off extension, hoping to force you to crash the contract.
 
BV said:
Probably not, talk to your solicitor.
The extension of the cooling off will be done between solicitors and a couple of days isn't a big deal.
How flexible is their agent? Can you give their agent a personal cheque with no money in the account and ask them not to bank it for a couple of days until the money hits the account?
Click to expand...

Getting an extension would be a big deal if their client advises them that they want to get out of the contract.

It sounds as though there may be no agent involved, if the vendor is calling and messaging you directly?

Edit: Just saw the new posts about the agent :)

Who did the exchange of contracts and did you put down 0.25%?
 
The vendor got my number from the agent after the latter took my permission.

The agent did the exchange of contracts and I paid the 0.25%.
 
Sirius said:
The agent is pretty flexible. He wants my business as he will be my property manager. He spoke to me on Saturday and said it would probably cost the seller more to back out than to press ahead. He also mentioned multiple times that I can ask for more cooling off days if I needed.

The reason I'll need extra days is because I live in a remote town, papers and documents take longer to arrive, be signed and posted back.

Thanks again.
Click to expand...

you can ask as much as you like, but if the vendor wants to back out he's not going to grant any extensions. I'd ask anyway, his flipping and flopping might just be sellers remorse and he may agree.

so what if you can't get the paperwork done before the cooling off period ends? are you confident to go to unconditional without the paperwork or crash the contract?
 
I have received final approvals for (1) increase in value of my house - equity and (2) loan for the rest of the balance. My bank broker is 100% confident we'll be ready for settlement, he just said he might need a few more days to secure deposit guarantee (getting the papers to me to sign them off).
 
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