Vendor not returning interest on off the plan rescind contract

[andy4a55]

Hi all,

This is my first post, please bare with me.

I paid 10% advance for 1bed unit in Annandale (1-13 Parramatta Rd Annandale, NSW). The property was worth 475K so I put advance on 47,500.00. I exchanged contract in July 2010 and sunset date was June 2014. The builder started digging in mid 2012 then after few weeks stopped (I don't know the reason).

I have been kept contacting my solicitor and vendor's solicitor, no information was given to me until may 2014. My solicitor informed me that vendor is not building anymore and take your money back without interest.

My contract shows that my money to be kept in Vendor solicitor account and should be invested. I got a phone call in June 2014 from the Property agent, Steve Kremisis R&W Newtown (the agent was the one who sold off the plan), that your money is with me and you can take 46,500.00 (1,000 less then the amount I paid). I asked him what about my rest of the money and interest for the last four years (about 15,000), he denied to pay me the interest. After so many threats to go to the court and showing him the proof, agent returned me 1,000.00. He is not returning my interest, and I am looking for the legal action.

Please experts advise me the following:

1) Why my money was kept with the Property agent not in the solicitor's trust account? My contract clearly shows that it should be kept in solicitor's trust account. I have given my TFN number and received a fax from vendor solicitor that your money is invested.

2)Why they kept me without informing anything until sunset date when I asked so many times? If Builder was unable to continue the work vendor should have informed and returned money.

3) What are my rights to bring vendor to the court and get my interest back?

3) how much will be legal fee for the court and Lawyer? I asked my solicitor, he is asking about 6-10K fees to submit the court case, winning not guarantee.

4) Is there anything else I can do to get my interest back?

Can someone advise me in my distress situation? Also please advise me a lawyer who can charge me low fee and help return my money.

Thank you for reading the post,

Andy

 

[pinkboy]

You got your money back.

You won.

Walk away and go out and find something else to sink your cash into.

pinkboy

 

[wylie]

My contract shows that my money to be kept in Vendor solicitor account and should be invested. I got a phone call in June 2014 from the Property agent, Steve Kremisis R&W Newtown (the agent was the one who sold off the plan), that your money is with me and you can take 46,500.00 (1,000 less then the amount I paid). I asked him what about my rest of the money and interest for the last four years (about 15,000), he denied to pay me the interest. After so many threats to go to the court and showing him the proof, agent returned me 1,000.00. He is not returning my interest, and I am looking for the legal action.

How can interest on $46,500 for four years come to $15,000?

I don't know the answer to your question, but why not call whoever looks after these things (Fair Trading?) and see what you can do next. If it was held in a trust account perhaps you don't get any interest. If you have written proof that it was invested, that should help your case.

Good luck.

 

[DaveM]

Trust accounts are not interest bearing. Unless you opted to invest the deposit, you wont receive interest on the amount.

 

[Perp]

Trust accounts are not interest bearing. Unless you opted to invest the deposit, you wont receive interest on the amount.

Andy said that he:

received a fax from vendor solicitor that your money is invested

 

[andy4a55]

How can interest on $46,500 for four years come to $15,000?

Hi Wylie,

8% interest on $47,500 will be around somewhere.

 

[andy4a55]

Thank you everyone for the suggestion.

My question is, why builders go without any question asked in this type of cases?

I have a feeling why vendor stopped building the units there. As per today price one bed unit in Annandale is about 650K, he was sold most of the properties for low price. He is thinking if he builds now and gives to old price, going to loose lot of money. He might have submitted another plan to council.

I am not finding the other buyers who bought the units there. If we go with others to court, we might win and get compensation. But at this moment I am alone.

 

[NedKelly]

What exactly did the fax from the vendors solicitor say?

 

[landlubber]

Hi Wylie,

8% interest on $47,500 will be around somewhere.

8% interest ? on cash in the bank ? Over the last four years ? Where exactly ? I reckon more like 3% average max. 3% compound for four years equates to about $53.5K. Which means you're chasing about $6K. Take it from me, when it comes to lawyers and court actions $6K is nothing. Totally nothing.

What has happened to you is one of the risks of buying OTP. If the market really moves UP the builder stops the project and let's the sunset clause terminate the contracts. Just think .... if you'd bought an established property using that $47.5K as deposit the ca $150 - 200K capital gain would be in your pocket !!! Don't buy off the plan. The risks are many and substantial. LL

 

[Terry_w]

Hi all,

This is my first post, please bare with me.

I paid 10% advance for 1bed unit in Annandale (1-13 Parramatta Rd Annandale, NSW). The property was worth 475K so I put advance on 47,500.00. I exchanged contract in July 2010 and sunset date was June 2014. The builder started digging in mid 2012 then after few weeks stopped (I don't know the reason).

