Renege on purchasing a new property which had an "unconditional deal" clause

[Aidan]

I was wondering if anyone had experienced a similar situation and what are the legal implications.

My defacto partner signed a contract to purchase a land and house package with in a new development in Mandurah. She paid the deposit and the block is due to settle in the next month when titles are issued.

Unfortunately, she is unable to raise the finance to pay the purchasing costs. She contacted the developer to inform them of this and thought she would loose her deposit ($10k) but would be let out of the contract.

However as the contract stated that this was an "unconditional deal" I've been told that there is no way out and if she doesn't pay she will be sued.

The bottom line is we have no way of paying and I have had a letter drafted by a lawyer to this effect.

Anyone else been through this? Are the developers likely to sue?

Any advice greatly appreciated,

Regards,

Aidan

[Re@der]

You could sell on again or take a partner and perhaps play for time with the developer to help.
No doubt your lawyer told you that the contract was binding or not when he wrote your developer a letter appealing for his mercy, unfortunately developers also need money to pay their bills so this is unlikely. You should really ask this question of your lawyer who could go through the assetts of your partner which could be seized.
Where is Mandurah?

[Aidan]

It's in Western Australia and yes we have been trying to onsell the block for months.....

As the market here is in decline the block has now been valued at around $70k less than what she will have to pay.....

[robbyp.]

It's in Western Australia and yes we have been trying to onsell the block for months.....

As the market here is in decline the block has now been valued at around $70k less than what she will have to pay.....

Thats why they dont want to let you out of the contract. Maybe you could buy yourself out by offering $100k to to developer to account for the loss the developer would take. However it sounds as if they were overpriced to begin with, and the developer did a 'very good sales job on the buyer.

[drelly]

Ouch... nasty situation. The developer is probably between a rock and a hard place. He is likely to have the same sort of chances of reselling it as you are. So from his point of view, I'd either want to be paid enough money to go away or I'd think I had nothing to lose by chasing you for the money. If you had assets that could be liquidated, probably the latter but if the builder is in trouble and the chance of getting money out of you is small then he could consider a buy-out. You're probably going to get hit for late settlement interest so bear this in mind. If you have joint assets, you could end up being liable for the land, ongoing legal fees and considerable late payment interest. It's in everybodies interest to sort it out sooner rather than later.

[tpr2]

Anyone else been through this? Are the developers likely to sue?

Any advice greatly appreciated,

Regards,

Aidan

Try several thousand Blue Chip Investors.

Unfortunately the developer will have the right to sue and in the current climate probably would.

Do you mean Mildurah rather than Mandurah?