In what could be interesting legal precedent, the Sydney Morning Herald today has reports of two “property speculators” who has been given permission from a Supreme Court Judge to walk away from a contract and recover the deposit to purchase a terrace off the plan for $1.07 million.
The decision comes on the grounds that the Real Estate agent and promotional material made some predictions with no reasonable grounds that they would in fact come true.
The agency’s advertisements promised that Green Square, a planned business centre next to Victoria Park, would become the “next city centre in Sydney”; they forecast a seminar which would advise how to buy “the hottest investment location in Sydney” and they promised a “one-year 5 per cent rental guarantee”.
“According to Mr Zhang, he and Ms Liu were reluctantly persuaded to buy the Victoria Park terrace by being assured that the property market was continually rising; that the market doubled in value every seven years; and that in two years the terrace would definitely have increased in value,” Justice White said.
Such claims are common hype in the RE industry and with the market now falling this could open the flood gates for buyers to walk away from contracts. The Real Estate Institute of NSW spokesperson, Julian Brophy said the Institute was reviewing the judgment and the implications it held.
» Judge tears up $1m property contract – The Sydney Morning Herald, 24th February 2009.