The Facts
Buyers and sellers enter into property sale contract
In November 2020, two parties signed a contract for the sale of a residential property in Sydney. The purchase price was set at $2,350,000. On the front page of the contract, that both parties agreed to and signed, it was accepted that the buyers would pay a deposit of 10% of the purchase price, being $235,000.
Contracts were exchanged conditionally, subject to a ten-day cooling off period. The cooling off period was subsequently extended at the request of the buyers, but nevertheless expired on 12 January 2021.
From the date of exchange of contracts to the date for completion, the owners had only received $15,875 from the buyers ($219,125 less than the stipulated deposit). The buyers did not provide a valid explanation for their failure to pay the full deposit.
Property owners issue Notice to Complete
The agreed date for completion was 29 January 2021. On 1 February 2021, the owners of the property served a Notice to Complete upon the buyers, stating that ".should you fail to complete the contract for sale of land. [by 15 February 2021] then you shall be in breach of contract and the vendors shall exercise all other rights and remedies as are available to them".
When the sellers had not received payment by that date, they served a Notice of Termination on the prospective buyers and subsequently relisted their property on the market.
New buyers were found and the property was sold for $180,000 more than the price the original buyers had agreed to pay.
Sellers sue buyers for unpaid amount of deposit after deal falls through
Despite the gain they had realised in this favourable transaction, the property sellers sued the original prospective buyers in the Supreme Court of NSW, seeking to recover the unpaid amount of $219,125 of the deposit money from those buyers.
For their part, the original buyers argued the court should grant them relief against forfeiture of the deposit, as the minimal inconvenience suffered by the property sellers would make forfeiture of the deposit unjust.
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So, which case won?Cast your judgment below to find out |
Nathan Stack
Buying a house
Stacks Law Firm
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