Urgent! Can I pull out if I haven't signed BC disclosure?

[marmalade]

Help!
I signed a contract, the sellers have signed and I sighted a Body Corp disclosure statement from last year. The REA said it would take a few days to get a new one made up but I can still make a written offer etc.

In the new one the BC costs are HEAPS higher, which means the prop is not a good investment!! Is there any way I can get out of this without losing 2.5% from cooling off period? Can I get out of it because I haven't signed the BC disclosure? Or could I wait and hope to get out on finance or building inspection? This would feel a bit wrong, but I kind of feel I have been wronged here too.

Now I know why the prop was under contract twice and both times it 'crashed'.

 

[luckyone]

How much higher are we talking here? 100's of dollars per year, or 1000's?

 

[marmalade]

It went from $1900 to $2800, for a townhouse.
Purchase price was 195k, currently renting at 240/wk.

 

[Lil Skater]

Luckyone, i was on the same path there.

Also, you may find that the body corp fees are a once off due to something big they've done to the place recently. So even if it is say $5k this year it may only be $900 usually, but as Luckyone said, what sort of figures are we looking at? And is it *really* enough to make the investment redundant?

It went from $1900 to $2800, for a townhouse.
Purchase price was 195k, currently renting at 240/wk.

Got in just before me, okay so we're looking at $3k basically. It's not *that* much money, perhaps go back and crunch your numbers because $900 doesn't make a lot of difference - especially over the span of a year, the way i see it is if $900 is enough to make you get cold feet perhaps it's not such a good investment in the first place.

I take it you haven't taken into account repairs/bad tenants etc. Because these can EASILY be $3k per year themselves.

So go back, run the numbers, take into account repairs, unpaid rent, enquire to whether the extra $900 is an ongoing fee or if it's a once off, tax benefits, etc. and base your decision around that rather than the BC fees.

 

[luckyone]

It went from $1900 to $2800, for a townhouse.
Purchase price was 195k, currently renting at 240/wk.

That is a significant jump in fees. I'd be questioning why the high jump. Are there lifts, or a pool in the complex? Does the carpark leak (assuming it's underground)?

The carpark leaked some sort of caustic substance in our basement of our first IP which caused serious damage to the paint on some of the cars parked in the basement at the time. Not only did the body corporate have to pay for the respray of the affected cars, but also the cost of repairing the basement, which cost tens of thousands of dollars. It was huge!

 

[marmalade]

Yes, maybe it's not really as bad as I thought (I hope!). I just noticed there's a 20% discount for paying on time, which makes it a bit better. And if I could just find a reason to bump the rent up an extra $5 a week...

I guess the best person to talk to would be the BC manager, who would be able to explain the big jump. Any other advice on what I should do?

Do you think I would have a chance at a lower price by telling the sellers I'm not happy with the higher BC and will exercise my cooling off rights unless they drop the price to x?

 

[marmalade]

And just out of interest, what would happen if I didn't sign the BC disclosure statement?

 

[Lil Skater]

And if I could just find a reason to bump the rent up an extra $5 a week...

I guess the best person to talk to would be the BC manager, who would be able to explain the big jump. Any other advice on what I should do?

Do you think I would have a chance at a lower price by telling the sellers I'm not happy with the higher BC and will exercise my cooling off rights unless they drop the price to x?

You don't *need* a reason to bump up the rent as such and you'd be surprised what people would pay to get what they want sometimes.

Talk to BC or even the agent (to talk to the vendor) to explain the jump - but as I said, it's really not a big jump so I wouldn't worry even if it was an ongoing thing. Although, if you believe it's not worth it, that's your decision.

It's not the vendors problem the BC went up and it's only $900!!!

Really? I mean $900 is nothing, if the property isn't worth an extra $900 per annum then I'd be of the opinion it's not worth it in the first place.

 

[vbplease]

And just out of interest, what would happen if I didn't sign the BC disclosure statement?

Not much you can do unless the contract is subject to you being satisfied with the BC statement..

20% discount is pretty good for paying the bc fees early

I'd try negotiating a discount on the sale price only if you're not happy with the new numbers.. If that doesn't work and it breaks the deal for you then break the contract due to finance. I assume it's in QLD? In the contract terms and conditions it states finance is to be satisfactory to the buyer.. In a round about way, your argument could be that you can't find statisfactory finance to fund your now more expensive property.. But your solicitor would just instruct the re agent "finance isn't satisfactory to the buyer" or whatever fancy wording they use..

 

[marmalade]

Thanks for the responses, they were really helpful in my hour of panic!

I spoke to my conveyancer today and apparantly because I didn't sign all the necessary forms in the required order I can still pull out at this stage (and not lose money) even though the contract has been signed. The agent didn't provide me with an up to date signed copy of the BC disclosure and this breaches some law and therefore the contract is invalid.
I haven't tested this, but it's certainly interesting to hear!

 

[Perp]

I'm glad you can get out of it if you want to, but I'm with Lil Skater. If the investment is so marginal that $900 per year makes a difference, then I'd be looking for a deal with a lot more fat in it.

 

[marmalade]

Just for the record, I did get my whole deposit back. It wasn't just the figures that made me back out, that was just the tipping point after a few other issues which were niggling away at me.
I've just bought another place nearby, which I feel happy about and I think is a better purchase for me and my current situation. Here's to IP #1!

 

[Lil Skater]

Congrats!!

 

[Bargain Hunter]

Just for the record, I did get my whole deposit back. It wasn't just the figures that made me back out, that was just the tipping point after a few other issues which were niggling away at me.
I've just bought another place nearby, which I feel happy about and I think is a better purchase for me and my current situation. Here's to IP #1!

Well all's well that ends well. Congratulations on your first IP, here's to many more to come.