I have been kept contacting my solicitor and vendor's solicitor, no information was given to me until may 2014. My solicitor informed me that vendor is not building anymore and take your money back without interest.

My contract shows that my money to be kept in Vendor solicitor account and should be invested. I got a phone call in June 2014 from the Property agent, Steve Kremisis R&W Newtown (the agent was the one who sold off the plan), that your money is with me and you can take 46,500.00 (1,000 less then the amount I paid). I asked him what about my rest of the money and interest for the last four years (about 15,000), he denied to pay me the interest. After so many threats to go to the court and showing him the proof, agent returned me 1,000.00. He is not returning my interest, and I am looking for the legal action.

Please experts advise me the following:

1) Why my money was kept with the Property agent not in the solicitor's trust account? My contract clearly shows that it should be kept in solicitor's trust account. I have given my TFN number and received a fax from vendor solicitor that your money is invested.

2)Why they kept me without informing anything until sunset date when I asked so many times? If Builder was unable to continue the work vendor should have informed and returned money.

3) What are my rights to bring vendor to the court and get my interest back?

3) how much will be legal fee for the court and Lawyer? I asked my solicitor, he is asking about 6-10K fees to submit the court case, winning not guarantee.

4) Is there anything else I can do to get my interest back?

Can someone advise me in my distress situation? Also please advise me a lawyer who can charge me low fee and help return my money.

Thank you for reading the post,

Andy

1. Who did you pay the deposit to? What did the contract say?
2. Did they agree to provide you with updates?
3. Legal fees will be large and there is a risk you will not win and have to pay the other side's legal fees. You will be looking at around $400 per hour for a lawyer to look over contracts, assess the merits, write letters, prepare statement of claim, attend court etc.
4. Ask/threaten legal action/sue.

 

[Terry_w]

Thank you everyone for the suggestion.

My question is, why builders go without any question asked in this type of cases?

I have a feeling why vendor stopped building the units there. As per today price one bed unit in Annandale is about 650K, he was sold most of the properties for low price. He is thinking if he builds now and gives to old price, going to loose lot of money. He might have submitted another plan to council.

I am not finding the other buyers who bought the units there. If we go with others to court, we might win and get compensation. But at this moment I am alone.

No doubt this is what the builder has probably done - delayed things so he can rescind the contract. He will now sell at a much higher price. Your contracts and the others probably helped him get finance for the project.

 

[D.T.]

There is off the plan failed ventures posted on here on a weekly basis. Just be glad you got your deposit back as thats far more than many get.

I'd leave it at that. Sure it might be upsetting or annoying or frustrating, but preserving of capital is half the battle. You've won that one.

Go find a new investment, preferably after doing more looking & asking this time around.

 

[Scott No Mates]

No doubt this is what the builder has probably done - delayed things so he can rescind the contract. He will now sell at a much higher price. Your contracts and the others probably helped him get finance for the project.

Terry, in this day and age, are there still unethical builders/developers around?

Break ground/ get substantial commencement so that the DA doesn't lapse, then pull up stumps.

How about the poor REA who has to go round and earn a second round of commission (possibly got paid as initial buyers entered into contracts.

 

[andy4a55]

1. Who did you pay the deposit to? What did the contract say?
2. Did they agree to provide you with updates?
3. Legal fees will be large and there is a risk you will not win and have to pay the other side's legal fees. You will be looking at around $400 per hour for a lawyer to look over contracts, assess the merits, write letters, prepare statement of claim, attend court etc.
4. Ask/threaten legal action/sue.

Hi terry,
1)I made bank cheque $46,500 in favour of Consolidated Lawyers ( Vendor's solicitor) and paid $1000 cash in advance for booking.
2) They didn't agree to provide any update, but I paid my solicitor to get all details.

Andy

 

[andy4a55]

What exactly did the fax from the vendors solicitor say?

My contract was exchanged on 8/7/2010 and Vendor solicitor has faxed a letter on 13/7/2010 to the Agent (who held my money for four years) that this deposit to be invested. I have the fax with me.

Andy

 

[andy4a55]

There is off the plan failed ventures posted on here on a weekly basis. Just be glad you got your deposit back as thats far more than many get.

I'd leave it at that. Sure it might be upsetting or annoying or frustrating, but preserving of capital is half the battle. You've won that one.

Go find a new investment, preferably after doing more looking & asking this time around.

Thank you for the suggestion.
I am not going to buy off the plan anymore. Better you buy what you see than just waste money in off the plan.

Cheers