Rayjon to appeal court finding that valuers were blocked from Vantage site, stalling buyers’ loans

Lawyers for Gold Coast “mum and dad buyers” say their average deposit of $60,000 for units could have been lost after a developer delayed them from getting a financial valuation.

Lawyers for Gold Coast “mum and dad buyers” say their average deposit of $60,000 for units could have been lost after a developer delayed them from getting a financial valuation.

The contracts for off-the-plan properties were signed in 2021 with the deposits ranging from $23,500 to $95,500 each – in the meantime their property’s value increased by up to $300,000 as there were delays in the build of the apartment tower.

The 23 buyers of 15 units in Vantage View tower at Benowa took Royal Pines Projects to court after claiming delays by the developer meant valuers had been blocked from the property until a week before payment was due – potentially preventing them from getting finance in time.

Broadbeach Law Group which represents the buyers have called it a “David versus Goliath” battle which could have led to a multimillion-dollar “windfall” for developers if buyers walked away and lost their deposits.

Royal Pines Projects is solely directed by developer John Hembrow – who is the uncle of influencer Tammy Hembrow - and is part of the Rayjon Group.

The fifth and final stage of Rayjon Group’s $200 million master planned Vantage community View, features 120 apartments with a mix of three bedroom, two bedroom and for the first time, one bedroom apartments, spread over 15 levels.

View was the final tower in Rayjon’s $200m Vantage development, which has seen more than 260 new apartments take shape near Royal Pines Resort.

Construction of View started in 2021 and initially slated for completion in July 2023 – but the project’s builder, GCB Constructions, collapsed in May of that year, leaving it temporarily without a builder.

A Judgment of the Brisbane Supreme Court, involving 23 buyers in the project contacted the developer on July 1, as the project neared completion, asking for their valuers to gain access.

Instead of immediately arranging access, the developer contacted them on July 1, fixing the July 16 settlement date.

The developer only facilitated access for vendors from July 8, after the buyers launched court action, a date the buyers said gave them inadequate time to finalise their loans and meet the July 16 settlement.

Royal Pines had asserted that despite it was under no obligation to grant access to the building, it had not refused access but could not previously grant it due to ongoing works on site.

John Hembrow.

Craig Hembrow.

According to the judgment, the Royal Pines company argued the settlement date should not be delayed as none of the contracts were subject to finance, meaning the developer had no implied obligation to co-operate with the buyers.

Judge Peter Applegarth disagreed, saying there was implied knowledge of finance being required in the contracts.

Judge Applegarth found the developer had “hindered or precluded the buyers from obtaining the finance required to complete on the appointed settlement date”.

He said it was widely understood many buyers would require finance to purchase a property.

“An exceptional buyer who carried the settlement sum around in a knapsack might not have availed himself or herself of the opportunity to obtain finance. Most individuals, including the buyers, would,” the judgjment said.

The buyers were granted extra time for settlement. Royal Pines has appealed the case.

Broadbeach Law Group director Brodie Hatswell said buyers entered into contracts which did not include a typical 14 or 21 days “subject to finance” clause.

He said it was common in many off-the-plan purchases for buyers to obtain finance to complete the purchase despite the contract not being expressly subject to finance and for developers to allow a purchaser’s valuer on site to assist the buyer to obtain finance.

As completion neared, buyers requested access from the developer for valuers to inspect

apartments to satisfy a standard lender’s condition, Mr Hatswell said.

View features 120 apartments with a mix of three bedroom, two bedroom and one bedroom apartments, spread over 15 levels.

“The developer’s conduct in failing to respond caused our firm to file an urgent proceeding on behalf of the buyers to protect their rights in the matter,” Mr Hatswell said.

Otherwise the developer could terminate the contracts, keeping 15 deposits averaging $59,350.

The apartments could be sold in a significantly stronger current market “with an estimated

increase in prices of similar properties of $200,000 to $300,000”.

“For legal practitioners and stakeholders in the real estate industry, this case serves as a critical reminder of the implications of implied duties in contracts and the importance of upholding mutual obligations in good faith,” Mr Hatswell said.

Rayjon CEO Craig Hembrow confirmed Royal Pines had appealed the case, adding that “13 of the 15 buyers that have taken us to court settled on the due date”.

“After GCB Constructions went broke, our capable team has been laser focused on delivering 120 quality apartments and only three apartments did not settle on the due date. We have always honoured our contractual obligations,” he said.

“I cannot comment on specific details, however I can say that purchaser requests for valuer inspections were granted the day after it was safe to do so.

“We hope to have this matter resolved in the courts as quickly as possible so we can conclude this unfortunate dispute.”

Mr Hembrow said the potential revised prices for apartments if contracts had not gone ahead had not factored into their treatment of buyers.

Originally published as Rayjon to appeal court finding that valuers were blocked from Vantage site, stalling buyers’ loans