Peter wanted to buy land and spoke to his finance broker to arrange a loan for a property of more than 100 acres. Complex bank rules can apply to loans when buying a property of that size.
Initially, Peter hoped to save money by using a licenced conveyancer rather than a solicitor to act on his behalf.
The transaction proceeded smoothly – until 48 hours before settlement.
Then the bank, now at the eleventh hour realising the purchase was excess of 100 acres refused finance – despite having given prior approval for the loan.
What to do!
At this point, faced by the withdrawal of bank finance Peter was about to lose his deposit, lose the property and possibly even face being sued for breach of contract.
Meanwhile the conveyancer was no help. “So sorry! I can’t deal with the bank on legal issues like this,” the conveyancer advised. “Since it’s become a legal issue with the vendor I can’t help you sort it out,” shrugging off responsibility.
At this point, the finance broker called a colleague, a local solicitor with 30+ years of experience in land and property law. Having lived and practiced law in the area for 20 years, the solicitor was well aware of deals like this going sour, and – importantly – knew what could be done to retrieve the situation.
First, the lawyer contacted Peter to confirm exactly what had happened. After considering the situation, the lawyer arranged a phone conference to deal with the issue. On the line were the solicitor, the Banking and Financial Services Ombudsman in Sydney and the finance broker.
It is important to know the Banking and Financial Services Ombudsman doesn’t take on a case unless it’s likely to have a positive outcome. Once the solicitor had briefed their office with the background story, the Ombudsman’s office, realising the facts and a potentially happy ending, opened up a file.
The conclusion of the phone conference was that it was accepted that the bank had mislead Peter and that it was indeed bound to provide the promised loan. The bank provided the loan with Peter able to settle his purchase and keep his property.
The significance of this story?
By not using a lawyer, Peter’s interests were not protected. He found himself stressed and anxious, with the purchase on the verge of collapse at the eleventh hour.
Once Peter found an experienced local lawyer, the loan proceeded and he was able to buy the property. Peter obtained better service – and protection – because of the lawyer’s superior knowledge and ability.
