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We signed a contract to purchase a Victorian property, buildt…

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We signed a contract to...
We signed a contract to purchase a Victorian property, buildt 15 years ago. However, the owner did not inform us of two facts:

1) He is in fact the builder of the house himself.
2) He used recycled timber with termite tracking (termites have infected the timber before but there is no active infestation).

If we had known these facts, we would not sign the contract of purchase.

We have decided that based on these facts, we do not want to purchase this property.

Does the owner have an obligation to inform us of these two facts and if so, what action can we now take?
Submitted: 8 years ago.Category: Australia Law
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Answered in 2 minutes by:
6/8/2010
Solicitor: Peter G., Solicitor replied 8 years ago
Peter G.
Peter G., Solicitor
Category: Australia Law
Satisfied Customers: 767
Experience: Law degree from the University of Melbourne 1978, with thirty years of practice experience.
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Do you have a finance clause in the contract which is still open?
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Customer reply replied 8 years ago

I'm not sure what a finance clause is, but we have paid a $10,000 deposit (about 2% of the price of the property) and settlement is on the 20/7/10.

Solicitor: Peter G., Solicitor replied 8 years ago
Are you getting a loan to assist with the purchase? - bank mortgage? And if so, is there anything in the contract about having a certain number of days to get approval for this loan.
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Customer reply replied 8 years ago
No, there is no subject to finance clause.
Solicitor: Peter G., Solicitor replied 8 years ago
Ok, thanks. You may have purchased at auction. Can you tell me whether you have a solicitor acting for you in this transaction please.
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Customer reply replied 8 years ago
We did not purchase on auction. Our property conveyancer is an aquaintance of the vendor's agent. We do not have a lawyer acting for us at the moment. The property is a rural one, 2 hrs from the CBD; it was intended to be a holiday house.
Solicitor: Peter G., Solicitor replied 8 years ago
I would strongly suggest you get a properly legally qualified property lawyer in the current circumstances. Conveyancers are sometimes legally qualified and sometimes they are not. Non-legally qualified conveyancers are not allowed to give any legal advice to you. Having said that, I can't see a way out for you; the building insurance guarantee for an owner/builder will not now give you cover, if the building was completed 15 years ago. The vendor also does not have to tell you about termites - you have the option of obtaining an inspection report on this before signing. The reason I asked about a finance clause is that you might have been able to avoid the contract if your lender didn't approve a loan. If you had this clause and told the, say, bank about these potential problems, then they might have just said no loan, and you could then have terminated the contract. I again suggest you have a solicitor take over - I would not be comfortable with a conveyancer recommend by the vendor's agent. I am a bit too far away from the action and cannot see the documents, so it would be best to see a solicitor to see this through. I could recommend someone if you want me too (but I'd would need to know what area you are in).

I think this probably answers your questions, but if there is anything else please come back to me, I am happy to address any further concerns.
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Solicitor: Peter G., Solicitor replied 8 years ago
I should have added that you might consider it a better option to terminate the contract and forfeit the deposit (I don't know if the full deposit was $10,000 - 2% only at this stage??). This may be a better option in all the circumstances, but this is a decision only you can make. You would definitely have to see a solicitor about this because terminating a contract of sale has to be carried out with the utmost care.
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