No magic bullet for sunset dates
Referring to the recent High Court case where a falling market saw an unsuccessful purchaser forced to pay the difference in the amount he'd settled unconditionally on before losing the property deal, Vina Singh of BSA Law, says she has sympathy for the purchaser, but says both parties are affected by changing market circumstances. It can go either way.
In 2007, Yanxun Sun had a 12-month settlement period on a Karaka property which he'd agreed to pay $1.1 million for, when banks were lending 80% finance. A year later, the bank revalued it for $1.05 million and would only lend 50%. Sun couldn't get the finance to make the deal go through.
He lost his $55,000 deposit and the property was sold to someone else for just $750,000. Sun was forced by the court to pay the $350,000 balance plus the deposit to the vendor.
Singh says the important thing arising from this case, is that purchasers must be very careful in how they tie up their finances.
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