Room for Improvement

Overview:  Our client had signed a Contract of Sale, without consulting a lawyer, for the purchase of a vacant lot, on the basis that the vendor (the person selling the house) would arrange for a house to be built on the site. At the time of the Contract the plan of subdivision had not been registered and there was no separate title for our client's lot, meaning our client purchased the lot "off the plan". When built, the house had defects which the vendor was refusing to rectify.

Issues:  Our client took occupation before settlement under a licence arrangement but was not satisfied with the house. Some of the builder’s work was either defective or incomplete, our client's elderly mother had tripped over loose cables in the laundry and sustained serious injuries, the boundaries were not correct and our client was receiving less land than shown in the proposed plan of subdivision. The Contract of Sale, which our client had signed without obtaining legal advice, was a one-sided contract and contained numerous provisions protecting the vendor and very few protecting our client. When we explained the Contract of Sale to our client they was shocked and said that if they had obtained legal advice on the Contract of Sale before signing they would not have bought the property. Interesting issues arose in relation to the licence fees payable for early occupation, which were substantially in arrears. We had to address questions as to whether our client was entitled to withhold licence fees pending completion and rectification of the works, and whether the vendor was entitled to refuse to settle if the outstanding licence fees were not paid by the due date for settlement

Action:  We became involved only fourteen days before settlement. We urgently wrote to the vendor’s lawyers demanding that the defective work be rectified and that the incomplete work be competed prior to settlement. We also urgently made our client aware of their rights and options.

Outcome:  As a result of our involvement, the majority of the incomplete work was completed and the defective work was rectified. Our client ended up being happy with the outcome in a very tricky situation.

When purchasing "off the plan" or when the vendor is responsible for constructing a dwelling, we strongly recommend that legal advice be obtained before the Contract of Sale is signed. Note that only lawyers are licensed and trained to provide required legal advice.