Did the lawyer explain about priorities and that your interest would be secondary to any mortgage? You might have a claim against the lawyer – don't worry this is what they are insured for.

I assume both mortgages were in place before you placed your caveat? (otherwise they probably couldn't have mortgaged). Di you lodge a caveat immediately on exchange of contracts?

When you say you have a licence agreement – what does this cover and did you also have a contract of sale for the land?

What state is the property?

Sorry Freddie. Don't think you can do much. Probably best to seek legal advice, and take it from there.

Maybe best to stop paying the vendor now. Write to them and ask them to provide a pay out figure and ask them how much is owing secured on the property – not that they will tell you the truth.

Doesn't sound good.

The bank will call in the guarantee for the business – if they actually owe money, it could be undrawn (unlikely!)

If the business failed then they are likely to be in trouble. Even if the are not pursued for company debts they will be for this loan. They are probably unlikely to have the cash to pay for it. Depending on their financial situation they may default on the loan for the property too. If they have other assets they may use these to stay afloat or pay out the overdraft.

If not then the bank will likely sell the house to recover their debts. You could be first in line to buy but the bank will want the full amount owed to them plus costs.

The bank's claim on the house will take priority over your claim I am afraid.

The vendors won't stop settlement, but their lenders will if they have used the property as security with a mortgage.

A mortgage lodged before a caveat usually takes priority.

Is the property owned b the company?

Thanks Plummer.

Very good points you make.

In that case you would want to pay off your debt on the main residence first prior to the LOC as this wouldn't be deductible.

Hi PN,

I can put you on to accountants that i work with in Sydney who would charge much less than that.

Its possible to get 90%

I also found that when typing on my iphone, in reply to a message on this forum, you type away and then it takes about 2 secs for the characters to appear on the screen. Doesn't seem to happen with other forums. And then the curser jumps around – which could be due to my fat fingers.

Sounds like you might doing things wrong with that LOC. You have structured it so that it is not tax effective. You are paying down, but are you taking money out? Do you have any non deductible debt?