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Real Estate Industry
November 3rd 2005
BLISSFUL IGNORANCE OF WRAP VICTIMS
Thousands are blowing in the wind.
This comment is in response to a recent legal case in which a wrap contract was ruled to be unjust. The contract was cancelled and the wrapper was forced to pay compensation to the buyers. It's a decision that could have huge ramifications for wrapping.
I just wanted to know if the "Wrap Contract" in question is one from Steve McKnight or another "home-made" job.
Was the Wrapee not able to put a caveat on the property to secure themselves at least a little bit?
We are wrapees and are very happy - yes we pay more, but we recently gained some equity in the rising market, so it isn't all bad.
If you wish to send a question or comment to Neil Jenman you are most welcome. Neil tries to read every e-mail and respond personally. We have posted some of the common questions together with those we feel may help you. Thank you for your interest.
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Thanks for your message.
I believe the wrap contract was similar to the contract commonly used by wrappers – many of which emanate from lawyers recommended by McKnight and other wrap spruikers. These contracts are generally ghastly documents for buyers.
It appears, however, that this particular contract was less severe than most others, which means the same legal ruling may now readily apply to thousands of other wrap contracts.
This offers great hope for wrap buyers such as yourself.
Unfortunately, I feel that your current happiness is typical of the blissful ignorance of many wrap buyers. They have no real comprehension of just how much they are in constant danger of losing everything they have paid – and often through no fault of their own.
By not having your name on the title, it's like walking a tightrope above a crocodile infested swamp without a safety net. Yes, you may be happy now, but one puff of wind and you'll fall into the jaws of the crocs.
If the wind does blow the wrong way (at any time during the term of your contract, which can be up to 25 years), you will lose your home, your deposit, your payments, your improvement costs, your expenses and, worst of all, your equity.
You'll be left with nothing. The wrapper could get everything.
You and your family would call the loss of your home a tragedy. Wrap spruikers such as John Burley and Steve McKnight call it an "opportunity" [for them].
And please, don't let any spruiker fool you into thinking that a caveat is a safety net. Check with an independent lawyer (not one recommended by a spruiker) and you'll discover how dangerous a predicament you are in.
I hope, during your years of making payments to the wrapper, that no ill winds come blowing your way.
If so, we'll be here to help you.
To read the article, TRIBUNAL RULES WRAP CONTRACT "UNJUST", please click here
.