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September 2, 2003 - 4:13 am

quote:

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Terry said:
I recently found that 2 of those properties that I had loans for with ANZ had a major problem. The titles were not in my name-18 months after being purchased. After many phone calls and complaints etc, I found out that ANZ had not transferred the titles.

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What did you mean Terry? The titles would always have been in your name regardless of whether there’s a mortgage on the properties. Isn’t it your settlement agent’s responsibility to deal with this?

Cheers
M

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September 1, 2003 - 4:59 pm

Hey amy,

Great to see that you had a good outcome. Congratulations.

One tip for you and others who come into a similar situation in the future. Get the agent to confirm the vendor’s acceptance by fax. Just a simple fax saying “the vendor has accepted your offer” should do. That way, you’ve got written notice of acceptance. This is likely to constitute a valid and binding contract (depending on the particular property laws specific to each State).

Cheers
M

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August 30, 2003 - 10:47 am

Hi Johnny,

I disagree with you on your definition of “agent”. At law, an agent has an obligation to act in the best interests of his or her principal (ie the seller). The agent does not have any legal obligation to look out for the buyer where it would be detrimental to the interests of the principal.

Of course, a professional and ethical agent would want to try to achieve a win-win situation for seller, buyer and agent.

That said, many agents appear to look after only themselves, and both seller and buyer get burnt.

Why do they get away with it? Because most of the people who deal with them are mums and dads and normal people like you and me, who don’t have the time, resources or inclination to pursue an agent through legal avenues (which is where it’ll hurt them the most – their hip pocket). Let’s face it – suing someone is expensive and emotionally draining. And it could drag on for years before you finally get your compensation. Most people would rather just count it a lesson learnt and walk away.

Cheers
M

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August 29, 2003 - 10:20 am

Arty – that’s my day job. And sometimes my night job too []

Maybe you need to find a good, aggressive lawyer.

You also need to know what you want. I keep telling people that most lawyers are only as good as what you tell them to do.

You need to tell your lawyer that you want to recover the deposit from both the agent and the buyer – send them a warning letter, and issue proceedings 7-14 days after. If it’s as straightforward as you described, tell him to seek summary judgment as soon as legally possible.

I don’t know the full circumstances of your situation, so I may be wrong – maybe there was a defect in the sale contract or the agency contract, or the conduct of the parties – that’s what you need your lawyer to tell you too. If he tells you that it’s got a 50/50 chance of success but doesn’t have a good reason for that opinion (eg a specific clause in the contract), ditch him and challenge him on why you should pay for a shoddy job.

Cheers
M

P.S. Here’s the lawyer blurb – this post is not intended to and does not constitute legal advice – I’m merely trying to point you in the right direction so that you can get some good legal advice.

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August 29, 2003 - 10:04 am

I agree with Richo. The purpose of the forum is to share ideas, but you can’t simply log on and expect to find a step-by-step how to guide on investing in properties. Books several hundred pages long are written about that topic. It’s a bit simplistic to think that you could meaningfully condense all that into a handful of postings.

Regi – read up on some good property investment books. Some of my recommendations are: Rich Dad’s Guide to Property Investing (Dolf De Roos), 0-130 Properties in 3.5 years (Steve McKnight) and that Neil Jenman book (I think it’s called Don’t Sign Anything). They all give you different perspectives on property investment, from people who seem to be very successful property investors. I think the one key thing to remember is that there are many different ways to do well in property. It really depends on what you want – quick capital gain, gradual capital gain, positive cashflow, negative gearing (yes I know many people say this is bad), etc. And it also depends on your temperament and personality.

You need to go out there and do the research yourself, then work out which method is the “best and easiest way” for you. Spend a few hundred bucks of that $25,000 working out how to do it properly, rather than just relying on what someone tells you, and risking blowing the entire lot on the basis of bad or inadequate advice.

Cheers
M

P.S. Hey Richo – congratulations on becoming a moderator! Does that mean you have to do shifts with Sooshie and AD?

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August 29, 2003 - 1:24 am

Arty – sounds like negligence to me. REIV is not the way to go. Remember that they are an industry body formed and run by real estate agents. You should be talking to a solicitor about commencing legal proceedings.

Rowan – everyone scoffs at us lawyers when we tell them to get releases from open-ended contracts. But I think your example clearly highlights the need. Even a letter from the real estate agent confirming that your contract with them is terminated may be good enough. But you needed to extract that when they were still trying to get you to sign up with the other agency, because that was when you had the upper hand. Fortunately, it’s only a $1,500 lesson.

Cheers
M

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August 29, 2003 - 1:10 am

Hey Sooshie,

It looks like he may have to hire a bankruptcy expert (many medium and small accounting firms have such people, and other practice in their own outfits – look under insolvency practitioners in the Yellow Pages) and try to come to a formal arrangement with his creditors (the formal name varies between states). It’s not bankruptcy, so he saves face, but it is still recorded against his credit rating. The benefit is that it gives him some degree of protection against creditors who then cannot sue him for payment of the full amount owing up front, but have to accept payment by instalments. If his situation is really dire, they may even be forced to accept less than 100 cents in the dollar, because the alternative would be that they get substantially less.

Of course, it’s still a black mark against his credit rating, and he’ll find it hard to ever borrow money again, but maybe this is a good thing.

