When we act for a Vendor, here’s one of the ways we ensure a Purchaser cannot get out of a contract after exchange …
One of the voluminous number of laws that relate to the sale and purchase of real estate provides that a vendor must attach to the Contract for Sale of Land certain “prescribed” documents. These documents are known as “Vendor Disclosure” documents.
The law states that if the vendor fails to attach any one of the required Vendor Disclosure documents to the Contract, the purchaser can rescind the contract (that is, the purchaser can cancel the contract and the contract becomes null and void) at any time within 14 days following the date of exchange of contracts.
This is one of the reasons why we at Turnbull Hill Lawyers are pedantic about ascertaining exactly what the relevant Vendor Disclosure documents are (for a particular property), and then ensuring every page of every relevant Vendor Disclosure document is attached to a Contract for Sale of Land. Attention to minute detail is a must! When we act for a vendor, we certainly do not want the purchaser being able to get out of the Contract on a “technicality” once a Contract has been exchanged and the full contract deposit paid by the purchaser.
The boot was on the other foot a few months ago when we acted for a purchaser who, after contracts had been exchanged, wanted to get out of the Contract and had instructed us to investigate and advise if there was any way he could call the Contract to an end and get a full refund of his 10% deposit. His purchase Contract had been unconditionally exchanged 9 days earlier.
The first thing we looked at was whether the vendor’s lawyer had attached all of the required Vendor Disclosure documents to the Contract for Sale. We quickly ascertained that the vendor’s lawyer had missed attaching one of the Vendor Disclosure documents, being one of the documents buried in the description of various documents in the Second Schedule of the Computer Folio Search (i.e. Title Search) – and therefore we were able to serve a Notice of Rescission of Contract on the vendor’s lawyer. This Notice had the effect of immediately calling the contract to an end … and our client obtained a full refund of the 10% deposit he had paid. Our client was delighted with the result!
The vendor would almost certainly not be a very happy chappy (to say the least!), having lost his purchaser, and his future sale proceeds, after believing he had an unconditional exchanged contract with the purchaser!