You don’t have a contract until it is accepted = exchanged. So putting a time limit on it may speed things up.

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Look at a discretionary trust too – for asset protection and flexibility.

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CT you would have to talk to your lawyer about that.

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Capital growth is what will make you rich. Don’t sacrifice this for a few extra dollars in rent.

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It could take a while.

If they fail to settle, I guess you would issue a statement of claim. You have to go to court, fill out some forms, and have them served. They will be notified to attend court. If they don’t attend, you could get a default judgment. If they do attend, then the court officer will ask if you have settled the matter? If no, they may say go outside and talk about it. If not resolved, then they will list the matter to be heard on a future date. This may be another month later. You will be asked how many witnesses will be called etc. I have sued someone, but it never went this far, so not sure what happens next. I think you turn up on the day, and you present your case, and they present theirs. You may then get a decision = a Judgment.

Even if you are able to get a judgment, then you need to enforce it. They may not pay you, so then you have to take further action including applying for the sheriff to go and seize their goods or garnish their wages etc. You can get them into the court and get them to list their assets too – so you know if they can pay and possibly what you can go for. This is called an examination summons.

If the judgment debt is over a certain amount, I think $2000, you can apply to have them bankrupt. They must respond to the notice of bankruptcy within 28 days. Usually this jolts people into paying.

Costs will depend on how far it goes. Issuing a Statement of liquidated claim costs around $150. But this also depends on how large the debt is. To serve a document can cost from around $20 to $100. You can actually go to court on your own. No real need for a solicitor. Just read up on it, and maybe attend a few beforehand to know the procedure.

And, if you don’t know where they are located, there may be expenses in finding them as if required (sometimes) to serve documents on them. eg. Notice of Bankruptcy has to be served to the actual person.

If they resist, the whole thing could take up to a year – especially if they use delaying tactics. Things usually never get this far, as most would be concerned about rising legal costs and losing and being forced to pay the other parties costs. So many give in and make an offer early on.

What state are you in? This is what happens in NSW, other states may be slightly different.

I would suggest you get a book on contract law (look for stuff in second hand uni bookshops) and look at local court websites etc.

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You probably have a binding contract if you have gone that far, so the ball is in your court.

I think you have the following options:
a) You can let me off without penalty, or b) let them off with an agreed amount or c) you can insist they settle as per the contract. If they fail to settle you can sue them for breaching the contract. You had better check with your solicitor. Not sure how much you could claim if suing but you should be able to at least claim for all the expenses incurred.

Good luck and let us know what happens please.

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Macquarie are good, but they are securitised lenders which means all over their loans are mortgage insured. even LVRs of 1%. Macquarie usually pay the LMI so the client may not realise.

If you wish or need to start using No Doc loans you have to plan ahead. Virtually all No Doc (and Low Doc) loans are mortgage insured, even the ones with the big banks. There are only 2 major LMI companies and they have restrictions on how much they will lend. They also have policies on not approving your No Doc loans if they know your income and you cannot service. eg. If you declare a $50,000 income with, say, Macquarie on a full doc loan application, then go to RAMS and try to get a No Doc loan, you don’t have to give your income details. But if you actually need $51,000 income to service, the RAMS mortgage insurer maybe the same as the one with Macquarie, and they will know your income and they will have to decline your loan because they know you cannot service.

So that is why I suggest using the big banks first where possible. Try to avoid LMI. Then when you hit the limit, start to use No/Low Doc loans. If you were to do this, start borrowing in one name only (not jointly with a partner). This will greatly improve your borrowing ability.

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And I should add, to make it even better, with a hybrid trust, my mate still could have claimed all the interest against his own income.

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Bo, that may save a few hundred or maybe even thousand of dollars now, but could cost dearly later on.

I have a mate (just one[blush2]) that is earning $100K pa, while his wife doesn’t earn a cent. He bought a property in Perth 2 years ago, and put it in his name to save tax. He just sold it and has a $150,000 capital gain. But guess what, this all (after the discount) has to go to him. His poor old wife can get nothing, so he has to pay a fortune in extra tax.

At the time I advised him to look at using a hybrid trust. He didn’t listen! It could have saved him around $46,000 in tax!

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You generally pay when complete, which may be years down the track.

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