NSW Get Name Out of Contract with Ex - Property Law Options?

[Kelsie]

Hey guys,
If anyone could give me a bit of guidance I would appreciate it.

My ex-partner and I put a deposit on a block of land back in November 2013 (he paid all of it) but both of our names were put on the contract. We have since broken up and I have told him that the land is all his and I don't want any part of it. However, he has since told me that in order for him to proceed with the contract the bank will only loan money to the both of us as the land contract is under both of our names. Not only this but the company who sold us the block have said that they won't re-do or change the contract to just under his name. And that we would be a breach of contract.

The conveyancer has also told me that if and when I proceed with the loan, I completely miss on first home owners grant if I ever wish to buy my own property later. I do not at all wish to go in for a loan with my ex.

Do I have any other options of getting out of it under Property Law? Can anybody help?

Any suggestions would be great.

Thank you.

 

[Rod]

Was the purchase for a block of land (already paid for) or for a house and land package? The way you describe the problem it sounds like a land/house package.

Land/house packages can be tricky to exit without some kind of loss. Read the contract very carefully to see what options you have.

Be very wary of tying yourself to a mortgage you do not want (ie Don't do it!).

 

[Kelsie]

Thanks Rod for replying.
No it was a deposit put down. And it was just for land. Not a package or anything. We had the option of building whenever and with whoever which is why we picked them.
The remainder was going to be borrowed by a bank which is why there's a problem because the bank will only loan for the both of us.
I'll have a read over the contract again I think.
Any other help would be appreciated.
Thanks again!

 

[Rod]

Ohh, think I just realised what you mean by 'paid in full'. Means your partner paid the deposit in full, but money is still owing on the land and that you personally didn't put any money into the deposit. I originally thought you meant the land was fully paid off.

One way out is to have you partner take out a loan and payout the land contract and transfer the property into his name.

Other option may be to find a buyer for your contract, assuming the land owners agree to this approach.

If the land is fully paid for (nothing owing), why is the seller still involved? That contract is likely to be at an end.

 

[Kelsie]

Thanks Rod.
That is where there is a problem because the bank will only loan money to the both of us because the contract for the land is under both of our names. They won't loan money to just him.
The seller of the land will not re-do any contracts for us and have said that we need to fulfil it. The land will be registered in approx 6 weeks which is when we have to pay for it.
Once it is paid for then yes we can get a new contract drawn up for just him. But that still doesn't help me with not wanting to go in for a loan for property which isn't mine.
Thank you!

 

[Rod]

Sticky issue.

If you go ahead to pay off the land only contract and both sign loan with the bank, you have to assume the bank will not release you from the loan and will not agree to the change in title. Under this scenario you'd need a written side agreement with your ex saying he is solely responsible for all payments (regular payments, all fees, late penalties etc). Still leaves you liable to the bank though in case of default. And will probably affect your first home buyers grant (if it still exists). Side agreement just means you get to sue your ex if things go pear shaped. One option here is if a grant is available now then you keep all the grant for taking risks allowing the contracts to continue. This way you don't care about a future grant as you already have it. Means your ex doesn't necessarily lose his deposit.

Alternatives:

1. Find another bank.
2. ex finds someone else to replace you on the contract (eg his parents, siblings, friends etc). Probably needs agreement with seller.
3. Cancel contract, potentially lose deposit, may incur other costs.
4. Hook up again with ex.
5. Other????

Hope this helps.

 

[Kelsie]

Haha.. unfortunately there will be no re-kindling of the relationship

Yes the issue with loan responsibility is what has me worried if he ever did default on a repayment it would be a mark against myself. Along with the missing out on any grants.

I will look into other banks/lenders because I think the seller has no intention of changing any of the contract.

Otherwise if not, I will try with requesting the grant money since I potentially lose it once all signed.

I appreciate all your help

Thanks!

 

[Rod]

.... I think the seller has no intention of changing any of the contract.

Interesting comment. Not sure they are allowed to do this but I don't know enough law to know either way. Needs someone with more contract/ACL knowledge to comment. If the replacement person meets the seller's normal criteria and the seller is no worse off, can they refuse to make the requested change???

 

[Kelsie]

I think I need to be making a few calls ...

Thanks Rod!