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NSW Conveyancing and Contract of Sale Queries

Discussion in 'Property Law Forum' started by Pam1163, 20 September 2015.

  1. Pam1163

    Pam1163 Active Member

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    I am studying conveyancing and I have been acting for my friend C on the purchase of a house at Gosford. The house is a beautiful old character home which is a bit run down but which C plans to restore. The elderly man who lived in the house has moved to a Retirement Village. C purchased at auction on 4 July for $450,000.00 paying a 10% deposit at the auction. The contract is the standard Contract for Sale of Land with no added conditions.

    C is relying on funds due from an inheritance to have sufficient funds to complete the purchase which is due on 4 August.

    Due to delays in receipt of her inheritance, C is not able to complete the purchase on 4 August. On the afternoon of 5 August I receive by fax from the vendor’s conveyancer, R, a notice to complete appointing settlement at 3.00pm on 12 August.

    I contact C that day and she tells me that she now expects to have her inheritance by 15 August and asks if settlement of the purchase can be deferred to 16 August. I have phoned Roger on 6 August to seek an extension. R’s assistant, E, tells me R has that morning flown to New Zealand to visit a sick relative and she is not sure when R will be back. E tells me she thinks that an extension to 16 August should be OK. I have sent R a draft settlement figures for 16 August asking for cheque details and confirmation of the time and venue for settlement but receive no reply to this.

    On 12 August C phones to say that a claim has been lodged against the Estate by a family member left out of the will so the estate funds cannot be distributed and it is likely to be some time before she gets her inheritance. She says she has now applied for finance but her bank has told her the bank won’t be able to settle before 1 October !!

    C also mentions that she visited the property that morning and found that the house was still full of the elderly owner’s furniture and effects. The agent had told C that the vendor’s family were supposed to sort through and remove everything but had not done so.

    On 13 August I received from R by fax a notice that the vendor has terminated the contract due to C’s failure to settle on the essential date of 12 August set in the Notice to Complete and that R has instructed the agent to pay the deposit to the vendor.

    Help please, as this is all rather confusing.
     
  2. Tim W

    Tim W Lawyer

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    Given this statement
    I am bound to ask... is this a homework question?
    If not, then allow me to draw your attention to section 6 of the Conveyancers Licensing Act 2003.
     
  3. Pam1163

    Pam1163 Active Member

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    It is not a homework question I wish it were as I am in a world of grief & I think I need to find some help as I am in over my head.

    Thank you for the reference to the Act, do you have any other suggestions??
     
  4. Tim W

    Tim W Lawyer

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    Yes, you are.
    (i) Hand the whole thing over to a solicitor immediately.
    (ii) Hope you escape prosecution.
     
  5. Pam1163

    Pam1163 Active Member

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    Thanks Tim, however the NSW Government Fair Trading web page states it is possible to do it yourself so I am sure that prosecution is not an issue. I refer you to Conveyancing - NSW Fair Trading

    First and foremost I am trying to help a friend who is not cashed up & is suffering depression so having you throw such comments does not help the situation.

    I will seek useful assistance elsewhere.

    I wish you a good day
     
  6. Tim W

    Tim W Lawyer

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    Doing it for someone else, the way you are, is not DIY - that's the point.
    And regardless, events appear to have overtaken you.
    For the benefit of your friend, I repeat my earlier suggestion to hand the whole thing over to a solicitor.
     
  7. James D. Ford - Solicitor

    James D. Ford - Solicitor Well-Known Member

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    This is now a potential litigation matter, the Contract has been formally terminated, the $45,000 deposit has been lost as it has been paid to the seller, and the Seller has legal rights to sue for damages for breach of Contract.

    The horse has bolted! and it is too late to avoid substantial losses.

    Has there been any further correspondence from the Seller? Are they planning on taking further legal steps against your friend?

    If so, then my view is (the same as Tim above) to engage a solicitor to act on behalf of your friend, and to instruct them to attempt to negotiate a settlement as soon as possible.

    Kind regards
     
  8. Pam1163

    Pam1163 Active Member

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    Thanks for the help.

    The "whole thing" has been handed over to a local conveyancer, thank you for your assistance.
     
  9. Pam1163

    Pam1163 Active Member

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    Hi James

    I have handed this matter over to a local conveyancer to handle as he advises that all is not lost as the contract has not been validly terminated as the time frame in the notice to complete was an unreasonable time frame.

    As I have mentioned it is well beyond me hence why I handed it over .

    Thank you for your comments

    Cheers
     
  10. James D. Ford - Solicitor

    James D. Ford - Solicitor Well-Known Member

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    Hi Pam, please let me know how it goes, as it would appear that settlement was supposed to be 30 days after the auction on 4 August, and your friend sought extensions... it sounds like the Contract lost its "time is of the essence" status... and a Notice to Complete was issued with a unreasonable timeframe (7 days).

    In these circumstance in NSW, where time is no longer of the essence, a Notice to Complete generally provides for 14 days notice.

    I will not weigh in on the debate, regarding whether 7 days is unreasonable, and would be enough to invalidate the termination of the Contract.

    However, to avoid the debate altogether, there is nothing stopping the vendor issuing a new notice to complete (with 14 days notice), and when your friend is unable to settle, they could then validly terminate the Contract.

    Please let me know if this occurs.

    Kind regards
     

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