Sunset Clause & deposit bond

[Darwinite]

Hi,

We have purchased a unit off the plan in Darwin 8 months ago with a bank guarantee (deposit bond). The sunset clause was the 30 June 2009. The construction has been completed but title has not been issued due to council clearance hold ups. The vendor are wanting to extend the sunset clause to the end of October 2009. Our deposit bond was only for six months so our conveyancer has advised it has expired and we need to get it extended. When i went to the Commonwealth Bank they advised they can't extend a deposit bond and they had never heard of a sunset clause being extended. Our only option is to fork out the deposit ourselves or resign the contract and pay for another deposit bond. This doesn't seem fair to us, as the vendor has broken the contract and are requiring us to pay more money for a new deposit bond. When i went back to the conveyancer yesterday she said that sunset clauses get extended all the time as well as deposit bonds. The conveyancer was going to get back to me yesterday after speaking with the bank, but no phone call.

After waiting for 8 months, and having already achieved capital gains on the property we don't want to see this fall through.

Has anyone heard of this happening before? Any advise would be appreciated.

Cheers

Pip

 

[Propertunity]

After waiting for 8 months, and having already achieved capital gains on the property we don't want to see this fall through.
Has anyone heard of this happening before?

Yes Pip,

This has happened plenty of times before. USUALLY a developer in your case would use the sunset clause to collapse the contract and then sell to you or someone else at the now seemingly achieveable, higher price.

Since the vendor in this case wants an extension, you are in a very happy position. Give it to them - especially since you are locking in known CG! I would not get too excited about the DB expiring - you've used it for 8 months - either get it extended, get another one or put some cash down. You will need to do the latter for settlement in any case I'd assume?

 

[Darwinite]

Ok that has reassured me. Will get onto the bank on Monday. Thanks for that!

 

[aw1]

Did you write into the paper about this the other day? Saw a mention of something very similar in the letters section of the NT News.

Wasn't a villa in Durack was it?

 

[Darwinite]

Hi Aw1

No its not Durack and we didn't write into the paper about it. But would be interested in reading it, might head to the library.

We weren't able to extend the deposit bond, so we offered to put a cash deposit down. The vendors conveyancer never got back to us, but in the mean time title has been issued and we are preparing to settle with no deposit. Hopefully we won't have any problems.