Join our investing community

Vendor pulling out of contract of sale

Discussion in 'Accounting, Tax & Legal' started by Jacque, 8th Dec, 2005.

  1. Jacque

    Jacque Team InvestEd

    Joined:
    16th Jun, 2005
    Posts:
    1,885
    Location:
    Sydney
    A purchaser agrees to buy a NSW property. Contracts are exchanged and the cooling off period expires, with the buyer now fully committed. Vendor, however, gets cold feet and decides not to sell! :confused:
    Legally, what happens from here and how is the buyer compensated?
    Is the vendor able to simply cancel a contract of sale at this point?
    Having never come across this situation before, I would imagine that the buyer would deserve some type of compensation and the purchaser would still have to fork out agents fees, at the very least?
     
  2. Denis

    Denis Well-Known Member

    Joined:
    16th Aug, 2005
    Posts:
    67
    Jacque,
    The vendor has signed a legally binding agreement.He is not entitled to renege
    once time periods have elapsed.Any costs are all on the vendor.
    If it was the situation that the purchaser may be happy for the vendor to renege,this can be mutually agreed,but the vendor would be liable for all purchaser costs up to that date
    Regards
    Denis
     
  3. Jacque

    Jacque Team InvestEd

    Joined:
    16th Jun, 2005
    Posts:
    1,885
    Location:
    Sydney
    Well this is what I would assume. But there are some costs that are not easily quantified. Eg: stress of having to find another property, lost costs with rearranging removalists, temporary accommodation (if they sold their house previously) etc
     
  4. Steph83

    Steph83 New Member

    Joined:
    11th May, 2009
    Posts:
    1
    Location:
    WA
    I stumbled accross this in a web search, we are in the opposite situation.
    We sold our house not understanding how equity worked and really wished we had of been informed to consult the bank before selling.
    Anyway after selling this place as values have gone down we no longer have the equity to build our home. When we first found out before the buyer had finance approval I asked or agent to give us a price for marketing charges if we were to take our house of the market. He said he would get back to us but never did.
    Then the sellers went over the date for finance approval so I asked him if we could get out of the contract and get the charges for marketing he still never got back to us. Then two days later I rang him and he said the sellers have got finance approval but not in writing so i rang him the next day and he said he had it in writing that was the 22nd of April.
    So we decided there was nothing we could do and we were stuck not being able to build. We then also found out that because of losing the equity in the property we were selling the bank was also going to ask us for money back.
    Then I rang my settlement agent and they told me that the settlement date was the 25th of May but according to the contract it was 30 days from finance approval which should have made it the 22nd which meant the agent lied to us about the buyers having finance approval.
    Is there anything we can do to get out of the contract at this late a stage? Settlement is due on the 25th of May.