Land purchasing dispute, any advice?

charles_2016 · Dec 14, 2015 5:23 am

The plan of subdivision had been changed without any notice before I signed the contract.

Here is the situation:

12th Sep. 2014, My agent acquired the contract of sale from a developer and no easement was show in the plan of subdivision included in the contract;

18th Oct. 2014, I finished my signature on the contract of sale;
4th Dec. 2014, the developer signed on the contract of sale;

Recently, I requested the engineering plan(which had not been attached in the contract) of my land from the developer found that there is 2 meters easement along the long side of the lot, because of which the usable frontage of my LOT decrease from 13.75 meters to 11.75 meters

Saint Mike · Dec 14, 2015 7:13 am

What does your agent say ?

charles_2016 · Dec 14, 2015 7:35 am

Saint Mike

What does your agent say ?

The agent said I can only find a solicitor to negotiate with the vendor to ask my depsit back.
In fact, in this area even a lot 50sqm smaller than mine costs more than I spent on my lot. So I suppose that the vendor shoud compensate for the mistake.

However, the legal process will be long and might not be finacially efficient, which makes me undecided how to deal with this.

Hope someone here can give some advices.

aloenyx · Dec 14, 2015 4:34 pm

Have you tried just speaking to the land people directly and informing them of what has happened, maybe in writing requesting to withdraw from the contract? If they have a lot of interest in the land, maybe they'll just release you without any issue.

Charley · Dec 14, 2015 6:54 pm

I had a solicitor look over my land contract before signing. I would strongly suggest seeking the advice of a solicitor.

charles_2016 · Dec 14, 2015 7:04 pm

Charley

I had a solicitor look over my land contract before signing. I would strongly suggest seeking the advice of a solicitor.

Could you please recommend a solicitor in Melbourne.

My email:felar2016@gmail.com

qebtel · Dec 18, 2015 2:53 pm

Quote:

2th Sep. 2014, My agent acquired the contract of sale from a developer and no easement was show in the plan of subdivision included in the contract;

If no easement was shown in the plan with the contract, then thats what you would expect. The developer just cant just change it to suit themselves. Such misrepresentation is against the law. It would seem fairly straightforward that you have an out.

Start off by given written notice to the vendor that you withdraw from the contract and demand your deposit back. You dont need a solicitor to do that.

charles_2016 · Dec 18, 2015 3:15 pm

Thanks qebtel,

There is a clause written in the contract that the vendor can change the plan of subdivision without grant the right to the purchasers rescinding the contract or asking for compensation.

However, my case is not under this clause as the revision had occurred before contract became valid.

By the way, according to your experience, does this easement affect the value of the land and approximately how much will it affect according to the info provided?

Regards

weekend_warrior00 · Jan 03, 2016 3:57 pm

The easement is required to be listed in the Encumbrances section of your contract.
An easement will affect the value and future saleability of your block and its a turn off for many buyers.

its easy to work out what value its affected. lets say you paid 600,000 for a 600sqm block,
and the easment covers an area of 50sqm then the value of that eeasment is 50,000. another method is to use the unimproved land value of the block.

I had this same problem when buying in Queensland. Selling Agent did not disclose the easement to any future buyers nor was it listed on the contract. I had a council map with me showing the easement, needless to say we did not buy.

find yourself a Lawyer, pay him 500 odd dollars to knock up a "without Prejudice" letter informing the seller about this issue and give them the option to either accept a rescission of the contract on the basis that all withholding funds will be released OR agree to a revised price to refect the easement.
mark it "Without Prejudice" so as to aviod the seller or their solicitor in using it against you. It also leaves you the option to continue with the sale as normal.

charles_2016 · Jan 03, 2016 4:53 pm

weekend_warrior00

The easement is required to be listed in the Encumbrances section of your contract.
An easement will affect the value and future saleability of your block and its a turn off for many buyers.

its easy to work out what value its affected. lets say you paid 600,000 for a 600sqm block,
and the easment covers an area of 50sqm then the value of that eeasment is 50,000. another method is to use the unimproved land value of the block.

I had this same problem when buying in Queensland. Selling Agent did not disclose the easement to any future buyers nor was it listed on the contract. I had a council map with me showing the easement, needless to say we did not buy.

find yourself a Lawyer, pay him 500 odd dollars to knock up a "without Prejudice" letter informing the seller about this issue and give them the option to either accept a rescission of the contract on the basis that all withholding funds will be released OR agree to a revised price to refect the easement.
mark it "Without Prejudice" so as to aviod the seller or their solicitor in using it against you. It also leaves you the option to continue with the sale as normal.

Thanks for your patient reply and practical suggestions!

But, I do not know any laywers that can finish the letter with only 500 dollars.

So do you have any recommendations on the solocitors?

qebtel · Jan 04, 2016 1:35 pm

charles_2016

Thanks qebtel,
There is a clause written in the contract that the vendor can change the plan of subdivision without grant the right to the purchasers rescinding the contract or asking for compensation.

It is foolish to sign something like this. The idea of a contract is to rigidly set out what both parties expect from their agreement. It is not to have a dynamically changing set of circumstances to benefit one party.

charles_2016

However, my case is not under this clause as the revision had occurred before contract became valid.

