QLD Getting Out of House Purchase in Queensland

[Needing help]

Made an offer in a house in Queensland that has been accepted pending finance.
Finance conditional on Morgage lenders insurance.
Looks like a partner split is inevitable so I want to withdraw from buying the house.
Lenders insurance is not yet approved.
Is there a way to get out of REIQ contract without losing large deposit paid?
Please help

 

[John R]

Hi Needing help,
I assume that you didn't buy at auction and that "mortgage lenders ins" means mortgage lenders insurance.

1. If you are still within the 5 day cooling off period, you can cancel and the seller must refund the deposit within 14 days. The seller may deduct a penalty of up to 0.25% of the purchase price.
2. If the cooling off period has passed and your contract is based on the standard (clause 3 in the REIQ Contract of Sale, approved by the Queensland Law Society) "subject to finance" clause, clause 3.1 specifies that a purchaser (that is, I assume, you and your partner) must take all reasonable steps to obtain approval.
3. The failure to apply for finance is generally considered breach of contract and the vendor may take steps to sue you for damages (which may exceed the deposit amount).

Given the large deposit amount, you should consider engaging a lawyer to provide formal advice on your situation or contacting a community legal centre near you, such as the Caxton Legal Centre in South Brisbane or another member of the Queensland Association of Independent Legal Services (QAILS).

I hope this helps. Please keep us updated with your progress.

 

[Needing help]

T

Hi Needing help,
I assume that you didn't buy at auction and that "mortgage lenders ins" means mortgage lenders insurance.

1. If you are still within the 5 day cooling off period, you can cancel and the seller must refund the deposit within 14 days. The seller may deduct a penalty of up to 0.25% of the purchase price.
2. If the cooling off period has passed and your contract is based on the standard (clause 3 in the REIQ Contract of Sale, approved by the Queensland Law Society) "subject to finance" clause, clause 3.1 specifies that a purchaser (that is, I assume, you and your partner) must take all reasonable steps to obtain approval.
3. The failure to apply for finance is generally considered breach of contract and the vendor may take steps to sue you for damages (which may exceed the deposit amount).

Given the large deposit amount, you should consider engaging a lawyer to provide formal advice on your situation or contacting a community legal centre near you, such as the Caxton Legal Centre in South Brisbane or another member of the Queensland Association of Independent Legal Services (QAILS).

I hope this helps. Please keep us updated with your progress.

Thank you for your advice. Cooling off period has expired and finance has been conditionally approved pending valuation and the approval from the Morgage lenders insurance people.
Valuation will come in ok so can't get out there. Was hoping that I could persuade Morgage lenders to refuse which would make the finance fall through. It would appear however that unless a life changing event such as loosing my job has occurred then there would be no grounds to not approve. ( why would they want to loose there $5,000 ?)
Looks like I'm stuck and will have to go it alone unless there is some loophole or thing I haven't thought of.

I really appreciate your reply so many thanks.

 

[James D. Ford - Solicitor]

Hi needing help

If a partner split is inevitable, (and only if there really is no way to reconcile your differences) - then the sooner you separate, the sooner you can inform the loan broker, bank and mortgage insurance company that you have parted ways.

I assume that this could be enough for the bank to revoke their approval, and for the mortgage insurance to be denied.

Whilst you have the duty to take all reasonable steps to have finance approved, you also owe a duty to the financiers and insurers to disclose all material facts.

Additionally, if you have engaged lawyers or a conveyancing agent to act for you in the purchase (if not, you need to), you should instruct them to cast an extra critical eye on the search results, and perhaps conduct additional searches where appropriate.

Kind regards, James