QLD Termination of Contract of Sale - Who is Responsible?

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kterry

Active Member
27 March 2017
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We are from Sydney, have recently signed a contract of a property in Southport QLD with subject to finance of 14 days and the seller is not willing to refund our deposit.

When we were signing the contract, the agent told us that we have 14 days and we will have all our deposit back if there is any issue with the finance. She filled out Finance amount, date and left Lender section blank of item (10) in the contract.

Our solicitor clearly stated that the contract is subject to finance with certain date and advised us that we can terminate the contract under subject to finance and get full refund of deposit.

Our finance was not enough to purchase the property and have notified to terminate the contract.

The seller's solicitor advised that the contract is not subject to finance as all details in item (10) in the contract is not completed.

Seller then decided to terminate the contract of sale under clause 12.1 of terms and conditions. Seller is willing to take $15,000 of the deposit. The house is already back on the market for sale.

Currently our solicitor is waiting for the seller's solicitor's response.

Can someone please help what further action I can make?

Who is responsible for this case?

Is it the agent who mislead us that the contract is subject to finance?

Is it my solicitor who clearly advised us that the contract is subject to finance?

I would very much appreciate your assistance.
 

Rod

Lawyer
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Too many missing details to comment.

For instance:

Our solicitor clearly stated that the contract is subject to finance with certain date and advised us that we can terminate the contract under subject to finance and get full refund of deposit.

Is this in writing, did your solicitor put the condition into the contract? Do you have any evidence showing the agent said you'd get the full deposit back (eg email, SMS, other ..)?

When did you sign the contract (before or after talking to your solicitor)? Why didn't you read the contract condition that was essential to your contract and ensure it was in the contract?
 

kterry

Active Member
27 March 2017
5
0
31
Too many missing details to comment.

For instance:



Is this in writing, did your solicitor put the condition into the contract? Do you have any evidence showing the agent said you'd get the full deposit back (eg email, SMS, other ..)?

When did you sign the contract (before or after talking to your solicitor)? Why didn't you read the contract condition that was essential to your contract and ensure it was in the contract?

Agent wrote the condition on the contract. Solicitor sent us a document stating due dates such as cooling off expiry, building and pest, finance approval, stamp duty and settlement.

My solicitor confirmed on the phone that I can terminate the contract under the subject to finance before 20th of March 2017 and full deposit will be refunded. I signed the contract with the agent and the agent referred the solicitor to us. She seemed nice and never thought she would do any tricks. We just believed her and solicitor of what they said.
 

Rob Legat - SBPL

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Was the standard REIQ contract used? If so, it will have a finance section that looks like this:

"Finance Amount: $
Financier:
Finance Date:"

What appears on the contract for these three items?
 

kterry

Active Member
27 March 2017
5
0
31
Was the standard REIQ contract used? If so, it will have a finance section that looks like this:

"Finance Amount: $
Financier:
Finance Date:"

What appears on the contract for these three items?

I believe it is standard contract. Below is what the contract has.

10. Finance (complete all details for Clause 5 to apply)
Finance amount:
Finance Date:
Lender:

My solicitor was sure that we will get all our deposit refunded when we terminate under subject to finance.


If we knew that the seller would take $15,000 of our deposit, we would have get some money from family and friends and settle the property.
 

Rod

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I'm a little confused. You wrote:

Agent wrote the condition on the contract.

But you then you quote clause 10 and the details are blank.

If the condition is in the contract and clause 10 is blank, it can be assumed the details are not important and you just needed finance, any finance. Interpretation is in your favour as you didn't write the contract. You seemingly have a legal basis for getting your money back. Unfortunately you may need to take legal action if the seller will not return your full deposit. Recommend you talk to your lawyer about how to get the money back.

I don't think your lawyer has done anything wrong albeit having a blank cl 10 is not good, though not fatal to the return of your money.
 

kterry

Active Member
27 March 2017
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31
Rob above asked what appears on the section of the standard REIQ contract.

Please see below of what the agent wrote in item 10

10. Finance (complete all details for Clause 5 to apply)
Finance amount: sufficient to complete
Finance Date:14 days from contract date
Lender:
 

Rob Legat - SBPL

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You might be using an old copy of the standard contract, as "clause 5" doesn't relate to the current versions for residential land.

If the information appears exactly as you say, you don't have a valid finance clause. The clause you've put states "(complete all details for Clause 5 to apply)." The current, standard REIQ contract for houses and land specifically states, right beside the relevant part: "Unless all of "Finance Amount", "Financier" and "Finance Date" are completed, this contract is not subject to finance and clause 3 does not apply."

From the information given, the "Lender" part is not completed. This means that the finance clause is not operative, and your contract was not subject to finance.

If that's the case, the seller is within their rights to terminate the contract and forfeit the deposit.

Make sure you have something in writing from your lawyer stating that the contract is subject to finance. They should have picked up that the finance clause was not validly completed. Contact your solicitor immediately and seek their confirmation that the finance clause of the contract was not correctly completed, and therefore not operative.

If they did advise you the contract was validly subject to finance when it wasn't, you may have grounds for making a claim against them.
 

kterry

Active Member
27 March 2017
5
0
31
Thanks very much for your explanation.

I do have many proofs of emails that my solicitor stating it is subject to finance and they still believe it is. They were kind and tried to help us to have our deposit back but at the end of the day they gave us wrong information.

How can I claim our loss against them? I don't think they will simply agree that they made mistake.
 

Rob Legat - SBPL

Lawyer
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16 February 2017
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Gold Coast, Queensland
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GIve them an opportunity to consider the matter, and consider making a claim on their insurance (where relevant).

If you aren't satisfied with their response, you can make a complaint to the Legal Services Commission: www.lsc.qld.gov.au