Sold the wrong property by mistake

[Sootygirl]

Hi all, my girlfriend has a dilema, and I was wondering if anyone has come across something similar and if so, what advise could you give.

My friend bought a house in Queensland about a year ago, which she is renting out. She lives in NSW. The vendor had subdivided the property into 2 blocks, both with a house on. Her purchase had a small fibro cottage and the other block {which the owners kept} had a brick house. 'Her' block is a bit bigger but the other property is worth about $50,000 more with the much better house on it.
All was going well until this week when she recieved a letter from the vendors solicitor, saying that there was a problem and that she is in possession of the wrong property {or words to that affect}.
The property she bought {or thought she did} was block eg 561 and the next door block was 571. She even showed me the printout {which she'd kept} from the realestate website, with a pic of the fibro house and block 561 printed underneath it.
The vendors recently decided to put block 2 up for sale and thats when the 'mistake' was discovered. As she dealt with a queensland solicitor for the purchase, she is going to see a local solicitor this week to try and sort it out. She is concerned this mess will cost her money!
It appears that someone st*ffed up badly and assigned the wrong block number to the house she thought she was buying. She is the owner of block 561 which isnt the house she meant to buy or the venors meant to sell. She is stressing over this..... understandably.

 

[yadreamin]

Interesting situation to say the least.
So is your friend renting out a house she doesnt own?Paying rates on a property she doesnt own? Paying a loan on the wrong property?
WOW a big learning curve to say the least.
I would take a quess and say it has to go back to the solicitor that handled the sale. I mean isnt this the reason she employed them to start with.You know to make sure all i s were dotted and all t s were crossed and that she was getting what she was signing for?????????
I also would say the Bank may have an interest in the situation.
Hope it gets sorted without too much pain.
Please keep us informed.
cheers yadreamin

 

[Kristine..]

G'Day

Actually, if you read the instructions given to you by your solicitor / conveyancer (in Victoria) it specifically tells you that it is your responsibility to confirm that the land you think you are buying is the land you are buying.

Table A of the Sale of Land Act has some directives in this matter, and after acceptance of title and the taking of possession, there can be no further claims regarding eg misalignment of common boundaries, that the land was too big or too small, or even that you got the wrong block!

Caveat Emptor really does put the responsibility back on to the buyer.

Provided that the purchaser had sufficient opportunity to inspect the land - and living in one state while buying in another is no excuse not to inspect - then even the Estate Agent who probably made an 'honest mistake' would be exonerated (and so would their insurance company).

If there was no intend to defraud and the buyer did not validate the title, then a happy outcome will depend almost entirely on the goodwill between the parties as to how they sort it out and agree to pay the necessary costs.

It will be interesting to hear how this is resolved - perhaps your friend is destined to buy both? That would be an ideal way of sorting out an obviously distressing problem.

Good luck!

Kristine

 

[asy]

I can pretty much assure you, the vendors are stressing more than she is.

There's a little thing called Immediate Indefeasibility of title in Australia, which means if she is registered on the title, through no fraud or deception on her part, then she's the true and rightful owner of the property.

Now, since the other property is worth 50k more, she's within her rights (legally, but probably not morally) to say "Too bad, move out of my house!"

I don't suggest this, coz it's just wrong, but, I'm saying it so you can see she definately has the upper hand where bargaining is concerned.

She should go and see her solicitor, if she doesn't have one, PM me and I'll give her my solicitor's details, he's a property law specialist and bloody brilliant (also not exxy!).

She should, through the solicitor, tell the vendors she's prepared to co-operate and do a straight swap of the titles, which shouldn't cost them any stams, I wouldn't think, if explained properly to the OSR, so long as the vendors cover ALL costs, including her solicitor's fees.

It's really not a big problem. If it was the other way around and she had title to the lesser valued property, maybe then I'd have been a little softer toward the vendors, but in this case, she really does have the ace up her sleeve.

Be nice, but firm. and preferably through a solicitor.

asy

 

[Brenda Irwin]

A timely warning to all buyers: Always check the solicitors searches.

My solicitor obtains a map from the council and highlights the property being purchased. It is up to us to make sure it is the correct one.

Was it the 2nd house from the corner or the third? We make sure it is the right house.

 

[chook]

I know that we employ solicitors to look out for any problems on our behalf but I have a doubting nature so I check all the paperwork myself and on two occasions I have been handed transfers to sign with the wrong lot numbers on it. I have checked the survey and deposited plans and picked up the mistakes and had them corrected before any harm was done. These were two totally unrelated matters but both were cases where a block had been subdivided and I bought the subdivided section. These documents had been run past both parties' solicitors and neither of them picked it up. You just have to check everything yourself.

 

[lizzie]

i like the idea of here buying both - can she?

also a good lesson to always get a survey done when buying ... it definately worth the $400 when considering all the problems that could otherwise arise.

 

[Sootygirl]

Thankyou all for your replys. I shall pass them on to her. My friend is in her 50's and this is her first ever property purchase. She has payed rates and spent money on some maintainance etc for the past year. She went to Rockhampton to inspect and buy the property and engaged a solicitor to handle the sale while up there. Among the papers re the purchase that she showed me, was a map with block 561 highlighted but since the street is fairly long with the blocks being similar, she would have assumed the block highlighted was the one she had inspected. Her solicitor, without having physically seen the block, would have assumed the same I would think.

