When your new off the plan unit disappears

Hi Flat Chat,

In July 2013 my fiance and I entered into a contract to purchase a 3 bedroom, 2 bath, 3 car spot apartment for what was probably expensive then.  The internal space was 108 sqm plus 138 external (very large, but that was the appeal to us). 

This month we received a letter from the vendor advising that the strata plan was changed and that our apartment basically no longer exists.  We have the option to rescind the contract for no compensation. The reason given was so that the apartment block complies with Council approval requirements.

After doing some digging, we found what we believe to be council’s original conditional approval requiring more 3 bedroom apartments in the complex.  They even suggested that the developer could convert a 2 and 1 bedroom unit into a 3 bedroom unit.

It turns out that the space my apartment was meant to occupy has been turned into 3 separate apartments, while the space above my terrace converted to two more apartments (none of which are 3 bedroom places!).  5 apartments would definitely be worth more than what I have paid for the 3 bedroom.  In place of my original apartment, the lot number in my contract now corresponds to a tiny 2 bedroom unit a few floors below with no large terrace… obviously I have no choice to rescind.

The Council application to put through this change was lodged in December 2013, so they have known about it for a while (but not told me).  It feels like to me that the developers have misused the rescission clause in the contract to allow alter the plans above and beyond what Council originally intended this to capitalise on the increase in property prices. 

I am now left out of pocket for cost of the bank guarantee and legal fees, and lost out on the capital growth in the market.  I feel like the developers were misleading and deceptive, and did not negotiate in good faith.

My legal advice is to walk away and wear the loss because of the cost of legal action.  This doesn’t sound right that a developer can so blatantly profiteer.

My fiance and I were looking forward to moving in and have been doing site visits to check on the progress.  We are very disappointed and planned to use the large balcony for our wedding next year. 

What are your thoughts?  Is this common practice?

 Angry and disappointed!

♦ Specific references including a link to a Newspaper Article, the Developer, the Builder, and the Property Address (inner city – Sydney) have been removed without in any way altering the tenor of the post. (Whale)