VIC What Happens if a Corporation Defaults on a Purchase?

[Tizzma]

Under Property Law, if a corporation defaults on a purchase, what happens?

 

[James D. Ford - Solicitor]

Hi Tizzma

Your question is very open ended...

is it a standard Contract of Sale, or an off-the-plan purchase, or a Put and Call Option?
are you the buyer or the seller?
what is the reason for the default?

It would be the same as any legal entity defaulting on a purchase of a property... assuming a standard Contract of Sale - the seller would normally have legal rights to affirm or terminate the Contract.

Except being a company:

- if there are no personal guarantees;

- the company is only a $2 company (in that it has no assets); and

- the deposit being held is only a nominal amount...

then even though the seller might have legal rights to pursue the company, they may decide it is not commercially feasible to do so... and the real estate agent may chase the seller to be paid their sales commission.

If this situation has occurred, it then begs the question, as to what legal advice the seller obtained in accepting a contract from a $2 company, with no PG's, with only a nominal deposit.

Kind regards

 

[Tizzma]

Hi Tizzma

Your question is very open ended...

is it a standard Contract of Sale, or an off-the-plan purchase, or a Put and Call Option?
are you the buyer or the seller?
what is the reason for the default?

It would be the same as any legal entity defaulting on a purchase of a property... assuming a standard Contract of Sale - the seller would normally have legal rights to affirm or terminate the Contract.

Except being a company:

- if there are no personal guarantees;

- the company is only a $2 company (in that it has no assets); and

- the deposit being held is only a nominal amount...

then even though the seller might have legal rights to pursue the company, they may decide it is not commercially feasible to do so... and the real estate agent may chase the seller to be paid their sales commission.

If this situation has occurred, it then begs the question, as to what legal advice the seller obtained in accepting a contract from a $2 company, with no PG's, with only a nominal deposit.

Kind regards

THANK YOU FOR YOUR HELP!