I agree, that the vendor would be stressing more than my friend and that they would have a few questions for their own solicitor!

I imagine this will have been a costly error for the vendor, with solicitors, tranfer of title etc. I am sure that my friend will do the moral thing, as long as she's not out of pocket through no fault of her own.
She is seeing a local solictor and I will keep you informed as to the outcome.

This experience of hers will make my examine the paperwork more closely, if and when I purchase or sell another property.

 

[Sootygirl]

Lizzy, I have always assumed that a survey was part of the costs, when paying the solicitor. I will ask her if one was done, although even if it was, I dont know that it would have changed anything, {unless of course, a description of the dwelling on the block was included in the survey in which case eyebrows should have been raised}
Unfortunately she is in no position to buy the other block. She doesnt even own her own residence {she rents}, and at her age and income another mortgage is not an option.

 

[depreciator]

She has payed rates and spent money on some maintainance etc for the past year.

I'm sure it will all be worked out with a minimum of fuss. Your friend would have been paying rates on one property anyway.
The vendor would know by now that they're in a bit of a spot.
Unless she wants to get nasty, your friend could just tell the vendor that the transfer can happen provided they pay all costs and she is reimbursed for money spent on maintenance.

 

[skater]

She has payed rates and spent money on some maintainance etc for the past year.

If the property was bought a year ago, might it be too late to do anything about it, & why did it take the vendor so long to realise the mistake?

 

[Bargain Hunter]

If the property was bought a year ago, might it be too late to do anything about it, & why did it take the vendor so long to realise the mistake?

If they didn't want to sell at this stage, it might have been another twenty years before the mistake was picked up.

It will be interesting to see how the OSR see the issue. They could claim that both properties are changing hands and charge stamp duty on both, that plus the legals

The mistake occured because the vendor or their solicitor supplied the incorrect information for the contract of sale. Your friend or her solicitor should have picked up the error and at the end of the day it is your friends error in signing the document that has resulted in the final problem.

It's a moral dilema. As your friend has title she can keep the property, however I assume from your note that she wants to do the right thing (and avoid a TV debut with A Current Affair).

In this case there are a few options:

1. Pay all costs to rectify
2. Have the other party pay all costs to rectify
3. Split the costs to rectify
4. Agree to pay a maximum amount towards rectifying the problem (based on %) allowing her to know her worse case costs.
5. Retain the property and pay an agreed difference in price
6. Buy the second property


Regards

Andrew

 

[Sootygirl]

Hi all, just an update on this saga so far.
This still hasnt been resolved. My friend has spent much of her time, chasing up relevent documents. The solicitor down here {in NSW} that she engaged to sort out this mess, told her that "there isnt a court in the land that would take the property off her". {the one that she inadvertantly has title to} but that it comes down to being a moral issue. She wants to do the right thing but her patience is being tested to its limit.
She has had no direct contact with the vendors or their solicitors {they wont return calls} and she feels she is being treated with contempt. The 'issue' that the vendor solicitors are most concerned with is ''who is responsible for this b*lls up and how did it happen". My friend doesnt care 'how it happened'...she just wants it fixed!
This has now dragged on for weeks and my friends free time is taken up with phone calls, chasing up info, photocopying, stessing. As of yesterday, she told me she is hoping to get it sorted with a cost of only $200 to her but due to the lack of contact, understanding and help from the vendor end, she is close to telling them to to take a jump....the property is now hers.
My advice to her, was that $200 out of her pocket is $200 too much.

 

[Macca]

Hi Sooty,

Kind of weird isn't....they are the ones with the problem but expect her to fix it.

Maybe she could have her local solicitor write them a letter explaining the facts of life to them

Put a time limit it on it that has legal standing and give them notice to vacate "her house".

Hopefully that will get them off there butts

 

[grossreal]

hi
very interesting post,in nsw you do need to get a 149 certificate and you need to check it I do.
but with regards to your friend she has two problems that I see
one is here lender and this to me is her biggest problem they have no security as she has signed up for a loan on aproperty that she doesn't own and they would have a problem with there legals that they didn't pick this up.
the other is the vendor.
if they are not returning calls you need to start to play hard ball.
first a letter from her solicitor saying if you don't give us your plan of rectifying this problem we will and we will ask that the properties are changed over to your friend at the 50k higher value and your solicitor will be chasing them for the cost to do so as it was this ladys problem and that if they don't hear wityhing 5 business days they will inform the lender and the lender will organise via there legal team to do so as they are the once holding no security and once this is done there is no changing back.
if you put the wind up you will get returned phone calls for me its is not her job to be chasing.
the devil is always in the detail and I did post some where that I take up to 3hrs checking contracts that I am told are standard for these types of problems.
I must admit I have never bought someone elses house.
but for me its the vendors that have the problem and I wouldn'd ring them I would email or fax so you have a record and if they don't respond take the higher valued house and then lets see them respond.

 

[JAL]

Just the way my mind works, but I would immediatly insure the house that she actually (now) owns, as well as the one she thought she owned.
As least until all this is sorted out.
Worst case at the moment, the house your friend really owns is distroyed (say by fire) she has no insurance cover but still has a mortgage.