How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Patrick H. Your Own Question
Patrick H.
Patrick H., Lawyer
Category: Australia Law
Satisfied Customers: 5410
Experience:  Dip Law LPAB - Sydney based lawyer
61534878
Type Your Australia Law Question Here...
Patrick H. is online now
A new question is answered every 9 seconds

We were going to purchase a residential building block in

Customer Question

We were going to purchase a residential building block in Orange NSW ($165,000). The blocks are currently NOT registered and not due to be registered until Sept/Oct 2016. We have paid a $5,000 holding deposit and signed a contract. We have now decided we do not wish to proceed and are happy to forgo the deposit. When we notified the real-estate agent / developer they said the developer has been caught out before and because we have signed the contract that he is forcing us to continue with the sale.
Is this right that he can force the sale?
Our solicitor said we have to pay our stamp duty soon? We are confused as we have not paid for the block yet. Do we have to pay stamp duty before settlement?
Submitted: 10 months ago.
Category: Australia Law
Expert:  Patrick H. replied 10 months ago.

Hello and thank you for your question.

Once you have signed a contract you are generally obliged to pay the duty within three months. If it is later rescinded then you can apply for a refund on the duty. You can read about your obligations in this regard here:

http://www.osr.nsw.gov.au/taxes/transfer-land

In relation to your preference to back out of the contract and forfeit your deposit, your right to do so will depend on your particular contract so your lawyer is in the best position to provide you with firm advice on this. That said, contrary to popular belief the amount of your deposit does not define your liability if you back out of the contract or even establish that you are entitled to back out at all. Indeed, absent special conditions in a contract, once you sign you are bound to proceed unless the vendor fails to comply with their obligations to prepare the property for transfer, so if a vendor has complied with their obligations they can sue to enforce the contract once you have signed it. Often times a vendor may agree to allow you to back out of the contract for some fee, which in many cases may be the amount of the deposit, but there is no rule of law that obliges a vendor to simply accept the deposit in exchange for releasing a purchaser from their contract.

If you really want out of the contract then your options are to negotate with the vendor to see on what basis they will let you or to identify some failure on the part of the purchaser that would entitle you to rescind the contract.

Again, your lawyer is likely in the best position to ascertain whether there is any basis for rescinding the contract.

I trust the above assists your understanding.

Good luck and please rate my answer.

Patrick