NSW Can I get out of a house sale Contract

[Kristine Taylor]

Background
House up for sale. Buyer looks at house, (24/5/17) vendor slack in accepting offer. Offer accepted after agent asks for $10,000 more than offer. Week goes by. Vendor still does not reply so threat of dropping offer to agent happens. Vendor accepts offer. After two weeks, Contract drawn up. Vendor again slack in signing. At the same time buyer engages NSW licensed conveyancer and has building inspector check over house. Building inspection report received. Copy sent to buyers Conveyancer but she doesnt read the inspectors report and just files document. One thing that is discovered by building inspector is house needs a floor waste in bathroom. Cracks in some walls and need to be repaired. Two weeks go by and buyer told that vendor hasnt got back to her solicitor. Buyer told we could have signed a week earlier, and we waive the 5 days cooling off period. Buyer told vendor hasnt got back to her solicitor again. Once the contract agreed the 42 days start. This makes the settlement date 26/7/17. Buyer asks for early settlement and advised that a penalty applies if we settle early. So accommodation, storage and pet boarding costs increase for buyer. Flood report received from local council and it is discovered that the house is in a flood prone area. As contact is now unconditional what rights does buyer have about the faults in house.

 

[Tripe]

You need to check your conditions of sale, but a lot of contracts have clauses that if the sale does not settle( after the contract goes unconditional) then the Vendor may be entitled to compensation from the purchaser until the property is sold at a future date.

For example the vendor may have a condition in the contract that allows them to claim from the defaulting purchaser the difference between a future sale price, if the price is lower.

Also, the vendor may also be able to claim a weekly/monthly fixed interest rate on the contract sale price (for example 10%) until the property is sold, as the vendor may of committed to another house purchase and is dependant on the funds from their house sale, which most likely would require them to take out an emergency loan to cover the completion of sale on thier new property.

Plus the purchaser would most likely forfeit their deposit to the vendor as well.

I had all of the above conditions on my current house when I purchased 5 years ago.

If the contract did not have a conditional of sale that required the property to be above a flood area zone and the contract has gone unconditional, I am struggling to see how you can get out of The sale without severe financial penalties.

Caveat Emptor