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VIC Property Law - Buyer of Property Investment Wants to Withdraw from Contract

Discussion in 'Property Law Forum' started by Yu Bai, 18 November 2015.

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  1. Yu Bai

    Yu Bai Member

    18 November 2015
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    I have sold my property investment with a planning permit that will allow redevelopment of 4 townhouses on 24 Aug. Settlement for 3 months is due on 30/11. The contract comes with a special condition that is "subject to FIRB Approval" without a time limit. I had been told by the agent that the buyer is an overseas resident who wants to investment in the real estate industry. He wants to redevelop the property, so being "subject to FIRB" would not be an issue. That was the reason I accepted the offer.

    On 24/09, the agent provided me with an FIRB approval that applied as a company and told me that the contract would be nominated to the company. An unsigned nomination form had been provided to me as well (the contact person of the FIRB approval is not the buyer, and it seems the company was built by buyer's son and a partner).

    Early this month, we received an email from the buyer's solicitor who indicated that the FIRB advised the application for using the property as "owner occupied property" and that it will be denied, but the FIRB also mentioned that if the applicant applies with the purpose of redevelopment it would be approved. The buyer now wants to withdraw from the contract.

    3 Questions.

    1. Because there is no time limit on the special condition, does that mean that the condition would remain open until the day of the settlement?

    2. The agent confirmed that the buyer wanted to nominate a company as the nominee and the FIRB had been granted by the company. Does this mean that the condition has been met? (The buyer even asked the agent to contact the tenant and ask them how much it would cost for asking them to leave the property after the settlement)

    3. It is clear that the buyer wanted to redevelop the property when he signed the contract. Does that mean that, for the buyer to withdraw from the contract, he needs to be rejected by the FIRB by using the purpose of redevelopment instead of "owner occupied" under property law?


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