2 Contracts Same Property?

[DeanMcNamara]

I am wondering if anyone knows the legality of having two contracts on the same property between the same two parties.

For instance, I entered into a contract on an apartment. 2 years later the developer wants to change the contracts so he sends out a second contract.

Both parties have signed the second contract - what condition is the first contract in now?

I have elected to exercise the due diligence clause in the second contract and would like my deposit refunded.

The developer has refused on the grounds that he believes I have to revert to the previous signed contract.

Have you heard of any shambles like this from a reputable developer before?

[OllyN]

I would have thought that as both parties willingly entered into a second contract, then it was implied that the first contract was cancelled unless the second contract says otherwise. Not enough detail supplied.

[WGN ex-property manager]

Caveat: I'm not a lawyer.

Sometimes a renegotiation does occur after a sale and purchase agreement is unconditional.

Basically the parties agree to new terms and conditions, and the new (2nd) S&P has a clause releasing both parties from the prior contract, and binds them to the T's and C's in the new contract.

If one party or the other does not like the new contract, they are not obliged to sign it. They can choose stick to the old contract and (if there is a problem) use what ever legal means at their disposal to enforce it (but they still might not get what they want).

If both parties have signed the second contract, but it is still in "Due Diligence" then you need to read the clause releasing parties (assuming there is one) from the first contract very carefully. Does it release parties once the new contract is SIGNED or once the new contract is UNCONDITIONAL?

Short answer is "get a lawyer to take a look"

I've read your website and I'm actually a little confused. As far as I can tell the developer is asking you to sign a new contract with "some dates changed" and a REDUCED price. I'm not clear what issues the changed dates might cause, but isn't a reduced price a good thing for you?

Just to be clear - what outcome are you seeking here, and which part of what contract is preventing you from getting it?

[DeanMcNamara]

That would be my understanding as well Olly.

Robin, the whole thing is such a mess that I have no idea what part of what contract is preventing me getting my money back. Both parties have signed the second contract.

I tried to negotiate with the developer but he refused to acknowledge any of my direct contact. I have since been dealing with the new realtor and now his lawyers.

My position is I am no longer interested the project, as my original confidence in the developer has been severely eroded. I would like to exercise my due diligence clause and my refund paid in full.

The fact that I have been hounded as recently as a couple of weeks ago to sign the due diligence clause on the second contract would suggest they believe that contract is still in play - despite the extended time lapse since the signing of the contract. All the while threatening to fall back to the previous contract if I do not sign.

There are other anomalies that suggest this is far from normal legal proceedure that I have not yet published.

[WGN ex-property manager]

what does your lawyer say?

[DeanMcNamara]

Given the low amount of the deposit, I am reluctant to start paying lawyers and also made that clear to the developer. Hence the website.

However, I know of at least one other person in my situation who did pursue matters legally and it was settled in his favour. This is what I am basing my legal precedent on, and why I feel it is pointless me paying a lawyer to draw the same conclusion. I have offered that if the developer would like to fund my lawyer, I am more than happy to prove the point again.

[WGN ex-property manager]

I can see that the website would be a pain for the developer, and motivate them somewhat to give you what you want.

Did I read correctly in the website that their lawyer offered you your deposit back minus $2000? If so this seems like a reasonable result for you given that you wish to exit the deal.

Compare to the experience that folks who put money into BlueChip have had.

If the development did get built would you be happy to settle on it at the new reduced price?

[WGN ex-property manager]

That would be my understanding as well Olly.

Robin, the whole thing is such a mess that I have no idea what part of what contract is preventing me getting my money back. Both parties have signed the second contract.

It would help my understanding if you posted both contracts in full on your website.

[DeanMcNamara]

I have already lost $7500 Richmastery "costs" so I am rather reluctant to give up any more of my $5000.

If I am indeed held to my original contract which is what the developer is threatening, I have a sunset clause for late next year. If the project is not finished by then he has to return my deposit anyway - go figure.

It will take a while to scan the complete contracts, but as this isn't looking like being settled any time soon I will probably do so.

The website will be more of a pain for the developer when the search engines re-cache.

[OllyN]

Who introduced you to the deal in the first place?

[DeanMcNamara]

It was a Richmastery hosted event where the Developer made his pitch.

[OllyN]

A hard lesson

Typically these deals are offered at hard-sell events dressed up as seminars
by spruikers promising boundless wealth including all the secrets that "only the rich" know about.

The moral of the story is:

Never ever ever buy a property from any one who claims to "educate " you on how to make money in property while at the same time just happens to let you into a special deal they have on hand.

You have had a hard lesson and hopefully others will learn from it.

[DeanMcNamara]

You are not wrong.

[muppet]

Thanks Dean for being very up front.

[DeanMcNamara]

Thanks. I am hoping by getting the word out not too many others follow me down this slippery slope.