Imagine pouring your life savings, your hopes, and your dreams into what you believe is your forever home, only to discover it’s not yours at all.
For Sydney parents Mark and Emma, this isn’t a hypothetical nightmare – it’s their devastating reality, a chilling warning for every Australian property buyer.
The couple, with three children in tow, stretched their finances to the limit, paying a hefty $1.35 million for a house in Silverdale, Sydney’s west.
They’d sold their previous home, packed up their lives, and, in a flurry of excitement, moved into their new abode just a day before settlement was due.
“Everything from there went smoothly, right up until we were supposed to settle,” Emma recounted to A Current Affair.
Mark added, “Everything seemed on track until a day, two days, before settlement when there was still things that hadn’t been signed off on their end to make it happen.”
They weren’t suspicious when the vendor requested a little more time.
A common hiccup, they thought. But then, their conveyancer delivered the gut-wrenching news: a caveat had been placed on the house, slamming the brakes on their settlement.
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Mark and Emma have been caught in middle of house-flipping nightmare. Source: A Current Affair
As days bled into weeks, and weeks into months, the true horror of their situation unravelled. Mark and Emma discovered not one, but two outstanding mortgages on the property, along with another undisclosed caveat.
New South Wales Real Estate Institute CEO Tim McKibbin confirmed the couple’s innocence in the ordeal.
“It’s very, very common to have a mortgage on the title, less so with caveats, but they certainly exist on titles. They are not uncommon,” he explained, highlighting the insidious nature of these hidden property claims.
For those unfamiliar, a caveat is a legal notice, a statutory injunction under the Real Property Act 1900, signalling an interest on the land.
It effectively freezes any sale until that interest is resolved.
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Paying $1.35 million, the couple was stretched but they thought they’d found the perfect home at Silverdale in Sydney’s west. Source: A Current Affair
Banks frequently use them to protect their lending interests.
When loans aren’t repaid, it can lead to a mortgagee in possession scenario – where the lender repossesses the property due to the borrower’s default.
According to Concierge Buyers Advocates, a mortgagee in possession occurs when a lender, such as a bank or financial institution, takes possession of a property because the borrower can’t meet their mortgage repayments.
This means the property will be repossessed by the lender to recover the outstanding debt. This process is usually initiated after several missed repayments and over an extended period, particularly when the lender believes the borrower won’t be able to resolve the situation or if the debt is too high to recover without selling the property.
If a borrower fails to rectify the default, the lender may commence legal proceedings to repossess the property, which involves obtaining a court order.
Once granted, the lender takes possession, potentially involving the physical eviction of occupants. Imagine coming home one day to find the locks changed or doors sealed – a terrifying prospect.
But then their conveyancer reached out and broke the news that a caveat had been placed on the house, which prevented the settlement. Source: A Current Affair
After repossession, the lender typically sells the property, often through auction, which is seen as the most transparent method, to recover the debt.
In Australia, this entire repossession process can take a lengthy two to three years before such properties hit the market.
For Mark and Emma, the grim reality hit hard.
They’ve now been served with a 28-day Supreme Court repossession order.
They can stay in the house until January, when the first mortgagor plans to put it on the market.
While they will get their deposit back, the emotional toll is immeasurable.
“We can’t make our house a home because what’s the point in setting up stuff if we just have to move? It’s not our house. It’s like we’re living in someone else’s house,” Emma lamented.
This isn’t just Mark and Emma’s story; it’s a stark reminder to every prospective homeowner. Even with due diligence, hidden complexities can turn a property dream into an unimaginable nightmare.
Always ensure your legal team conducts exhaustive checks, and never underestimate the power of a caveat or the devastating impact of a mortgagee in possession to derail your future.
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