Purchaser Defaults On Settlement Day

[Keys]

Wednesday will be interesting then.

[McDuck]

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 ????

Hi Lauren. Not legal advice , but..
I'm, guessing that no one , not even your Lawyer knows how this is going to turn out.

If the most recent sale of your house goes through in time, and the most recent buyer pays up in time, then you may get your dream house.

One good thing, you too have a 12 day grace period after your settlement date to come up with the money.

If it all falls over, then at least you can be fairly certain that the original purchaser of your old house is not able to squirm out of being responsible for costs, and that they have no right to sell something they didn't pay for.

There is one legal device they can use to squirm out of responsibility, but you would have to agree to this yourself.

They should have given you a 10% deposit , and that will go toward the 10% deposit you paid on your dream house., at least.

Possibly, the people you are buying your dream house from, are also using the money from your purchase, to buy their dream house.

Fingers crossed. McD.

[Perry]

Is there some particular reason that there is no word from some legal person involved?

[donna]

The deed of assignment needs to be agreed to by the vendor (i.e. you). Have you checked your S&P agreement? It's not a standard clause in Residential Property S&P agreements so the purchaser would have had to include it - and you the seller/vendor would have to agree to it.

Your lawyer is required to provide information on additional clauses and how they can be problematic to you and the sale. To sign an S&P your real estate agent is required by the REAA to check you have had legal advice etc.

However, you can of course say you agree to the S&P without legal representation. Odd as it is - many sellers sign the contract before showing it to their lawyer.

cheers,

Donna


P.S here is the source - and you'll see the Deed of Assignment is used mostly for commercial and business purposes for leases and loans.

[McDuck]

Hi Donna.

That's a great article you found, very smart author.

I've done a bit more research on this.


From what I can tell, your article is from the point of view of a buyer.
The flipper/buyer who wished to assign a contact. Not from the point of view of a seller.
From what I can tell, and I'm not a lawyer, ..
It looks like you can assign a contract without asking the home owner, unless there are clauses in the S&P contract about non-assignment.

The good news is..
From what I can see, the original buyer is still on the hook until the assignee ( second buyer) has paid for the property. and that's when the actual assignment contract, is complete.


Ps Lauren, how are you going?
Is your lawyer jerking you around?

[Lauren69]

Hey guys I appreciate all the input and advice from you all ????

Sorry but I did get the dates wrong as I forgot that there were 2 Mondays that were public holidays, the actual 12th day is Thursday (this week).

I have read and reread our Contract and I can’t see any mention of any ‘Assignment’.

As I mentioned earlier last Friday we noticed that our property had SOLD, so that gave us a little hope over the weekend. However, after my partner got hold of the lawyer and original RE Agent we were told yesterday that it hadn’t actually sold at all but has been WITHDRAWN, no explanation given and we don’t know what on earth this means.

Lawyers don’t seem to even let us know any updates unless we call them (which when we do they Bill us).

My partner is going to see a Ligation Lawyer later this week because we don’t feel that anything is going to be settled on Thursday.

McDuck, thanks for asking if I was ok. Honestly, the answer is NO!!!

The toll this is taking on us is becoming unbearable, my partner and I have been together 22 years and at the moment we hardly talk as neither of us know what to say to each other, we are just broken. Our 13 year old son is distraught and his anxiety is off the charts. As well as my anxiety being hard to control I’ve been experiencing panic attacks again, which I haven’t had for over 3 years and my brain is so tired from researching to the point that nothing is making much sense anymore. My partner is not focused at work (luckily he has an amazing boss) and is struggling especially with all the extra costs we are incurring.

I’ve been thinking of making a complaint to REA in regards to the RE Agent as I don’t feel that he has been acting in our best interests at all and hasn’t been up front with us or keeping us in the loop with what’s going on.

But again, I don’t think it would even matter or make any difference anyway, so what’s the point ????

Sorry for the lengthy rant guys

[donna]

Hi Lauren,

Question the actions of the RE Agent and your lawyer. Licensed real estate agents and the agents working for them have to adhere to a code of conduct.

A licensee must not mislead a customer or client, nor provide false information, nor withhold information that should by law or in fairness be provided to a customer or client

A licensee must act in the best interests of a client and act in accordance with the client’s instructions unless to do so would be contrary to law.

See the link below -

https://www.rea.govt.nz/make-a-complaint/ has the steps to take.

Your lawyer should have told you by now if the actions of the original buyer are legal and covered by the clauses in the contract. Maybe ask the question again?

cheers,

Donna

[McDuck]

.

The toll this is taking on us is becoming unbearable...

There's a good trick to prevent this.

You imagine the worst has already happened.

