Purchaser Defaults On Settlement Day

[Lauren69]

Sold our property and have purchased new property.
Purchaser hasn’t paid on Settlement Day and have been given another 12 days to settle. Meanwhile, we are incurring Penalties on the new property.

our property has been on sold several times since we signed the S&P Contract yet, we have not been Paid Out and could now possibly lose the new house and our Deposit.

Shouldn’t the Purchaser that Signed the Contract with us be liable to Pay us out?

Why are we the ones being put in this situation and being penalised, when our Contract is with the Original Purchaser not any other parties?

Thank you to anyone that’s able to shed some light on this matter

[donna]

Hi Lauren

there is penalty interest that the buyer pays you for ever day after settlement date - until they settle.

what’s your lawyer say?

how long was the settlement?

cheers

Donna

[Lauren69]

Hi Donna
Lawyer issued Notice and they have been given another 12 days to settle. After that we aren’t sure what happens.

One of our biggest questions really is why haven’t we been paid out as it has been On Sold 3 times now.

[Lauren69]

Settlement was 12 weeks

[John the builder]

did you sell to original purchaser "or Nominee" ?

[Lauren69]

We sold property through real estate agent and have a Contract, signed by purchaser.
Original purchaser then on sold it, then that person on sold it and they’ve on sold it and now it seems that person has put it back on market.

[donna]

Hi Lauren,

How can the property sell 3 or so times when it had not been settled by you the first seller?

I'm referring to the Property Title. It should still be in your name - as the settlement has not happened.

Therefore - only you legally own the property. Only you can sell the property. Settlement is about monies changing hands and thereafter the property title owner is updated.

I get you're trying to get the purchaser to pay you - but if they don't you have options (your lawyer will know what they are). The property title is yours and as the legal owner only you can sell the property. There are no other legal sales transactions as the person trying to onsell doesn't actually own the title.

This is the basics and you need to make sure your lawyer confirms your legal status as the owner of the property title.

Once you have had confirmation - if the 'buyer' doesn't pay they're in default - your lawyer will tell you what that means. You can seek penalties and my understanding is you are fully within your right as the legal owner to sell your property.

I did do some tertiary study of property law at Uni. however, I am not a lawyer nor a conveyancer so check with a lawyer. If your lawyer is not forthcoming with the information you need - go to another one.


Ask to see the current property title so you can see you are the owner.


cheers,

Donna

[John the builder]

But if it was "nominee" they may have assigned the sale to them? (also from a non lawyer) It sounds like this to me.

[McDuck]

Sold our property ..
Purchaser hasn’t paid on Settlement Day and have been given another 12 days to settle. ...
our property has been on sold ... yet, we have not been Paid Out
Thank you to anyone that’s able to shed some light on this matter

You need to break this problem into 2 parts.
Just deal with the first part. You fail to be paid.

Sounds like your original purchaser has defaulted on their part of the agreement.
So your beef is with them.
Sounds like your lawyer has served a 12 day settlement notice, as required by NZ law.

This deal looks like a bust to me.
It might work out, you never know.
As others have said, check your sale and purchase documentation for the words and/or nominee.

If this is some sort of House Flipping Scheme, where no one involved has any actual money in the game, it's going to get involved.

You'll probably end up cancelling the sale, keeping 10% of the deposit, and also sue for damages.

** not legal advice, just anecdotal.

Part 2. Your obligation
In future, if possible, put a condition when you put an offer on a house, with something along the lines of it being conditional on the sale of your own home.
Not easy in a superheated market.
In future, when selling a house, use great care when selecting which buyer you go with. You might take a slightly reduced price for a better payment deal. A bird in the hand and all that.
Again, not easy in a superheated market.

Anyway, the very best of luck to you. I hope it all works out (the easy way).

Side note.
I wonder what exactly constitutes a "sale" in legal terms. Is it, the agreement of intention alone, or is it only when payment and all other conditions have been met.

Side side note. Will the RE Agent still get their money?
Is it legal to inform the current agent, that the house is no longer up for sale, or must the 12 day grace period expire.?

I guess we'll find out in 8 days.
Please keep us in the loop.

Cheers McD

[Lauren69]

As far as I can tell it’s not nominee.

On Friday we notice our property has sold (again), but as yet haven’t heard anything from any agent.
We are trying to stay positive and hoping that it all settles this time round and that we get paid out so we can still get our dream home.

We do have an appointment with Litigation Lawyer on Monday and will be taking further action to recover any other expenses such as the extra lawyers expenses, container hire and transportation etc.

I will update once we know what happens on Monday

[donna]

Hi Lauren,

If you've done so already - read McDuck's reply.

Also, are the on-sales including the most recent - are they happening through Real Estate Agencies? Do you have a URL to the recent listing?

As McDuck says 'sold' means different things i.e. there may be a sold banner on a listing which may mean there is an agreement - but a property really is only sold when the settlement has been successful.

Did you ask your lawyer to give you a copy of the current property title - for peace of mind?

cheers,

Donna

[McDuck]

Just done some more research on this.
you might be in the middle of multiple contract buck passing, known as "assignment".


What Is an Assignment of Contract in Real Estate?
An assignment of contract involves transferring a real estate contract from an original party (also known as the real estate wholesaler or assignor) to a new party (also known as the assignee). It is also referred to as an “Assignment of Real Estate Purchase and Sale” agreement. This real estate transaction relinquishes all rights, obligations, and responsibilities of the assignor to the assignee when they close on a property. The assignor basically works as a middleman or contract flipper, selling their right to buy the property they are contracting—with equitable interest—in exchange for an assignment fee from the potential homeowner.
Meet One of Your New Instructors


How Does Assignment of Contract Work?
An assignment of contract occurs on a property that is currently under contract, and has not yet been purchased. First, the assignor finds a property, and enters into a sales agreement with the buyer to purchase the property. The home’s price, closing date, seller, and buyer are listed in this contract. When the original buyer finds a new buyer that can fulfill the original terms of the contract—like purchase price and closing date—they assign the contract to the new buyer. At this time, the assignor usually collects an assignment fee for finding someone to carry out the terms of the contract


see here below for details.

https://www.masterclass.com/articles...l-estate-guide

[chook]

Lauren, what about a deposit? did you receive it and how much is it?

[Lauren69]

We received a $50,000 deposit

[Lauren69]

McDuck,

trying to understand all of this, but I think everything is just blurring my brain.
I’m just starting to feel that we are going to lose everything.
According to estate listing it sold again on Friday, yet we still haven’t heard anything from anyone.

The 12 days is up tomorrow and we don’t know what’s going on or whether we will even be able to still purchase our dream property after tomorrow ????