Hypotheticals by Manny Wood. Published in the Coffs Coast Advocate on 5 May 2018.
Gary and Jill wish to sell their home and relocate closer to their children. They own their property as joint tenants.
Paul wishes to purchase the property and after paying a 10% deposit to the real estate agent, contracts are signed and exchanged. Settlement is scheduled to occur 28 days later.
Unfortunately, Gary dies before settlement.
When Paul is advised of Gary’s death, he reconsiders the purchase. Paul decides that he probably cannot afford the mortgage repayments and is not convinced that the house is right for him.
Paul examines the contract and discovers that it contains a clause stating that if either party dies, the other party can rescind the contract and in Paul’s case, have his deposit refunded.
Paul instructs his solicitor to serve a notice of rescission.
Since Gary’s death, Jill has become increasingly eager to move closer to her children. She has made arrangements to move-in with her son and has booked a removalist.
Jill is upset that Paul has changed his mind and she does not wish to place the property back on the market and suffer further delays.
The scheduled settlement date passes and Jill instructs her solicitor to serve a notice requiring Paul to proceed to settlement and pay the balance of the purchase price within 14 days.
Paul commences court action, seeking the return of his deposit.
The court reviews the wording of the specific clause that Paul relies upon and rules that because the property was owned jointly, there was no impediment to Jill, as the surviving owner, honouring the contract.
The court orders that Jill is entitled to the deposit and that Paul is to pay her legal costs.
If you would like Manny to address a particular legal issue, send your request to manny.wood@ticliblaxland.com.au or call him on (02) 6648 7487.
