Who is entitled to the interest earned on property deposits?

[westminster]

Well what do you know - so it is Maybe I should have read that....

Yes because you just signed to say you received it and understood it on a contract,

 

[BLTN]

Yes because you just signed to say you received it and understood it on a contract,

But it's 20 pages of size 6 font...

And I have so much other reading to do

It actually has some pretty interesting stuff in it though - it answers all my other questions about prior possession as well (that came up with Rocko) as well as listing the interest rate applied to delayed settlements (9%)

 

[Perp]

It actually has some pretty interesting stuff in it though

Who'd've thunk?

 

[Peterw]

An interesting trap/loophole that I discovered is that in Queensland, the real estate agent isn't obliged to release the deposit at settlement, but has up to 14 days from settlement to hand over the funds to the seller.

So let's say the deposit was $20K on a $200K purchase, we had a situation where the seller wasn't going to hand over title at settlement until they had all their $200K, and the real estate agent said they wouldn't release the $20K deposit in their trust fund at settlement, but would hand it over in 14 days.

Our lender, in order to secure the title, handed over $200K rather than $180K at settlement, then sent us a letter claiming we'd overdrawn our loan by $20K and insisting we take drastic and immediate action to get the real estate agent to hand over the deposit, and advising that they were charging us some outrageous overlimit fees every day that they didn't have the $20K.

I got the letter in my hospital bed, a few days after my twins had been born nearly 10 weeks premature by emergency C-section, so to this day I'm not sure why this all created such a kerfuffle, because apparently the 14 days to release the deposit is standard by legislation, and presumably the lender does settlements every day, and I've never had another one go wrong... but all these years later, I'm curious to know what this was about. Can anybody enlighten me?

Perp, sorry to hear how the birth went. Hope all is good now. I am intrigued by the actions, of the seller. All the buyer had to do, was show a cheque for the $180K, and the sellers agents trust account receipt for the $20K, so there is the $200K. I would have thought they would/could have been penalised for not settling. Some times where our sale is in a "train" we have been asked to provide a bank cheque for the balance of deposit, to be made available at settlement. Its a bit of a chore, as we are often advised late, and we have to get a courier involved. While the act does allow us 14 days, why would you want to annoy your client by holding out, does not make sense.

 

[Perp]

Perp, sorry to hear how the birth went. Hope all is good now.

I should have said this was 13 years ago. We're home now!

I am intrigued by the actions, of the seller. All the buyer had to do, was show a cheque for the $180K, and the sellers agents trust account receipt for the $20K, so there is the $200K. I would have thought they would/could have been penalised for not settling. Some times where our sale is in a "train" we have been asked to provide a bank cheque for the balance of deposit, to be made available at settlement. Its a bit of a chore, as we are often advised late, and we have to get a courier involved. While the act does allow us 14 days, why would you want to annoy your client by holding out, does not make sense.

I assume this situation must come up all the time, so I wondered how it was usually handled - by the sounds of it, the seller must not have been happy with the agent's $20K trust account receipt.

I was actually in surgery during settlement, I think, so all the kerfuffle happened without us knowing until the next day; perhaps this seemed like the best resolution to the relevant parties, in a situation where we were rather difficult to contact. Our lawyer did tell us when we discovered - which was when we got the letter from the lender - that the lender had done nothing wrong, and it was our fault for not including a clause in the contract that the agency was required to make the deposit available at settlement. (We paid him for pre-contractual advice; why didn't he tell us that we should have put that in, then? Also, how could we impose an obligation on the real estate agent when they're not a party to the contract? )

The Principal at the real estate agency was a horrid woman and her agency went bankrupt soon after. When I went in to see her - barely able to walk and on a two-hour leave from hospital - and explained that I was very stressed about the situation with the settlement shortfall, she yelled at me in the foyer of her premises and started throwing $5 notes at me from the petty cash box. It was bizarre. Her staff came and visited me back in hospital a couple of hours later with flowers. The selling agent resigned that day, as a result of the incident.

 

[Peterw]

I should have said this was 13 years ago. We're home now!

Glad to hear it. What I forgot to mention, the seller does not get the deposit. They get the balance after commission and marketing fees, which the agent has a right to deduct after settlement, and prior to distribution to the seller.

Never mind its a long time ago.