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Family Loses £170,000 House Deposit Due To Legal Loophole

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Family Loses £170,000 House Deposit Due To Legal Loophole

A couple have lost their life savings after falling foul of a legal loophole when moving home.

Sam Gayed, 42 and his wife Nardine, 37, spent a decade saving for their 'dream home' in Melbourne, Australia, but are now just trying to keep their heads above water.

The pair moved to Australia from Egypt 10 years ago, settling down and starting a family with their three children.

And in June 2019, they stumbled across a £2.4 million (AU $3.2m) four-bed property, which they planned on moving into in December of that year.

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However, Mr Gayed says it was when it came to signing the contract that he noticed something strange.

He told news.com.au: "It was a bit weird when they removed the subject to finance clause.

"We wanted the house of course, we had got emotionally attached to the house, we liked it."

Sam Gayed and Nardine thought they'd found their dream home. Credit: Sam Gayed
Sam Gayed and Nardine thought they'd found their dream home. Credit: Sam Gayed
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The 'subject to finance' clause gives the buyer the option to back out of the deal if they are unable to get a loan from their bank.

Despite their concerns, though, the couple say they decided to sign because they felt pressured, having been told by the estate agent that other buyers were waiting.

Mr Gayed said: "I was worried they would sell the house [to someone else].

"The agents have great sales techniques, they sell 10 houses a month, I buy one house every 10 years."

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He added: "Everything was in order, if they insisted on removing the clause, we thought we could manage, we were not planning to withdraw.

"It would be far from our thinking that there could be a loophole [in the Australian legal system]."

The deal for the $3.2m house fell through. RT Edgar
The deal for the $3.2m house fell through. RT Edgar

But then they got the news that Mr Gayed's 'doctor's scheme loan', which allows medics to borrow up to 90 percent on the value of a property, had only offered 85 percent due to a £1.5m (AU $2m) limit the couple was unaware of.

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This left the couple desperately searching for £170,000 (AU $320,000) to cover the missing five percent and the stamp duty.

Mr Gayed tried to sell his shares in his company as well as their current home, but neither of the sales went through in time to save the deal.

And the couple lost their £170,000 deposit.

Mr Gayed said: "We had great aspirations and dreams. Now we're moving in a different direction where we're trying to save our livelihoods.

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The couple were unable to find the missing five percent for the loan on the property. Credit: RT Edgar
The couple were unable to find the missing five percent for the loan on the property. Credit: RT Edgar

"We lost all our savings before lockdowns and the pandemic, during that pandemic of course the business slowed down significantly.

"We saved nothing still, during those lockdowns, we couldn't save anything.

"If you want to punish me for wasting the vendor's time, at least make it proportionate, don't take all my savings."

Annabelle Feng, from the RT Edgar real estate agent, said she received a commission for the failed sale.

She told news.com.au: "We can't suggest, we just tell them [the purchaser] what the options are.

"Normally we let every purchaser know what their rights and their obligations are. They are free to make their decisions."

LADbible has contacted RT Edgar for a comment.

Featured Image Credit: Sam Gayed

Topics: Melbourne, Property, Australia

Dominic Smithers
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