When a buyer and seller sign an OTP, it is more than just a handshake, it becomes a legally binding contract (depending on the conditions and the wording). Yet many property transactions still collapse between the signature of the OTP and the registration of transfer. This is where an experienced attorney at Roberts Incorporated can make all the difference by guiding both parties through the process, monitoring key milestones, advising on remedies and protections, and ultimately, when things go wrong, helping to navigate the fallout.
Below are common pitfalls that lead to breakdowns, and how Roberts Incorporated can step in.
1. Failure to secure finance
One of the primary reasons an OTP is not completed is the buyer’s bond application being rejected, or the shortfall being too large to fund.
How Roberts Incorporated can help:
- Prior to signature: Review the OTP to ensure the suspensive condition for bond approval is drafted in appropriate terms.
- After signature: Track whether the buyer meets the bond‐approval condition in time and advise the seller of their options if the buyer defaults.
- If the buyer cannot pay, the attorney can advise on cancellation rights or claim for damages/deposit forfeiture in line with the OTP clauses.
2. Buyer’s sale of another property is required
Sometimes the buyer’s offer is contingent on the sale of their existing property. If that sale fails to occur in the stipulated timeframe, the transaction may collapse.
How Roberts Incorporated assist:
- Ensure that the OTP clearly states this suspensive condition with deadlines and consequences.
- Monitor whether the buyer meets the condition and notify both parties of the impending deadline.
- If the condition fails, advise on next steps: either extend the deadline (via amendment) or cancel the agreement, protecting the seller’s rights.
3. Seller fails to fulfil agreed obligations (repairs, documentation)
Buyers often require certain repairs or compliance certificates (e.g., electrical, plumbing, gas) as part of the transaction. If the seller fails, the deal may collapse.
How Roberts Incorporated assist:
- Before signing: Advise the seller of their obligations (compliance certificates, municipal approvals, etc.) and reflect these in the OTP.
- After signature: Track the fulfilment of these seller obligations, send reminders, and escalate if deadlines are missed.
- If obligations are not met: Advise the buyer on whether they may cancel, renegotiate, or enforce compliance; advise the seller on possible remedies or liability.
4. Discovery of defects / unapproved structures
Unreported defects, or illegal/unapproved structures, may surface during due diligence and cause buyers to withdraw.
How Roberts Incorporated assist:
- Prior to signing: Advise both parties on proper disclosure, plan approvals and legal compliance, including what checks should be done.
- After signature: If defects/illegal structures emerge, advise on how to handle renegotiation or cancellation, including risk exposure for seller (misrepresentation) or buyer (missing the property).
- Draft or review clauses in the OTP that allow for such eventualities (e.g., “subject to inspections”, “subject to certificate of compliance”, etc.).
5. Managing the cancellation or failure of the deal
When a deal does fall through, having an attorney from Roberts Incorporated becomes crucial. Here are the key steps they will guide you through:
- Confirm status: Establish whether the OTP has in fact failed (e.g., suspensive conditions not met, buyer withdrawn, seller breached) and what rights each party has.
- Legal notice: Where required, draft and send formal notices of breach, cancellation or enforcement of the OTP terms.
- Recovery of deposit or compensation: If the buyer is at fault, assist the seller in claiming the deposit or other agreed compensation. Conversely, if the seller is at fault, advise the buyer on claims for damages or refund of deposit.
- Re-marketing the property / avoiding second-deal pitfalls: For the seller, advise on re-listing strategies, whether to retain rights against the first buyer, or include escape/backup clauses.
- Protecting termination rights: For both parties, ensure that termination is affected in line with the OTP and the law, to avoid continuing liability or unintended obligations.
Why choose Roberts Incorporated?
- Specialist legal expertise: We are a firm with a qualified attorney specialising in property transactions, not just administrative conveyancing.
- Proactive monitoring: We don’t just lodge documents and wait, we track every condition, certificate, deadline and obligation, reducing the risk of collapse.
- Mitigation of risk: By advising upfront and drafting robust OTPs, we help to minimise the chance of failure, and when failure does occur, we protect your rights.
- Peace of mind: Whether you are buyer or seller, you know that the legal side is being handled thoroughly, so you can focus on the property itself, not the legal mine-field.
Contact Roberts Incorporated to assist with your conveyancing needs. They are ready to manage the whole conveyancing process for you.
