An Australian renter is distraught over receiving legal letters from her landlord after being embroiled in a year-long battle trying to buy the property she currently resides in.
Last year, news.com.au reported on a Queensland woman who missed out on scoring her dream home because the bank was 13 minutes late to the settlement deadline.
Dr Loretta McKinnon, a 44-year-old epidemiologist, was renting a house in the Brisbane suburb of Windsor and made a winning $580,000 bid for it at auction.
The property was meant to settle in September last year but her bank, the Commonwealth Bank, admitted that “human error” caused a slight delay as a staff member had ticked an incorrect box in the documents.
Instead of granting an extension, the vendor ended the deal and claimed Dr McKinnon’s $29,000 deposit, which they were legally allowed to do.
In most Australian states, a two-week grace period is given if a property settlement doesn’t go ahead smoothly, but at the time, this wasn’t the case in Queensland. This rule has since changed, but unfortunately it’s too late for Dr McKinnon.
Now, more than a year later, the aspiring homeowner says she has been stuck in limbo as negotiations with her bank and the vendor have hit a dead end, all while she has continued to pay rent for the property and service the loans she took out to buy it.
“The fact it’s been 12 months and I haven’t even got the deposit back … it’s horrendous,” she told news.com.au. “My interest rates continue to go up. I cannot stay here, I cannot move out, I cannot switch banks.”
She claims she has been “held captive” and “tortured” by her bank, with no end in sight.
Last week, she received a letter from the vendor’s solicitor indicating they will launch a legal challenge.
The auction was held at the height of the 2021 property boom and the house next door sold $200,000 higher than what Dr McKinnon had won the auction with, just two weeks later.
As soon as the deal fell under, Dr McKinnon lodged a caveat on the property which protects her interest as an aspiring buyer and blocks the vendor from selling to anyone else.
Last week, her landlord – who is also the vendor – sent her legal letters indicating they were planning to fight the caveat in the Queensland Supreme Court.
They lodged a notice of intention to defend in the Brisbane Supreme Court Registry last Wednesday.
The vendor’s solicitor referred news.com.au to their legal letter when asked for a comment.
They also pointed out the vendor was not legally obligated to grant the extension.
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Part of the money Dr McKinnon got together to buy the property was from family members, including her sister and dad.
As she has not got the $29,000 deposit back, she had to sell most of her furniture and other items to try to pay back her family.
She has asked for compensation from the bank after the year-long nightmare.
CBA have offered $700,000 to the vendor to secure the property for Dr McKinnon, higher than the original amount, but it’s understood the vendor has not engaged with that offer.
CoreLogic valuations of the property put it at the $1.4 million to $1.5 million mark, something the bank acknowledged in an email. However, they said independent property valuers said the actual worth was closer to $580,000 and $640,000.
“CBA’s offer … of $700,000 is above market valuation and represents a further $115,000 increase over and above the auction price,” the bank wrote in an email to Dr McKinnon, seen by news.com.au.
The bank initially offered $10,000 in compensation to Ms McKinnon and the cost of her legal fees which so far have cost $30,000.
In a statement to news.com.au, a CBA spokesperson said the property’s settlement “did not complete as planned”.
They said they “engaged with Dr McKinnon, both through her lawyers and directly, in order to resolve her complaint and assist with purchasing another property”.
“In addition, we have engaged in negotiations with the vendor’s solicitor to attempt to facilitate the completion of the sale. Unfortunately, this has been unsuccessful.”
They said they will continue to work through her complaint.
One of Dr McKinnon’s big issues is that she sold her two investment properties quickly and cheaply, that she’d held for nine and 15 years, to fund the purchase of the Windsor property.
The sudden loss of assets and income has impacted her ability to buy another home or switch lenders, she said.
On top of that, the rent she has been paying the last year is more than what her mortgage would have been.
The last 12 months has had “a catastrophic impact on my health”, according to Dr McKinnon.
alex.turner-cohen@news.com.au
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