Settlement query - urgent!

Discussion in 'Legal Issues' started by Lissy, 24th Oct, 2002.

  1. Lissy

    Lissy Member

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    Hi everyone
    Have an interesting situation with a settlement due tomorrow, so I thought I'd see what ideas or experiences others have had.
    During the 60 day settlement process, the vendor asked if they could settle on the Friday (tomorrow) but not hand over vacant possession until Sunday or Monday. This was because she was buying a caravan and using the settlement funds to pay for it.
    My lawyer suggested that was fine, as long as $5000 of the settlement funds were held in trust until vacant possession was obtained. This suggestion was rejected.
    Today I went to do the final inspection, the RE agent had arranged for the vendor to open the house - guess what, no show. Not sure if that was as a response to the above tussle or not. But it highlighted one thing - the agents have no keys to the house. It was also apparent that the house is far from vacant at this point in time.
    So my question is - what should I do? I have a suspicion that the vendor is planning to go ahead with the original plan, despite having no legal agreement to that effect. Without keys, there's not much I can do - is there???
    Looking forward to your responses!
     
  2. asy

    asy Member

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    Lissy!

    You can refuse to settle unless they allow you to inspect!

    Please note this:


    This means that the Vendor MUST allow you access to inspect the comdition of the property within the 7 days preceeding the settlement.

    If they don't threaten not to settle.

    Technically, you are not supposed to hold up settlement, you are only supposed to retain funds in case of a problem, but many solicitors are unsure of this, and if you threaten not to settle, by the time the solicitors have worked it out it will be well and truly monday.

    Also, the only penalty you can get for not settling is having to pay interest on the outstanding funds, however for this to occur you have to be 14 days past the stated settlement date and have to be issued notice. So, monday is nooooo problem.

    hope this helps (usual disclaimers apply)

    asy :D
     
    Last edited: 24th Oct, 2002
  3. Lotana

    Lotana Member

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    Lissy,

    In addition to Asy's wise comments, I'd like to say that agreeing to the condition like this is an absolute no-no. When I was buying my house (4 years ago - I was young and stupid then), I agreed to get a possession on Sunday, 2 days after the settlement (the vendors were moving out on Saturday). At the final inspection n Friday morning everything looked fine, but when we came on Sunday and the were no furniture we found rotten carpet, raising damp, as well as the most uninspiring thing - a lot of plants were removed from the gardens.

    That was a good lesson though.

    Say cheese :p

    Lotana
     
  4. asy

    asy Member

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    Unfortunately, Lotana, in this case, even if you had seen these problems you would have still had to settle.

    The carpet and rising damp were, in all likelyhood there when you signed for the property, and therefore you purchased it in that condition.

    The garden, on the other hand, is something you could have done something about. Although this will not have been a grounds for delaying settlement you could have retained frunds at settlement to compensate for these plants.

    hope this helps,

    asy :D
     
  5. Lotana

    Lotana Member

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    Thanks Asy, I've learnt something new.

    Say cheese :p

    Lotana
     
  6. Lissy

    Lissy Member

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    Will be interested to hear what my lawyer says today...
    Will post again when the dust has settled!!
     
  7. handyandy

    handyandy Member

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    Hi Lissy

    I have had this situation a couple of times as the vendor was aware that the property was to be an investement property.

    What I do is sign them up to a residential lease and charge rent. Part of the settlement is then used to establish a bond and pay for 2 months rent which we refund on the unused part on vacancy. By the way the rent is normally 25% above the going rate.

    One tenant stayed for 6 weeks another stayed 4 days neither proved to be a problem.

    Cheers
     
  8. Lissy

    Lissy Member

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    Well, fingers crossed that this will all resolve itself.
    Supposedly the vendor got caught up in the general mess behind a car accident, and was very apologetic when she rang the agent to explain why she hadn't been there.
    And to be fair, when I drove away I did go past a road blocked off by police, which would have led to the road where the accident was supposed to have occurred.
    But more importantly, some keys arrived at the RE agents this morning, so I feel a lot happier now.
     
  9. see_change

    see_change Apprentice Timing Lord

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    We recently delayed settlement on one of our purchses in Q'land .

    The owner was keen to rent it back , for about 70 % of the going commercial rent and when we said no , wasn't happy. We insisted that our representative be able to inspect prior to settlement.

    The vendors lawyer came back saying they had been told by their client that it was vacant. but because the vendor wasn't able /prepare to allow inspection , we delayed for a brief time untill it was inspected.

    see change