You imagine you go through the after disaster repair procedure.

For some reason the primitive human brain is satisfied with any sort of resolution, real or imagined.

[Perry]

I have read and re-read our Contract and I can’t see any mention of any ‘Assignment’.

As I understand it, assignment is not usually "in the contract." It is usually found with the signature.

Signed by Bob Smith
for Bob Smith or nominee.

---

Did you read this one when searching for answers? (Bold emphasis is mine.)

At the most literal level, a nominee is simply a person named by another. In the conveyancing context, a purchaser enjoys a common law right to require the vendor to convey the property to a person named by the purchaser. The traditional position has been that a nominee derives no enforceable rights by being named by the purchaser, and the purchaser can revoke the nomination at any time before the transfer is registered. Thus, despite the nomination, the purchaser retains all rights and obligations under the contract – the nominee receives none.
Nomination of a person to take title contrasts with other common means whereby an agreement for sale and purchase between a vendor and purchaser of land may ultimately result in a third party taking title. These means include an assignment of the purchaser’s rights, an on-sale with contemporaneous settlement and a novation of the contract.
By entering into an agreement with a purchaser ‘and/or nominee’, the vendor appears to have agreed to contract with the purchaser on the basis of one of the following positions:

• The vendor has agreed to contract with the purchaser;
• The vendor has agreed to contract with an unknown person (to be named by the purchaser after the contract is entered into);
• The vendor has agreed to contract with the purchaser and an unknown person (to be named by the purchaser after the contract is entered into);
• The vendor has agreed to contract on the basis that the purchaser may assign its interest to an unknown person (to be named by the purchaser after the contract is entered into), with that person taking over all of the purchaser’s rights and obligations under the contract; or
• The vendor has agreed to contract on the basis that the purchaser may assign the benefit of the contract to an unknown person (to be named by the purchaser after the contract is entered into), with that person taking over only the purchaser’s rights under the contract.

• https://thinkandgrowfinance.com.au/u...ominee-clause/

[McDuck]

There's a good trick to prevent this.

You imagine the worst has already happened.

You imagine you go through the after disaster repair procedure.

For some reason the primitive human brain is satisfied with any sort of resolution, real or imagined.

..........

[donna]

Perry I think you’re on to it - maybe look again in the signature Lauren.

To those who know the answer - is it legal to add “or nominee” to your signature when the “or nominee” is crossed out in the contract?

cheers
Donna

[Lauren69]

I’m going through the contract again now and noticing a few more things that I’ve come across in my research and from issues that you have raised I am now questioning a few things.
I will list them up in the next hour or so to seek your guys thoughts on some of them, mainly to see if I’m getting it right.

I totally appreciate all of your input and I probably would have lost my mind trying to make sense of everything and getting my head around it all, so I thank you ALL ????

[Lauren69]

Ok, here goes, so far lol………..

- Front page of S&P - it has
VENDOR NAME
PURCHASER NAME & at the end of that line it has AND/OR NOMINEE, which is circled and Initialed.
* So, does that mean that Name written is only the Nominee or is it the Purchaser?

** See below note on Schedule Page

- On pg 3 of S&P there is a section where the following Details should be filled in……

VENDOR - Contact Details, Lawyers Details & Email for Service
PURCHASER - Contact Details, Lawyers Details & Email for Service
LICENSED REAL ESTATE AGENT - Contact Details, Lawyers Details & Email for Service

The ONLY Details filled in is the DATE & the RE Agents, from what I’ve read over last couple weeks ALL these Details should be filled in, is that correct?

- On SCHEDULE 2 where both parties sign, under Signatures it gives Options to Delete & if NONE are Deleted the Signatory is Signing in their Personal Capacity.
As nothing has been Deleted, would that then mean that that person is indeed the Purchaser?

- If it is an Assignment, who actually pays the Assignor their Fee, the Buyer or is that all part of the Commission?

- When should the RE Agent actually get their Commission, does it get Paid out from the Deposit or when it all Settles?k

Time to put this to bed for the night and carry on tomorrow.

Again, thanks everybody ????

[McDuck]

Ok, here goes, so far lol………..

My best advice to you is to wait until after the twelve day grace period and then put more effort into it.
Go for a nice dinner or similar with your family and put this out of your mind for a while.

Here's a good website that will answer some of your questions.

https://www.settled.govt.nz.

Once this is all resolved, and if you're still interested in contract law and conventions, we can discuss that till the cows come home.
It's a big topic, but I really enjoy it and would be glad to run over the basics with you.

[Lauren69]

Thank you for your words McDuck, and I will try my best to keep upbeat and keep my family well.

But, I feel that today is going to be a hard one ????????????