HI

I don't have any links. You would have to look into some legal books. Maybe do some google searches on "mortgagee in possession". Find some legal cases.

I read a new case today, from VIC or SA where a mortgagee sold a house for $1000 because there was no reserve set at the auction. There is a court order in place preventing settlement at present.

If you are the person from the other thread then the problem arose because you knew there was a caveat on the property but you went ahead with the purchase. That would have been why it was on the market so long.

No use in crying over split milk now. You may have to wait a bit longer and then try to negotiate with the bank.

There is another recent thread on here regarding a caveat and settlement problems.

The bank will be holding first security so their interest will take priority. What they will do will depend on how much the shortfall is etc. If it is a little bit then they may just allow the sale to proceed and they may try to recover the rest from the owner. If it is a fair bit and they think the house has been undersold they may try to resell the house again or try to get you to pay more.

Once the mortgagor takes possession then I think your contract will no longer be binding I beleive

hi James

Sounds like an idea, but why offer him so much?

I think you should have written loan agreements drawn up. You need to worry about divorce, death and insolvency. eg. Dying – imagine if you died with his money in your account. Bank accounts would be frozen until probate is granted which could be 6 months or so. Now imagine if he died with the money in your account!

No, doesn't make sense.

Guarantees do appear on your personal credit report and subsequent lenders will see them and ask about them.

What about the other partners? did they contribute their own funds separately?

She needs to see a lawyer, the accountant can only help on the tax side of things.

My view is that she will be responsbile for 6 years rent (or the remaining term) for the whole amount, unless the other partners pay it. The partnership could be disolved but the contract will remain unless it is renegotiated.

Once she ceases the business then the interest on the $70k may no longer be deductible (this the accountant could help with), depending on her circumstances.
see TR 2004/4
Income tax: deductions for interest incurred prior to the commencement of, or following the cessation of, relevant income earning activities
http://law.ato.gov.au/pdf/pbr/tr2004-004.pdf

That book is incorrect.

Having a trust, while a great idea, will not help you borrow more.

You should be able to take early possession if the vendor is still offering it. But there is a chance that the vendor will not settle and then you may not be able to complete the sale. Do you know what the problem is?

Have a good read of your contract and see what it says about the charging of penalty interest.

Good idea to use a lawyer rather than a conveyancer too as it comes in handy when problems arise.

What property?

St George

Wouldn't it be the same?

banks only charge you interest once per month. Whether you pay this weekly or monthly it will still be the same amount.

If you pay anymore it will be coming off the principle of the loan.