Late completion of property settlement.

Ozibob · Jun 19, 2007 4:13 pm

HI all

Just a quick question about a late settlement of a property.
Just the quick facts
1. we sold our block of land.
2.Settlement date was supposed to be 15th July
3. They needed more time to complete.

What i would like to know if anyone has had any experience with this. We agreed to give them 7 days without any penalties ( i know but with this saga of trying to build etc i reckon i must have broken a 100 mirrors and just want some good karma to come back sometime

)

Here is what is written in our contracts

Quote:

If the purchaser does not complete this purchase by the completion date, without default by the vendor, the purchaser shall pay to the vendor on completion, in addition to the balance of the purchase money, an amount calcatulated at 10% interest on the balance of the purchase money, computes at a daily rate upon the day immediately after the the completion date to the day on which this sale shall be completed. It is agreed that this amount is a genuine pre-estimate of the vendors loss of interest for the purchase money and liability for rates and outgoings.
It is agreed any amount payable to the vendor under this clause shall be paid on completion.

This is how i read it.

Price 238000
Depoist 23000
Balance 215000

10% of 215000 is $21500 per day

Is this correct it seems a bit high?
Also would like to hear about your delay of settlement and experiences.

Thank you

ps If in the wrong section please move it

vanderlay · Jun 19, 2007 4:23 pm

It would be 10% per annum calculated daily

so : 215000/10/365 or about $59 per day. They would normally pay any fees you incur for re-booking with your solicitor/conveyencer and bank as well. This may be in your contarct somewhere too.

Yak_Chat · Jun 19, 2007 4:39 pm

Hi Ozzibob, Been there done that - and I'm with you - the good karma does come back.

My suggestion, you have given them 7 days, are they still having problems ?

You do need to up the anti to let them know - you're not going to just sit there waiting and you want to hurry them along, but you also don't want to loose the sale, more delays etc trying to sell it again etc.

So if you're sure they are going to complete, then the $ Vanderlay has calculated are what is the norm. plus any of your extra costs.

It really depends on the market as to if you can sell the block easily, for the same dollars as to how much leeway you want to give them and hang in there, or put it back on the market as well etc.
You know how many people looked at the block, do you want to go through that again, are there athers in the waiting, and do you really think the existing buyers can complete.? Legally they have to - Financially they may not be able to !
Only you can work the rest of it out.
Good luck, but you the one with the reins in your hands. Use them as required.
Steve

Ozibob · Jun 19, 2007 6:26 pm

Just another question about the above problem

With the deposit paid to the real estate for the block of land, if they pull out of the sale ARE they able to get the money back or do they forfeit it?

Quote:

My suggestion, you have given them 7 days, are they still having problems ?

The 7 days are up this Friday 22nd June. From what i have been told it's the bank holding them up.

Quote:

It really depends on the market as to if you can sell the block easily, for the same dollars as to how much leeway you want to give them and hang in there, or put it back on the market as well etc.
You know how many people looked at the block, do you want to go through that again, are there athers in the waiting, and do you really think the existing buyers can complete.? Legally they have to - Financially they may not be able to !

They did come in $$$$ above one other offer.

One thing is for sure i don't want to put it back on the market and all the hassles.Don't know if i could get that amount again.

I just want this 18 month nightmare to end!!!

Yak_Chat · Jun 19, 2007 6:34 pm

Talk to your conveyencer.

Generally they loose the deposit in total. - That's why you ask for a deposit - so they have pain if they want / have to walk away and it helps cover your costs.
Re the agents fees - generally they can't ask for anything and they have to re-sell it for you. I could be wrong on that bit though.
Steve

Pearl_07 · Jun 19, 2007 6:38 pm

Hi Ozibob, what a pain for you. In relation to the deposit, your contract will tell you what happens to it if the Purchaser fails to complete. It may also tell you that you need to give notice requiring them to complete within a specified period after which you are able to terminate the contract if they fail to do so.

Cookiemonster · Jun 19, 2007 6:38 pm

Ozibob

With the deposit paid to the real estate for the block of land, if they pull out of the sale ARE they able to get the money back or do they forfeit it?

The buyer forfeits 10% of the purchase price if they withdraw from the sale after the cooling off period..

rellie · Jun 19, 2007 9:23 pm

There is some great info here

http://www.lawyersconveyancing.com.au/default.asp

Pulling out of a contract of sale one the cooling off period is over is exremely difficult, even if it is subject to 'special conditions' such as finance.

Our land settlement was delayed for 4 days due to our banks incompetence and apparently this is not uncommon.

Yak_Chat · Jun 20, 2007 9:02 am

re losing the deposit, oopps didn't see it was $23k, - refer to your contract.

It will all be in the contract and almost every state in Australia has a different contract, so talk to your conveyencer.

Just be clear in your instructions to them. and yes serve your notices as per the contract.

The conveyencor/solicitor will not offer you much advice.
They are pretty much there to act on your instructions and tell you what the law is as per your contract and that's about it. They wonlt tell you waht to do.
So be clear in telling them what you want to do.
Steve

ahuang · Jun 20, 2007 1:33 pm

We have similar experience on this.

When we found our first house, someone offered a better price and we thought that's the end and start looking for another one. Weeks later we noticed although the sign has been removed from the property, it's still not shown as "sold" in the agent's window. Checked with agent and found that the original purchaser was from overseas and had problem with finance. We quickly put in an offer and probably the owner is happy with the extra $ from the deposit, he accepted our price.

Lesson learned: until it's marked as sold, there's still chance of changes!

When it's our turn for the exchange, our busy solicitor's silly young secretary made a mistake and missed the date. As the solicitor was an old friend, we end up paying 50% of the fine, but we never use his service again.

Lesson learned: always check and remind your solicitor to make sure they got the correct date.

Cheers
Allan
http://building-our-first-house.blogspot.com/

miagi · Jun 20, 2007 7:50 pm

1. always read contracts.
2. then read it again and understand your contract.
3. read it and summarize all the clauses into plain english that you can understand easily.

Ozibob · Jul 01, 2007 9:09 pm

Good news it was finally settled last Wednesday

No more stress over it.

vanderlay · Jul 02, 2007 10:39 am

excellent! good to hear...