The Gold Gang

I am feeling pretty desparate and would appreciate any advice from someone who knows anything about Australian law and whether a case could actually be brought against me and made to stick, given that I am living in England and don't have any assets in Australia.
Here is a summary...we paid 5% depsoit on an apartment in Perth in 2007, purchase price $540k AUD. It seems we got conned and signed a 'cash contract' meaning we must settle irrespective of whether we can arrange a mortgage for this purchase, which was intended as an investment and for renting out. Eventually this apartment is now ready, and we have managed to arrange the mortgage on it, but we needed to cough up $40k AUD ourselves.
We had sold our hopuse in UK and were going to use capital from that to finance the 40k, only that fell through and instead we have had to REMO our house in UK where we are still living to raise those funds. We have done that, only to be told that as the Lending bank in Perth have now valued the apartment at $510k, we must find a larger amount of money, and this figure keeps growing and is currently at $105k! We cannot raise this money, we have tried everyone and everything, our backs are to the wall. According to the settlement agent, we will lose our deposit and the stamp duty (a total of £22k GDP) however, we are also being told the Developer could come after us if they have to sell that apartment 'at a loss'. So its OK for us to have to suffer the drop in house prices and still pay the original 540k but not oK for the Developer to accept that what he sold in 2007 is no longer worth the price.
I am having sleepless nights, can't concentrate and feel sick with worry. My husband wants us to walk away, lsoing the deposit and fight them for anything they then try to get out of us. Fortunately our home here isn't being used as security for this purchase but don't think we are rich and can afford this, we are not, and our home here will be so heavily mortgaged that of course we are worried about what happens when rates go back up here as they will do sooner or later.
Does anyone on here know whether if the Developer tried to claim more from us, whether they have any jurisdication over non residents?
Sorry to tell this sorry tale, can only say it has put me off in more ways than one, we are just ordinary hard working people trying to give oursleves some security for an uncertain future and instead, it looks as if we will lose everything we have invested.
Any knowledgeable help gratefully recieved, even a number for a good Solicitor who might know the answer!

joho

You could try telling the developer that you can pay on the the valued $510k you cannot raise any more money, he can take it or you will walk away and he can spend heaps of money chasing you down to try to get the rest. He may agree especially if he needs to sell a few with the down turn. Otherwise I think legally there is nothing you can do as you signed an agreement. Have you got a solicitor look things over.

Jo

Petals

Buying off the plan is always fraught with problems. Did you have a rental guarantee in the contract or any clause about price. I think if I were you I would go and see a local solicitor it may be worth the money. In Vic they have to issue a notice of rescission if you do not settle and you have 14 days to remedy it. This is usually after settlement should have taken place and interest notices have been issues. So really nothing much happens till the settlement date. Interest is then levied on the outstanding sale price at the rate set down in the contract of sale.

The legal people in UK will probably have contacts here who will assist we used to use overseas solicitors for problems such as this.

comet555

I would certainly try what Joho has said. It's certainly time to ask a competent lawyer as well, they will know the ins and outs on the law (or at least they should!).

Sorry for what's happened to you. I'm not entirely sure I agree with the "I've been conned" statement though. I'm certain that a very common condition on contracts is to arrange suitable financing. So to me, it sounds rather like you might not have done your research in respect to what conditions you should put in. I'm also guessing there wasn't an agent acting on your behalf that would have advised you to put that clause in there. Alternatively it seems like something a lawyer may have picked up on if they were to review the contract.

So, I guess to clarify.... did you use any sort of agent or a lawyer when you signed the deal for the property? It's sort of reading like you didn't. If you didn't then I would certainly mention that to a lawyer now, you never know if it'll help or not.

The Gold Gang

Thanks Jo, trying this now.

The Gold Gang

Well there were some conditions to do with financing that were all scored out and marked with 'Not Applicable'. And whilst I don't recall exactly what the Real Estate agency advised me when I queried this, as I know I did, it was obviously something that was convincing enough for me to buy at the time. No fool like an old fool, eh?

No I didn't use an agent at the time, I honestly didn't know or think to do that, I've never bought off the plan before and I had so many conversations with the Real Esate agent and I trusted them. I didn't know how it would turn out 2.5 years later, I didn't foresee that we would still be stuck here in England.

Swerv-o

Did you get a lawyer to look the contract over?


S

comet555

I'd definitely take the original contract to a lawyer and see what they say. Perhaps you didn't initial next to areas that were scratched out? Who knows.... but it is unfortunate that you're in the situation you're now in.

Good luck with it. Joho's suggestion is a good one. If you were to try and pull out they would have lots of legal fees and may/may not get anywhere with it especially since you're out of the country. Given that the price has dropped it would probably be more attractive to settle things with you rather than pay a fortunate in legal costs and/or find a buyer to pay less for it.

If you're stuck it wouldn't hurt to try. I would definitely ask a lawyer though. If you're lucky they might find something in the contract to invalidate it in some way. That would be the best case scenario.

jad n rich

Usually if you intend to make one purchase with the proceeds from another property, the purchaser needs to make sure the clause "subject to successful completion of contract on..." is put in.

Buying off plan is like any property purchase a great idea when the market goes up, and a bum one if the market goes down. Off the plan is risky at the best of times, especially in a market you dont really know that well.

Now you need a solicitor to read the contracts and see if they can find any way out, however it sounds a pretty standard contract from what you have said.

Another idea, depending on the developer, is to still purchase but renegotiate the terms, however if you simply dont want it now, thats not going to help.

JackTheLad

Unfortunately, yes.

Looking at this from a different angle, if the value of the property had gone up by say $100k, would you be happy to pay the developer more money? Or would you be happy if the developer were to terminate the contract and sell to someone else for a higher price?

Mrs JTL

The Gold Gang

Of course what you say is true, however, the Developer will still make a profit even if selling for slightly less as it didn't cost $540k to build the apartment.
His loss is on paper, mine is real money....

comet555

No loss is just on paper, that extra profit would be going into their bank account. Of course they're selling it to make a profit, and that profit will benefit someone.

Sorry, but once you've purchased the home then any fluctuations in property value belond to the owner. So if you buy it and it goes up in value you get to keep that of course, and if it goes down it's your loss. That's the gamble with buying property. A contract is a contract, less learned I think.

Petals

Its buyer beware here in Aus and contracts are contracts. People use conveyancing companies who are not allowed to give legal advice. Special conditions have to be carefully drawn to cover all possibilities.

To the other op a special condition to say that it depended on the completion of a sale would not be acceptable to a vendor with a solicitor preparing his docs. Who wants to have a property off the market waiting.

14 days is the usual time allowed for finance and often less than that.

Sorry but if you pay peanuts for advice on conveyancing you may get monkeys.

The Gold Gang

Is $1795 AUD Settlement Fee peanuts then?

The Gold Gang

And of course I have taken all the disbursement costs off before quoting that figure.

As the OP says, Lesson Learned....