To Sue or Not To Sue

[Marina]

Hi All,

We are in a dilemma and not sure what the best thing to do is.

The buyer that was going to buy our PPOR has decided to bow out of the purchase of the house.

The facts are that he only put down a $500 deposit on signing and had a one week finance clause put in.

To date- it has been 3 weeks, he has not paid any further monies and has just now said that he will not be going ahead with the purchase as finance could not be approved.

Its funny though , that for 3 weeks the realestate agents were saying finance was approved and he will pay the money next week. They gave me this story 3 times.

So now I have been told by realestate agent and my conveyancer I can sue for the 10% balance.

What do I do? Do I sue or do I not sue?

I ask this question because I am worried about what the consequences to my actions could be?
Would it be a messy, stressful and expensive procedure.?

Any advice would be appreciated.

Marina.

 

[ocean view]

To sue?

Marina

My advice is see a legal solicitor! He or she will proberly put it to bed. Being in VIC I an not sure of the ruling. In NSW the case would need some more bite on your side such as loss of assets or income caused by the Buyer. But you are in the right. If the Buyer did let his week clause expire he is legaly liable. However this word does sometimes bring you rain!!

Get the advice from some firm that handles these type of cases.
80% of times it never goes any further than keeping the $500.00
It all depends on your will & pocket.

cheers Bribi

 

[Sim]

Yes, please get some legal advice - these issues are not unknown - real estate contracts are very much a known quantity.

A solicitor will be able to explain exactly what recourse you have and whether it is worthwhile pursuing.

 

[asy]

Hi Marina...

There are two things here you should know and one that you should definately do...

The one thing you should definatley do is get a solicitor if you want to go further. And you have the right to go further.

The two things you should know are:

1: You are entitled to not only 10% of the purchase price, BUT the difference between what you sold the property to them for, and what you subsequently sell the property for. That means, if you had a purchase price on your contract for $200k and you subsequently sell the property for $180k, you are entitled to 10% (20k) PLUS the difference between the two prices (20k). that's 40k (FOURTY THOUSAND DOLLARS) total.
(But the second contract has to be legitimate otherwise they will countersue... so no silly $10k contracts, please!!)

and

2: If they backed out under the finance clause and had not payed the deposit by the due date they are in default of the contract. There is a little known clause in the contract (I assume you used a standard contract) that says that if you are in default under ANY clause in the contract you can't back out using the finance clause. (By the way, I'd like to go on record saying that I think this clause is STUPID... but it's there...).
What this means is that say your contract gives the purchaser 3 days to pay the 10% finance, and 7 days to back out under the finance clause... If the finance is not payed on day 3, you can't use the finance clause to back out of the conatract.. and no, I'm not kidding.
(Note to all... ALWAYS make the deposit payable AFTER the finance clause becomes due. AND if you get an extension on the finance clause, MAKE SURE you also get an extension on the deposit!!!)

So...

That's your legal position, as I see it. REMEMBER USUAL DISCLAIMER APPLIES... I AM NOT A SOLICITOR... Just an agent who listened in class


Having said that, it's usually not worth the time or the effort to sue. I guess you need to look at why they really backed out. Were they trying hard to get finance and are just as disappointed as you?

I would, however, have a good talk to your agent and find out why they didn't have a better finger on the pulse... But they may have believed that the purchasers were telling the truth.

Let us know how it goes, and don't hesitate to ask more questions if this hasn't helped...

hope it has!

asy

 

[XBenX]

Marina - Easy soln Ill buy your property for $1 - and meet your legal costs to get the diff

 

[asy]

Originally posted by XBenX
Marina - Easy soln Ill buy your property for $1 - and meet your legal costs to get the diff

"But the second contract has to be legitimate otherwise they will countersue... so no silly $10k contracts, please!!"

Um, this would include even sillier $1 contracts!!! hehe

asy

 

[XBenX]

that would be what the emoticon is for

so that other ppl know you arent serious

 

[asy]

that would also be what the "hehe" was for...

hehe



asy

 

[XBenX]

my mistake

it just seemed like a rebuttal

 

[Sim]

Originally posted by XBenX
it just seemed like a rebuttal

re-buttal - is that like dropping your dacks, again ?

 

[XBenX]

nope, that would be rebutting

 

[NigelW]

Re: To sue?

Originally posted by ocean view
Marina

My advice is see a legal solicitor!

cheers Bribi

As opposed to those horrible "illegal" ones

Sorry didn't mean to pick!

When it gets to suing, nobody wins except the lawyers.

In any event, at this stage who knows whether you'll be able to sell it for even more down the track?

Why don't you try to talk to the buyers in a friendly way and find out why it is they are not willing to settle. Perhaps there is a win-win solution out there somewhere.

if that doesn't work then call in your trained attack dog (er lawyer) and put the buyers on notice that you're going sue to recover any loss you suffered and go through the relevant termination procedures applicable for your contract.

Whether you do in fact sue is another matter entirely. it may just end up costing you money...and lots of it. Not much point spending 20K to recover $10K... hmm?

