All Topics / Legal & Accounting / Non Disclosure on section 32

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  • Profile photo of dr housedr house
    Participant
    @dr-house
    Join Date: 2001
    Post Count: 281

    we purchased a 9 acre country property recently.

    Most of the property, including house, shed, garage is to the rear of the property .

    the property is divided from the main road by a wide and seasonal creek , therefore cannot be accessed directly.

    Access is off the main road via a side access road to the rear of the property.

    when we enquired about the access road we were vaguely told that it was shared with the neighbour at the rear and maintenance costs were shared.

    There was no information about road access in the section 32 at all.

    we have now received an "access track agreement" from the neighbour, stating that we have to pay $500 per annum to use this road and the right to use the road can be revoked at any time by the neighbour who owns it.

    The real estate agent was aware of this issue as she obviously organized the agreement and then emailed it to us.

    Essentially we have no legal or physical access to the house.

    I re-read sect 32 conditions again and it actually states that no road access should be disclosed on a sect 32.

    I have now instructed my solicitor to cancel the purchase, although we are now only a month off settlement.

    so far the other party has replied that road access was discussed and we should have known this.

    I am waiting to see how my solicitor will respond.

    Has any one else experienced this and what was the outcome?

    it concerns me that this non-disclosure will potentially cost us mega dollars, as at some stage we would be liable for major infrastructure works to build an access road and a bridge to the house.

    Profile photo of livewildcardlivewildcard
    Member
    @livewildcard
    Join Date: 2012
    Post Count: 36

    Can you literally build a bridge and get over it.

    Profile photo of dr housedr house
    Participant
    @dr-house
    Join Date: 2001
    Post Count: 281

    well, maybe, we brought the property assuming access is in place.

    there is about 150 m of road to build in addition to a culvert or bridge across a very wide and deep creek bed.

    so cost will be significant.

    Profile photo of DWolfeDWolfe
    Participant
    @dwolfe
    Join Date: 2009
    Post Count: 1,253

    Bad!

    See how your solicitor goes, if you can get out with minimal outlay I would.

    If you are stuck – maybe explore the option of negotiating some sort of joint ownership with the neighbor (bring wine and maybe cake) so that you have no issue with being kicked out of the access agreement. Maybe some cold hard cash will help them decide that you would be nice people to share road ownership with. If you don't own any of the road the neighbor can wear all the costs – maybe use that as leverage.

    If you are even more stuck maybe negotiate with the seller to drop the price by what you estimate the access to cost eg $50k and hire a guy with a front loader to dig you a dirt track. If they really haven't legally disclosed everything, use that as leverage. The last thing they will want is for the sale to fall over a month from settlement.

    I hope this works out for the best, let us know how you get on.

    Cheers

    D

    DWolfe | www.homestagers.com.au
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    Profile photo of dr housedr house
    Participant
    @dr-house
    Join Date: 2001
    Post Count: 281

    thanks for advice.

    Yes we are getting a legal opinion.

    I have rung for quotes and the cost will be up to $50,000 of building a private access, which is probably the preferred option.

    The vendor has purchased elsewhere, so may be open to compromise.

    I think that given the non-disclosure, we paid too much and it will always be an issue, should a resale be required.

    I will keep you posted.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,190

    Don't know the situation in Vic, but you can probably terminate or rescind the contract if there was non disclosure like this.

    $500 pa is probably a reasonable figure for the neighbour too btw as you will be using his land and wearing out his driveway etc.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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    Profile photo of DubstepDubstep
    Participant
    @dubstep
    Join Date: 2012
    Post Count: 395

    I agree with Terry, $5000 for 10 years access as opposed to building a road is probably quite reasonable.

    What are you intending to do ?

    Profile photo of dr housedr house
    Participant
    @dr-house
    Join Date: 2001
    Post Count: 281

    My solicitor has requested we seek a barristers' opinion, still waiting to hear from him.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,190

    That may cost more than the licence fee!

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,018

    Agree with Terry.

    Spent a few hours with a Barrister many years ago over the weekend of the NRL Grand Finals and he charged us $17,000 for his time. Thankfully the project earned us 10 x as much as his costs but still not a bad hourly rate.

    Think twice.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
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    Profile photo of dr housedr house
    Participant
    @dr-house
    Join Date: 2001
    Post Count: 281

    just an update on the above situation.

    My solicitor had told me that we are up for a loss of deposit and any costs if the property sold subsequently at a lesser price if we rescind on the sales contract.

    i had submitted a revised offer of reducing the selling price by the cost of building access (road and bridge), the seller  didn't agree with the revise.

    After a lot of legal wrangling and just before settlement, the seller advised us that they had canceled the contract and sent us back our full deposit.

    I heard they had received another offer.

    so we are very relieved, as we feel that paying a good price on a property and being up for major access costs

    wasn't going to be within our financial means.

    the alternative of loosing a hefty deposit and being up for further potential compensation costs wasn't very palatable either.

    I think country properties, if you are not familiar with them, can be very tricky.

    we are going to sit tight now and not contemplate more property purchase for the next few months.

    Profile photo of jmsracheljmsrachel
    Participant
    @jmsrachel
    Join Date: 2012
    Post Count: 711

    That is a very good outcome. Well done

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