Hi,
I am not a lawyer, and I am interested in views on a scenario.
a)Vendor of property signs WA sale contract that has plant and equipment included.
b)Purchaser believes bore pump is included with property and considered plant and equipment.
c)Vendor wants to take bore pump, as they mentioned to REA as a condition of sale
d)Item not specifically excluded in sale contract, nor is the item explicity included in the contract as plant and equipment.In kangaroo court, my take would be that:
a) Vendor unwittingly signed contract that didn’t explicity exclude the bore pump.
b)REA failed to follow instruction of vendor
c)Purchaser should keep bore pump
d)The issue (as unfortunate as it is) is between REA and vendor.Any feedback please?
[cap]
J
I am not a solicitor either, but.
It seems there is a dispute over the interpretation of “plant and equipment”. The contract was with the vendor/purchaser, not the REA, so any communication should have been to you or to your solicitor not the REA. And this communication should have been done before acceptance of the offer (ie exchange?).
So I guess three issues standout:
1) does plant and equipment included a bore pump? If so,
2) can a communication to the RE agent mean communication to the purchaser. Maybe not, agent represents vendor
3) Did agent communicate that the pump was not included.Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Terry,
I think you nailing clarification of Plant and Equipment is required – also what is required to be explicitly defined, and what can be implied.
Another analagous situation I can think of is a swimming pool.
The swimming pool is advertised as a selling point – and I think you could reasonably expect to see a filter and a pump after the sale.
If the intention of the seller was to take away filter and pump, wouldn’t that be unusual and be explicitly defined as being excluded as a sale item in the contract?Cheers
JThat reminds me (for some reason) of an old Chevy Chase movie (ie a comedy). Chevy went to look at a house for sale and as he was shown through the place the vendor kept on saying they were taking the kitchen, taking the poo etc and then laughing. Of course, Chevy thought they were joking but when he arrived to take possession of his new house it was just a shell – stripped of everything.
When he complained, he was given a tape of the vendor clearing stating that the kitchen, pool etc were not included and were being taken by the vendors.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I was just flicking through a contract book (Essential Contract Law by Monahan) and it seems that if a contract is in writing, then it is assuming it is wholly in writing, and any party seeking to rebutt this has to prove that the contract was not wholly in writing.(p. 45). The authority for this is State Rail Authority of NSW v Heath Outdoor Pty Ltd (1986)(NSW).
So in your case even if the vendor did instruct the agent that the pump was not included, this differs from what is on the contract (plant and equipment included), therefore the burdon of proof rests on the vendor to prove that he instructed the agent.
If any term of a contract is not clear, then oral evidence may be admitted to clarify meaning (eg. of plant and equipment)
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Property contracts must be written to be enforceable. Plant and Equipment has such a wide-ranging definition. I think the pump will be included but believe it will come down to whether or not it is essential to the overall viability of the property. It sounds to me like it would be so the purchaser would have agreed to the purchase based on the inclusion of the pump.
In my mind, it equates to a vendor taking a spa bath out of a residential property after the purchaser has seen it and agreed to the purchase.
It is between the vendor and their solicitor (whoever prepared the contract of sale) as far as I am concerned. It has nothing to do with the Agent. They do not prepare contracts. They just sell property and have the contracts signed.
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
Essential LinksJust out of interest, what would a new pump be worth?
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
If it is $1, it is too much!
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
Essential LinksI understand the pump would be $1000 plus installation.
With that amount unfortunately, I think that the lawyer would benefit more!
[evil5]Cheers
JSo you need to decide whether it is worth the cost or not. Maybe this should be a lesson learned for next time.
It will not matter if you win or not, the lawyer always wins.
CATA
Why don’t you alter the offer to take the cost of a new pump with installation off the price?
Explain to the vendor that the contract was not clear and that it was spare everyone a lot of headaches?
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
Essential LinksLet us know what happens.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
So what happened???
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
Essential LinksAs much as I would have liked to puff my chest and say “Told you so” I let the pump slide… Risk was all dollars, Reward was self righteousness.
In hindsight, there was an innocence in the error, and Cata has 2 good points – the lawyers, and the lesson to sharpen up the contract – if I believe it to be essential to the purchase
Cheers
JThis all boils down to people’s intent, verbage and ‘you know what I meant’ vs what is actually written on the sales contract.
I’ve been bitten with this very scenario also (only once mind you – early on) and I let it go and made sure the lesson stuck. People have their little wins over you as you climb up the property investing ladder…just try and make sure they are small wins against you…like in the 1,000 range.
Bottom line for me, take plenty of time when you sit down with the Vendor’s agent and formally write up your offer. Don’t fall for the ol’ “Look I’ve only got 15 minutes before I dash off to a really important appointment, so let’s quickly write this thing up and I’ll submit it ASAP to the vendor.” I’ve had this happen quite few times over the years and the pained expression on the REA’s face when I ask him to go away and come back when he has more time. It’s far too important to rush it, or leave out specifics pertaining to the property.
I wish I had a dollar for every time I’ve heard the sett. agent say “Yes but, it’s not specifically stated in the original contract of sale”.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
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