 

[Sim]

Originally posted by XBenX
nope, that would be rebutting

Actually - rebutting is the verb, rebuttal would be the noun. "I am doing a rebuttal", like, "I am going for a jog" are nouns, where "I am rebutting", or, "I am jogging" are verbs.

Rebuttal: the act of dropping your pants.

Rebutting: actually dropping your pants.

 

[Donna L]

I'm confused. What did he sign? Do you mean you exchanged contracts on $500 or he gave you a five hundred dollar goodwill deposit and had a contract drawn up with a "subject to finance" clause? If it was a formal contract, why would you exchange until he gave you 10%? It depends on the wording of the contract. If he gave you $500 goodwill to give him a week to come up with the 10% deposit for the finance then you should have had the property back on the market after the week. Can you clarify?

 

[Marina]

Re: Re: To sue?

Originally posted by NigelW
[
"Why don't you try to talk to the buyers in a friendly way and find out why it is they are not willing to settle. Perhaps there is a win-win solution out there somewhere."

We have talked and their English is very bad. All they said was NO MONEY, NO FINANCE.
Their so called Solicitor on the contract apparantely is not their solicitor, and never was. They have no legal representation whatsoever.
To date they still have not made contact with our realestate agent or anyone. Everything is up in the air.
From what we have assessed they are new to the country, live in a rundown shack- hence no money and no idea!!!!!

For us to sue it will cost 10K, maybe more to get 20K.
If they have no money or assets then we are stuck with the costs.
We are not willing to take this risk.
We are innocent is all this and yet in fact it could actually cost us big dollars if we lose the case.

SO MUCH FOR FAIRNESS.

Somehow I just do not think it is worth the STRESS


Thanks
Marina.

 

[Marina]

Originally posted by Donna L

HI Donna,

"I'm confused. What did he sign? Do you mean you exchanged contracts on $500 or he gave you a five hundred dollar goodwill deposit and had a contract drawn up with a "subject to finance" clause? If it was a formal contract, why would you exchange until he gave you 10%? It depends on the wording of the contract. If he gave you $500 goodwill to give him a week to come up with the 10% deposit for the finance then you should have had the property back on the market after the week. Can you clarify?

"

He signed the contract of sale and paid $500. This $500 makes up a portion of the 10% deposit. He should have paid the balance of 10% within 7 days.
When the finance clause had expired, the realestate agents kept telling us he was going to come in next week to pay the balance, but next week never came. It has now been 3 weeks.

It didn't have anything to do with goodwill.

Thanks
Marina.

 

[NigelW]

Re: Re: Re: To sue?

Originally posted by Marina

We have talked and their English is very bad. All they said was NO MONEY, NO FINANCE.
Their so called Solicitor on the contract apparantely is not their solicitor, and never was. They have no legal representation whatsoever.
To date they still have not made contact with our realestate agent or anyone. Everything is up in the air.
From what we have assessed they are new to the country, live in a rundown shack- hence no money and no idea!!!!!

For us to sue it will cost 10K, maybe more to get 20K.
If they have no money or assets then we are stuck with the costs.
We are not willing to take this risk.
We are innocent is all this and yet in fact it could actually cost us big dollars if we lose the case.

SO MUCH FOR FAIRNESS.

Somehow I just do not think it is worth the STRESS


Thanks
Marina.

Sadly life is not always fair. You've hit the nail right on the head when you say it's not worth the stress. At the risk of delving into the metaphysical for a moment, it's usually better to just let it go, forget about it, bend like the willow etc etc and just apply your energies to new and exciting projects rather than spend new money chasing after old money with a VERY unlikely outcome of you actually getting anything out of them by the sound.

Better to let it go than be vindicated but impoverished

Think of all the time you'd waste suing. If you spend that time productively in investing activities I'm sure you'll make heaps more than putting these buyers through the ringer (even if they deserve it)...

Good Luck with it all.
N.

 

[asy]

Marina,

For what it's worth, I agree with Nigel.

Please remember my initial post gave you the legalities of it...

But the practicality is that it doesn't really get you much beyond ulcers and a very close relationship with a solicitor.

Good luck with re-selling it, and let us know what you decide.

asy

 

[Savanna100]

whether to sue?

Hi,

If these people really appear to not understand what they signed and are now not going ahead with it, if sued they may be able to claim "non est factum" (translated as "not my deed")

This means that they may be able to claim that they did not know what they were signing (on the basis of poor english etc).

The relevant (main) case law is
Amadio v CBC

You can find it under high court cases

www.austlii.edu.au

(Austlii is a very good resouce for legislation and case law.)

I feel that in this situation, a court would probably favour these people as being unable to understand what it is they were doing and on this basis, release them from any contractual obligation.

Still, I'm not a contracts lawyer (I was a environmental lawyer)

good luck with it !

Savanna

 

[XBenX]

are you saying my i can use engrish to get out of contracts ?

j/k's no need for a serious answer