Demonstrating the importance of timing in property investment, a Gold Coast condo seller has won substantial damages for a buyer’s default at the very moment the property’s value has climbed at least $200k.
Tessa Carlson signed up for the $1.105 mil buy of the large three-bedroom Gold Coast Highway condo in October 2018 with settlement due at the end of June 2019.
Seller Jon Clancy agreed to her immediate rent-free occupation upon payment of the $75k deposit.
To incentivise an earlier settlement, Carlson was to pay $900/week as “licence fee” if she didn’t settle at the end of March 2019.
No such payments were made and – come settlement date – there was no attempt on the buyer’s part to hand over the purchase price.
Carlson vacated in August and Clancy terminated the contract in November 2019.
He commenced proceedings against Carlson for his resale losses including $130k which was said to be the difference in the unit’s contract price and its value at the June settlement date.
His lawsuit came to trial in the Southport District Court in February 2021 in the defendant’s absence.
She had notified her former solicitors that she did not intend to appear at the trial as she was “unavailable due to COVID restrictions” adding that “I have been and continue to be unemployed and in financial hardship”.
Judge Geraldine Dann gave leave to her solicitors to withdraw and embarked on the trial with evidence by affidavit.
Accepting HTW valuer Tod Gillespie who valued the property as at the June settlement date at $975k, she allowed the loss in value at $130k.
To this was added the seller’s legal costs of the failed sale and the commission paid to the agent. After crediting the forfeited deposit, the net loss came in at $89.5k.
Together with interest at the court rate of 6% rather than the contract rate of 9.5% p.a., holding costs, repairs and unpaid “licence” fees to September 2019, the judgement in Clancy’s favour was for a total of $138k.
Indemnity costs of the recovery proceedings – as provided for in the standard conditions of sale – were also awarded.
Real estate.com records a sale of the Miami unit in October 2020 – three months before the trial – at $1.075mil. Its current value range is estimated to be as high as $1.22mil.