Questions & Answers
Will the contract be automatically canceled if the bank does not process the mortgage?
Hello, Legal Advice ME
I am writing to seek your advice on my ongoing process of buying an apartment. I have signed contract F, which is valid until 15 Aug 2024. My plan was to buy it financed by a mortgage.
I got my pre-approval and signed the contract, then passed it to the agency to complete all needed paperwork. The agency took over with the bank, and then I found out that the apartment, although not a hotel, is listed as a hotel apartment on the title deed.
The bank said processing this would take a very long time. I applied with a different bank, again all pre-approved, but as soon as they found out about the property type stated on the title deed, they said they cannot finance it.
My questions are:
- If the first bank is unable to process all the paperwork on time, will the contract be automatically canceled?
- Can I cancel the contract based on the fact that I was not made aware of the property type stated on the title deed before signing the contract? Would I get the 10% deposit back?
Dear Questioner,
In your situation, it's essential to review the terms and conditions outlined in Contract F to determine your rights and obligations regarding the potential cancellation of the contract.
Here are some key points to consider:
1. Contract Terms:
Review the terms of Contract F, including any clauses related to financing, property type, and cancellation procedures. Pay particular attention to any deadlines or conditions that may impact the validity of the contract.
2. Financing Contingency:
If your ability to obtain financing is contingent upon certain conditions, such as the property type listed on the title deed, and those conditions cannot be met within the specified timeframe, you may have grounds to cancel the contract.
Check if there is a financing contingency clause in the contract that outlines the conditions under which you can cancel.
3. Notification Requirement:
Determine if there are any notification requirements stipulated in the contract regarding changes to the property type or financing issues.
If you were not made aware of the property type listed on the title deed before signing the contract, this could potentially constitute grounds for cancellation, but it would depend on the specific language of the contract.
4. Deposit Refund:
If you decide to cancel the contract, check the terms regarding the refund of your deposit. Contracts typically outline the conditions under which the deposit may be refunded, including instances of contract cancellation due to financing issues or other contingencies.
5. Consult Legal Advice:
Given the complexities involved in real estate transactions and contract law, it's advisable to seek legal advice from a qualified lawyer familiar with property law in your jurisdiction. They can review the contract, assess your rights and options, and provide guidance on the best course of action.
In summary, review the terms of Contract F, consider your financing options and the implications of the property type listed on the title deed, and consult with a legal expert to determine the best course of action regarding the potential cancellation of the contract and the refund of your deposit.
Dear Questioner,
All your questions will depend on the terms and conditions enclosed in the document, Contract F.
Normally, there is a provision to get back your amount; hence, the rejection from the bank has nothing to do with you.
We will make sure and will let you know all the possibilities in detail after a careful review of Contract F.
Kindly share your WhatsApp number to proceed with us.
Dear Questioner,
Thank you for reaching out to us!
Based on the information provided, it seems that the property you are trying to purchase is listed as a hotel apartment on the title deed.
This can create complications when trying to obtain a mortgage from a bank, as banks usually have strict guidelines on the types of properties they can finance.
To answer your questions:
1. If the first bank is unable to process the paperwork on time, the contract will not automatically be canceled. However, you may face penalties or additional fees for not being able to complete the purchase on the agreed-upon date.
It is important to check the terms and conditions of your contract to see if there are any provisions for such situations.
2. You may be able to cancel the contract based on the fact that you were not made aware of the type of property stated on the title deed before signing the contract.
This would depend on the terms and conditions of your contract and whether there are any provisions for such situations.
If there are no provisions, you may need to seek legal advice from us to determine your options.
As for the 10% deposit, this would also depend on the terms and conditions of your contract and whether there are any provisions for refunds in case of cancellation.
3. Your options in this situation would depend on the terms and conditions of your contract and whether there are any provisions for such situations.
Kindly feel free to contact us at [-------] or email [-------] for further guidance.
Greetings,
Dear Questioner,
In regards to your questions, please note the following:
1. If the first bank is unable to process the paperwork on time, the contract will not be automatically canceled. However, if the contract has a specific clause stating that the sale is subject to financing, then you may have the option to cancel the contract.
2. If you were not made aware of the type of property stated on the title deed before signing the contract, you may have grounds to cancel the contract.
However, this will depend on the specific terms and conditions stated in the contract. It is important to review the contract and consult with a lawyer to determine your options.
3. Your options in this situation may include negotiating with the seller to change the type of property on the title deed, finding a different bank that is willing to finance the property, or canceling the contract and seeking a refund of your deposit.
We can assist you in resolving this issue.
Please reach out to our senior legal consultant Mr. Muhammad Abdullah at [-------] for further details.
Dear Questioner,
You don’t have to worry about your matter anymore, as we have helped many clients who were facing the same issue, as the seller did not clarify the unit type during the time of engagement.
However, we offer you a full evaluation of your matter by reviewing the MOU, Annexure F, and the SPA to understand its terms.
Accordingly, we offer you a free legal opinion on your position and what the coming legal steps could be. All you need to do is contact us through WhatsApp for assistance.
Dear Questioner,
Thank you for reaching out with your questions regarding your ongoing apartment purchase process. I understand that dealing with unexpected issues can be challenging, and I'm here to provide you with the necessary legal guidance.
Regarding your inquiries:
- Contract Validity and Automatic Cancellation:
If the first bank cannot process the paperwork on time, the contract will not be automatically canceled unless there is a specific clause in Contract F that states this condition.
Typically, you would need to negotiate with the seller or take legal steps to terminate the contract based on the inability to secure financing.
- Cancelling the Contract Due to Property Type Misrepresentation:
You may have grounds to cancel the contract if you were not informed about the property being listed as a hotel apartment on the title deed before signing.
This could be considered a misrepresentation. In such a case, you could potentially recover your 10% deposit.
However, this would depend on the specific terms and conditions outlined in Contract F and the circumstances of the misrepresentation.
To provide you with detailed and tailored advice, and to explore the best course of action for your situation, I recommend we discuss your case further.
Please reach out to me via WhatsApp or phone at [-------].
