Hello there
Advice would appreciated in the current situation I am in.
My wife and I placed a 10% deposit ($37k) on a 310sqm land in south west Sydney.
It is a house and land package, initial total being $610k (370 land, 240 build). A $13k deposit has been placed with the builder.
The land deposit was made in February 2017. The sunset date passed in September 2019, where the developer extended the sunset date to June 30, 2020, where we had no say in the matter. If we rescinded at that point, we would lose the deposit. At that point in time, they had agreed to place a new clause in the contract, where we have the right to rescind and keep the deposit, if registration is not made by June 30.
Actual work on the subdivision only started in late 2019 (right after the sunset date of September 30), meaning that no civil work occurred in the whole 2.5 years after the deposit was made. The only thing they did was demolish the existing building(s) and removed trees. It is worth noting there are a total of 57 subdivisions in this lot, so quite a lot of work to do.
As of today, we have been advised that the registration will not occur prior to June 30 - expected registration July/August.
It is worth noting that we were told the registration would occur in April 2018. Over the past 3 or so years, we have received little to no communication on the status. We have constantly been pushing for updates, often resulting in a brief response months later stating that registration is again delayed with no explanation.
We have no faith that the developer will register by this new said date.
The builder has increased the price by 2.5% on two occasions due to the delay (approximately $25k total).
We do not have a current build quote, however the builder has advised "they will try to keep the price the same" e.g no further increase.
The current options that I see:
- take back deposit after June 30 and buy another piece of land and try to use the same builder, potentially keeping our $13k deposit with them.
- take back deposit after June 30, buy an existing house, most likely lose the $13k deposit with the builder.
- take back deposit after June 30, don't buy anything and wait out to see if the market drops as anticipated due to the current pandemic, most likely lose the $13k deposit with the builder.
- don't do anything. hope that the land developer actually finishes this year and continue with the build.
I hope this information is clear. Please let me know if you need any clarifications.
Thanks for your time :)
Adam
You should really consult your conveyancer or a lawyer, it might cost you $500 to $1,000 but they can provide sound advice based on where you stand contractually and what your contractual options are. From a non-legal perspective, you are not getting a good price (cannot confirm depends on the house size and finishes but it is a very standard market price) along with this the developer and whatever issues they are facing (2.5 years tells me it is financial (lack of financing or cash flow) or legal (issues with a neighboring land owner and or council). I would pull the plug and find something else but first consult the layer to see how much deposit you can get back and when. What is the name and suburb of the development?