The other problem is him – if he refuses to accept that there’s a problem, he may refuse to accept any such help. However, businesses and companies go to these people all the time when they hit the wall, because getting out of the cr@p is better than going bust.

All the best.

Cheers
M

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August 28, 2003 - 12:15 pm

Sooshie,

Sounds quite sad. Especially if he refuses to accept that he’s doing anything wrong. People with a “victim” mentality often seem to feel that the world owes them a favour, so they’re entitled indulge in what would otherwise be unacceptable (whether morally, ethically or legally) conduct.

Maybe he needs to know that a conviction for fraud usually carries a hefty jail term. I think the maximum is 5-7 years. I for one would not want to risk becoming Bubba’s long term beyatch in the clink. Then again, if he is thinking the way you’ve described, he’ll probably convince himself that he’s innocent and will never be convicted.

Alternatively, if he cares for his family, maybe he needs to realise that if even one of the banks cottons on, it’s all over (unless the 3 mortgages were slapped on with the consent and knowledge of all the banks) and his entire family is going to get tossed out on the streets – wife will be humiliated and kids don’t want to show their faces in school.

I hope this has a happy ending.

Cheers
M

P.S. technically, you could have a legitimate triple mortgage, with each mortgage having a different ranking priority. But practically, why would you? If you could borrow the money from three banks, why not just borrow it from the one?

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August 28, 2003 - 12:02 pm

Good point Terry – in that case, if the bank asks you and you state “No”, when in fact the answer is “yes”, I still question whether a charge of fraud can be successfully brought, given that the bank has a copy of the contract which shows the existence of a rebate. However, it’s likely to be a breach of contract in any event, which may allow the bank to pull out of the loan (if settlement hasn’t happened yet) or to demand full repayment of the loan immediately.

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August 27, 2003 - 5:36 pm

Hey Shelley,

Where in Perth is that property that you bought? Just curious. Email me if you prefer on [email protected]

Thanks
M

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August 27, 2003 - 5:12 pm

Hang on there! People seem to be freely bandying around the “fraud” word. Do you really understand what that means? Fraud as I understand it is to gain a benefit by making false representations.

If, as Shelley described, the entire transaction, including the cash-back deal, was in the contract, how can you say it’s fraud? The contract is given to the bank, who is a sophisticated and professional business. Not the village idiot. I think that it is reasonable to proceed on the basis that the bank has notice of the arrangement once you give them the contract. I personally guarantee that any bank who tries to claim that they didn’t read a contract properly, and should therefore be excused from honouring the loan agreement, will be laughed out of court. By analogy, if you signed the bank’s loan agreement, do you even think that you’re going to get off the hook by saying you didn’t read something in the contract? I don’t think so.

I’m sure Stuart is right. Maybe it’s a slip-up by the bank. But since when are borrowers under a duty to help the bank read a contract? Why are you second-guessing the bank?

And I can’t see how any competent solicitor who is presented with a deal like Shelley’s would even spend more than a passing thought on whether or not it’s illegal, because there’s no question of illegality at all.

Cheers
M

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August 20, 2003 - 2:04 pm

Try a law library (in a university with a law school), and look up books on property law.

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August 19, 2003 - 9:41 am

Hey that’s great for you westan. It would be nice to have more of a supportive environment like you do. But we do what we have to do, despite what others say.

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August 19, 2003 - 5:54 am

Thanks for your reply aussierogue. I think you’re right for the majority of migrants. However, if most +ve cashflow properties are in the lower price brackets, that may well be good news for the low-end rental market, and hence +ve cashflow investing.

Cheers
M

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August 19, 2003 - 5:51 am

Hey I’ve been censored! And I wasn’t even using a rude word, although I can see how you could extract one from it. In the interests of protecting my good name, I was only trying to say: “s-w-a-n-k-y”, meaning “flashy”, or “high-class”.

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August 19, 2003 - 5:49 am

Good point trueblue.

But will there be enough migrants to fill the gap?

Given all these cash-rich baby boomers moving to the country to eat a lot of peaches, maybe I should start investing in developing a swanky retirement commune in the country…

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August 19, 2003 - 5:44 am

I agree with Rod. It’s part of the cost of buying the property, like stamp duty and settlement fees.

Cheers
M

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August 19, 2003 - 5:41 am

All this talk about baby boomer exoduses lead me to ask a question – if all these people are swarming out of the city into the country, where does that leave city properties?

Cheers
M

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August 19, 2003 - 5:39 am

Good on you truska! It’s good to hear success stories.

Hang around some more and share your experiences.

Cheers
M

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August 19, 2003 - 5:34 am

Any improvements on the land (that includes any buildings, fixed structures, etc) becomes part of the land. ie the owner of the land owns the improvements, even though someone else may have built those improvements or paid for them. The lessee of the land merely has the right to use and occupy the land and any buildings on the land.

The simple answer to your question is that the Crown will own the land and the buildings from day one, and if the lease runs out and is not renewed, it simply means that you lose the right to occupy the land and the buildings – that right goes back to the Crown.

Your next question may be: “hang on isn’t it unfair for the landlord to get a windfall?” There’s a complex body of law (is there any other?!) dealing with such issues, such as unjust enrichment, restitution, etc. I can’t give an accurate account of all this stuff in a posting (or without having to do some extensive research, for that matter).

Cheers
M