Breach a contract of sale SA.

Mon Gol on 05/06/2016 - 20:44
Last edited 05/06/2016 - 20:45

Hi guys, need your advice.
A friend of ours is in the process of buying a house. He made an offer for one house and the offer has been accepted. He had sign a contract of sale which has now been signed buy the seller and delivered to our friend. But just after he signed this contract, he liked another house (better location and condition, but higher price) again, he made an offer and it has been accepted. He needs to cancel the first contract now but not sure whether he will not be punished by the vendor (fees, etc). Form 1 has not been signed yet and deposit not paid.
Question - can he cancel the first contract without bearing any expenses?

He is in Adelaide.

Thank you.

Home & Garden

Comments

  • shrek4 on 05/06/2016 - 20:55
    +1

    The time the Form 1 is served on the purchaser will affect their cooling off rights. If the Form 1 is provided before the contract is signed, then the cooling off period will commence on the date which the contract is signed. However, if the Form 1 is not provided until after the contract is signed, then the cooling off period does not start until the Form 1 has been served on the purchaser. Also, should there be any inaccuracies in the Form 1, then it is deemed to be defective, and will not trigger the cooling off period. A vendor can alter the Form 1 to correct any inaccuracies, but the cooling off period will only commence on the date that the corrections are made.

    If the Form 1 is not served on the purchaser, or the one served is inaccurate in some way, then the purchaser will have the right to rescind the contract at any time up until settlement. Therefore, it is important for the vendor to ensure that a complete and accurate Form 1 is provided to the purchaser in a timely fashion.

    From http://www.lawhandbook.sa.gov.au/ch23s09s01.php 30sec to google.

    • mskeggs on 05/06/2016 - 21:00

      Saved me 30sec!

  • shrek4 on 05/06/2016 - 20:58
    +1

    To be honest I think it is bery poor form to make an offer, sign contracts etc then keep looking etc. Worse still, try to find a loophole to get out of the first contract (which they agreed to and were happy to proceed with) then sign a second contract for another property.

    Having sold our house in the last 2 years, I can imagine what the vendors are going through and the added stress etc this is going to bring them.

    • mskeggs on 05/06/2016 - 21:02

      IT is all very stressful. I once sold a property as I was moving overseas, but after weeks of mucking around the sale fell through. Very upsetting.
      Luckily, I ended up selling for a better price, but the stress was unwelcome.

      • Mon Gol on 05/06/2016 - 21:03

        Agree. It is stressfull for both parties.

  • holdenmg on 05/06/2016 - 21:00

    Hi,

    The REISA Website indicates:

    Cooling off Period and Form 1
    http://www.reisa.com.au/publicinfo/steps-in-the-selling-proc…

    To assist consumers with real estate queries, REISA operates a free information service – REISA Query Connect on free call 1800 804 365, between the hours of 9.00am to 4.00pm each weekday. This service is staffed by knowledgeable real estate professionals with many years of practical experience.

  • Mon Gol on 05/06/2016 - 21:00

    Yes, his understanding is that until the form 1 is served he can step out from the contract. He is just not sure whether this is correct.

    • mskeggs on 05/06/2016 - 21:03
      +4

      I recommend taking advice on this from a free web forum.
      There is nobody available tomorrow morning who could offer better advice.

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