A contract has force when all parties sign , thereby instantiating (executing) it. The contract was not executed when you signed it in Oct, but in Dec when the vendor signed it.

charles_2016

By the way, according to your experience, does this easement affect the value of the land and approximately how much will it affect according to the info provided?
Regards

You cannot calculate the depreciating effect of an easement through simple math. Its is more to do with its actual impact on the usability of the land, and since it sounds like you are on a 14m wide block in Melb ? the land probably has substantial worth. Two less frontage metres can dramatically alter the plan options available to someone wishing to build. The value could easily be affected 20-30% or more .

No offence, but From what you say, this has been handled very poorly from your end, not the least of which is that you appear to be sitting on the issue right now.

With that type of clause in the contract, the vendor obviously wants to "have it all over you", so time to bite the bullet. See a solicitor immediately, any solicitor, and hang the cost.

It may be that you do not have a leg to stand on, but if you do, its imperative to start legal action ASAP if you want to rescind the contract and get your deposit back.

weekend_warrior00 · Jan 06, 2016 5:55 pm

charles_2016

weekend_warrior00

The easement is required to be listed in the Encumbrances section of your contract.
An easement will affect the value and future saleability of your block and its a turn off for many buyers.

its easy to work out what value its affected. lets say you paid 600,000 for a 600sqm block,
and the easment covers an area of 50sqm then the value of that eeasment is 50,000. another method is to use the unimproved land value of the block.

I had this same problem when buying in Queensland. Selling Agent did not disclose the easement to any future buyers nor was it listed on the contract. I had a council map with me showing the easement, needless to say we did not buy.

find yourself a Lawyer, pay him 500 odd dollars to knock up a "without Prejudice" letter informing the seller about this issue and give them the option to either accept a rescission of the contract on the basis that all withholding funds will be released OR agree to a revised price to refect the easement.
mark it "Without Prejudice" so as to aviod the seller or their solicitor in using it against you. It also leaves you the option to continue with the sale as normal.

Thanks for your patient reply and practical suggestions!

But, I do not know any laywers that can finish the letter with only 500 dollars.

So do you have any recommendations on the solocitors?

Ring around your local area and find a solicitor that has experience in property law, there should be plenty. Be prepared to wear the cost as like mentioned already, it may be time to bite the bullet.

The solicitor who drafted and pitched my letter was the same firm who covered the conveyancing for all of my properties.

charles_2016 · Feb 01, 2016 2:03 pm

weekend_warrior00

charles_2016

weekend_warrior00

The easement is required to be listed in the Encumbrances section of your contract.
An easement will affect the value and future saleability of your block and its a turn off for many buyers.

its easy to work out what value its affected. lets say you paid 600,000 for a 600sqm block,
and the easment covers an area of 50sqm then the value of that eeasment is 50,000. another method is to use the unimproved land value of the block.

I had this same problem when buying in Queensland. Selling Agent did not disclose the easement to any future buyers nor was it listed on the contract. I had a council map with me showing the easement, needless to say we did not buy.

find yourself a Lawyer, pay him 500 odd dollars to knock up a "without Prejudice" letter informing the seller about this issue and give them the option to either accept a rescission of the contract on the basis that all withholding funds will be released OR agree to a revised price to refect the easement.
mark it "Without Prejudice" so as to aviod the seller or their solicitor in using it against you. It also leaves you the option to continue with the sale as normal.

Thanks for your patient reply and practical suggestions!

But, I do not know any laywers that can finish the letter with only 500 dollars.

So do you have any recommendations on the solocitors?

Ring around your local area and find a solicitor that has experience in property law, there should be plenty. Be prepared to wear the cost as like mentioned already, it may be time to bite the bullet.

The solicitor who drafted and pitched my letter was the same firm who covered the conveyancing for all of my properties.

I called a lawyer firm, found that the cost will be 2000$ only finishing the WITHOUT PREJUDICE LETTER.

If I would like to hire them negotiating with the vendor, the cost will be 5000$ minimum.

What is more, they do not guarantee anything.
Is it reasonable?

weekend_warrior00 · Feb 08, 2016 7:52 pm

charles_2016

weekend_warrior00

charles_2016

Thanks for your patient reply and practical suggestions!

But, I do not know any laywers that can finish the letter with only 500 dollars.

So do you have any recommendations on the solocitors?

Ring around your local area and find a solicitor that has experience in property law, there should be plenty. Be prepared to wear the cost as like mentioned already, it may be time to bite the bullet.

The solicitor who drafted and pitched my letter was the same firm who covered the conveyancing for all of my properties.

I called a lawyer firm, found that the cost will be 2000$ only finishing the WITHOUT PREJUDICE LETTER.

If I would like to hire them negotiating with the vendor, the cost will be 5000$ minimum.

What is more, they do not guarantee anything.
Is it reasonable?

Can you use the same firm that did your convayancing? they may offer a discounted rate?
I would have thought you would be able to find something cheaper..... is that the cheapest of quotes you've recieved? (get a minimum of 3-4 quotes)
you could get the letter drafted and sent through, anything else from then on you may be able to handle if your up to the task.

I suggest one of the following options:
1. take it as it has happened, move on as lesson learnt
2. cough up the fee for the legal assistance and get what money you can back from the deal. (less the legal fees)
3. cough up the fee and hope you can proceed at a revised sale price. (less the legal fees)

qebtel · Feb 10, 2016 4:16 pm

$2000 for a letter is not reasonable. Assuming $300 ph for solicitor's rates , it does not take 6.5 hours to draft up a standard pro forma letter .
Shop around.