UTS Property Transactions: Assignment 1
(40 Marks) (Word limit 2,000 words)
DUE DATE: 31 March 2015
Rami, an impatient ballet dancer, impulsively decides to sell his house and move to NYC with his girlfriend Dawn. He immediately calls Dominic, his lawyer. After expressing a desire to assist, Dominic informs Rami that a Contract for the Sale of Land with prescribed attachments will need to be prepared before the property can be advertised, and that one of the prescribed attachments (the s 149 Certificate) can take up to 10 days after order before it is produced by Council.
The news of having to wait is not met well by Rami who, in a typically dramatic fashion, thereafter calls his real estate agent brother Shalom and demands that Shalom list the property on the agency website, and post an ad in the agency window. Rami tells Shalom to write recently valued at $900k in the advert. Rami fails to tell Shalom that the valuation was not done by a qualified valuer, but is rather Ramis own estimate valuation. Shalom runs the advertising as instructed.
A passerby, Fahd, sees the advert, and makes an enquiry with Shalom about the property. Fahd puts forward a verbal offer of $700k. When Shalom runs this offer by Rami, Rami reacts angrily, but is soon told by his girlfriend Dawn to accept the offer.
Shalom tells Fahd about the procedure with cooling-off. Fahd puts down a holding deposit of 0.25% and then the balance of 9.75% three days later. Being a cash purchaser, Fahd does not require finance, but decides to have the property valued to assist with future borrowings.
When the valuation comes in 10 days later, the property is only said to be worth $600k.
Fahd attends your office and asks for advice on the following:
i.) Is there a valid contract in place? (10 marks)
ii.) Assuming there is not, what claim(s) does Fahd have to a refund of his 10% deposit? (5 marks)
iii.) Assuming there is a contract, what claim(s) does Fahd have to:
a. Rescind the contract (at common law and at a statutory level)? (10 marks)
b. Sue for damages under the common law of tort (and what would be the quantum?) (5 marks)
c. Sue for damages under the common law of contract (and what would be the quantum for each?) (5 marks)
iv.) Have Rami and/or Shalom contravened any penalty provisions under the Conveyancing Act 1919 and/or the Property, Stock and Business Agents Act 2002 (NSW)? (5 marks)
Note the following:
1.) Assume the property is Torrens Title land and is residential property within the meaning of the Conveyancing Act 1919.
2.) Whilst you should indicate an overall position with your answer, you will be marked on your skills of argument and reasoning, particularly in regard to questions (i), (iii)(a) and (iii)(b). This means that you will have to acknowledge weaknesses in your argument.