Penny wise, pound foolish!
Signing a Contract of Sale without legal advice beforehand can be dangerous and costly. Advice can enhance your bargaining position arming you with information you didn’t previously know or saving you from signing a disastrous contract.
Returning to Melbourne after 10 years in Singapore, Giles was looking for an apartment close to family and local schools for his children. He found a brand new 3 bedroom penthouse, with views in Hawthorn East. The advertising blurb described the apartment as “Penthouse Luxury – the best of indoor and outdoor living, in an unbeatable location close to Camberwell Junction with its market, cafes and schools”.
Sounded great, but Giles, being a careful person, had Bev Adams of Bardoel & Adams, a legal firm specialising in probate and property law, look over the 122 page Contract and Vendor Statement before making an offer. The contract was the standard Law Institute of Victoria approved Contract of Sale. No problems there. However, unusually, the section in the Vendor Statement requiring the vendor to give details of notices affecting the property was not completed. The Vendor Statement was standard fare for a new apartment, but! The Owners Corporation Certificate included in the Vendor Statement contained a one line notation saying “Council emergency order re cladding”. There was no other reference in the contract or the Vendor Statement about a council emergency order for cladding.
After making telephone calls to the owners corporation manager and to council’s building surveyor, Bev discovered Boroondara City Council issued an emergency order under section 102 of the Building Act saying “the building has been constructed with combustible cladding which is a danger to the life and safety of the occupants”.
The emergency order was NOT in the contract or the Vendor Statement.
Bev advised Giles of a case she knew about in Brunswick where apartment owners were lumbered with a $2,000,000 plus bill after receiving an emergency order from council to make the apartments safe because of combustible cladding. Giles didn’t make an offer and looked elsewhere. He was saved from signing a potentially disastrous contract.
Buyer Beware! Get legal advice before signing a Contract of Sale and Vendor Statement
Bev Adams has reviewed thousands of contracts and Vendor Statement. She knows her stuff. If you are considering purchasing a property then give Bev a call and make sure that you don’t end up in a disastrous situation.