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Aussie Property Dream Turns into a Nightmare

27 Apr 2016 Armadale 0 Comment

I stand to lose everything.

First published online www.news.com.au—March 4, 2016signpost-debt-aug-28-breakout

WHEN Suraj Siddique bought a house-and-land package 15 minutes from western Sydney’’s Penrith in July last year, he thought it would be the ideal family home for his wife and two young children.

The 37-year-old systems engineer purchased the pre-sale lots from Henley Group’s Edgewater Homes along with 14 other families, who were promised they’d be moving into the Werrington development by Christmas.

More than a year later, Mr Siddique is locked in a messy three-way legal battle with Edgewater and the property developer, Parramatta-based Settlers Estate Pty Ltd, facing mounting legal costs, and the very real possibility of losing everything.

Settlers Estate, a private property development company, had pre-sold 15 out of the planned 106 lots to Edgewater, which then sold the house-and-land packages.

By February, the group were growing concerned that construction had not even begun. Mr Siddique began to panic when he realised his contract’s March 31 sunset date was fast approaching.

Neither Mr Siddique nor Edgewater could get a straight answer from Settlers Estate about the status of the subdivision. Frantic emails to the local council revealed no subdivision plan had been registered.

Mr Siddique and the other 14 families, who had purchased their 450sqm house-and-land packages for just under $620,000, were even more alarmed to see new 220sqm lots in the subdivision being pre-sold for $600,000-$700,000.  To all appearances, Settlers Estate was on a ‘go slow’.

Fearing he would lose his family home, Mr Siddique launched urgent legal action against Edgewater Homes and Settlers Estate in the Supreme Court, alleging false and misleading conduct under the Australian Consumer Law.

He was seeking an injunction, possible damages, but mainly what’s called ‘specific performance’ — he just wants the home he paid for in good faith.

The matter was complicated when not long after, Edgewater Homes launched its own case against Settlers Estate to stop the rescission of the contracts. Having made the sales, Edgewater has just as much to lose if the contracts are torn up, but the Mr Siddique now finds himself wedged in the middle.  “I’m in a situation where if I lose, I’ll lose the property, I’ll [have to pay $24,000] to my solicitors, and I’ll have to pay costs for the other side,” Mr Siddique told news.com.au.

To make things worse, he’s sacked his solicitor, but was instructed by the judge during a court appearance last week that he would need to find a new one by October 9. Already mired in debt, he’s praying a lawyer will take on his case pro-bono.  Mr Siddique said he has already paid $13,000 to his first solicitor, $2000 to a second solicitor and $1000 in court fees. He is disputing an outstanding $8000 bill from his first solicitor.

Mr Siddique said the effect on his family and his health has been devastating. “We are on fire, we don’t know what to do. My wife is taking sleeping medication, I’m depressed, my kids keep asking when we will be moving into our new house,” he said.

Settlers Estate has been contacted for comment. Edgewater Homes declined to comment.

nightmare_edited

Locked out: Families who bought lots in this Kellyville Subdivision are taking their deve

“DON’T BUY OFF-THE-PLAN, EVER”

One Sydney solicitor said the issue of property developers selling off-the-plan and then reselling the properties at higher prices has reached epidemic levels.

Sunset clauses allow either party to rescind a contract if certain conditions are not met, but are increasingly being used by developers, leaving buyers priced out of the market with their original deposits. The clauses are standard in such contracts and are perfectly legal.

“This is a major problem in the industry,” said Leverage Group’s Bailey Compton, who is currently running a class action on behalf of a separate group of families who purchased lots in a subdivision in western Sydney’s Kellyville in late 2013.

The group launched legal action against the developer, Parkview Estate Pty Ltd, earlier this year after it informed them it would consider extending the sunset date only if each purchaser agreed to pay an additional 10 to 15 per cent on the original contract price to make up for “cost blowouts”.

The Kellyville buyers were asked for an additional $50,000 on top of the initial $420,000. Some had sold their family homes to finance the new venture, leaving them in the lurch and paying rent for two years.

“I cannot understand how you can buy a property in good faith and then find out down the line that you don’t actually own it, and that now you need to fight for it,” one buyer, who did not wish to be named, told news.com.au.

They allege the developer breached its contract by not using “reasonable endeavours” to get the subdivision plan registered before the sunset date.

“This is the second class action I’ve run and I’ve got another two I could run,” Mr Compton said. “Throughout Sydney developers have been selling and dragging their feet.”

 

 

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