OK, we’ve had problems getting finance for the chalets in the Health Resort. It seems that backs & other lenders want to be able to take possession of a property in the event of a loan default, so that they can then get someone to occupy it (& pay them the rent, I guess), or arrange to sell it. This process has a bit of a roadblock when the chalets are behind a large locked gate, with entry only at certain times or by prior arrangement. Even applications for a commercial loan, which tend to loan much less than a residential one, were rejected.
So we were obliged to ask the vendor (via our solicitor to his solicitor) for an extension of time to arrange finance. Of course, at this time I still thought that getting a loan would be relatively easy. After all, it’s not a huge amount & they will only loan 70% of the price. So when our broker finally found a bank that might be willing to talk to us, I asked for another extension. Consider my amazement when the reply came back that they would happily extend both the finance date & the settlement date if we agreed to pay default interest at 12.25% on all of the delayed dates – all up, over $2,000 for a month. While he is still receiving rent from the property! Needless to say, the contract was promptly terminated.
So, the vendor now has to start again on finding a buyer, having them hit the same obstacles with their finance, ask for the same delays all over again, and so on. Good luck, pal.
