How do you buy a land that is not yet titled off someone?

[jack2016]

Hi sorry if it is very unclear, I am just wondering how money changes hands when a land is not titled and vendor only has paid a deposit to the developer?

Say vendor bought land for $250k. Paid developer say 25k deposit, and 225k due upon title which is say in 6-12 months.

Now if you buy if off vendor for 300k for example ...

Are there any special clauses you need to include in the S&P?

[Nick G]

Subject to title being issued.

If you're buying, I would definitely have a sunset clause on that sucker.

[John the builder]

if bank is involved they wont hand money over till title available as they cant get mortgage registered assuming you cant register to existing title?

I knew a case where title never eventuated and S and P was left hanging with deposit left with agent

[jack2016]

Hi thanks,
Sorry I didn't get a notification and wasn't aware of your helpful replies.

So I am suggesting that the contract does not bind until title is issued? There will be no agent fees as this is a private sale.

And if I may ask what's the best way to word the sunset clause on this? The title is due "sometime in the second half of 2019".

Regards

[John the builder]

the wording is critical and a lawyer is required to get it right.

[jack2016]

I just heard from the other party's lawyer that the money goes to vendor's lawyer who then pays the developer's lawyer.

Now I don't really want to pay the vendor's lawyer all the money to sit there for 6 months ... there must be a way to word the S&P so that i don't pay anything more than a deposit until title is issued?

[Nick G]

That doesn't sound right. You would pay a deposit, it will be held in trust, but you won't settle until title issued. This is all very common so have your solicitor draw up the classes for you.