Apartment buyer facing $40k shortfall as Bathla collapse puts discount offer at risk

When May agreed to buy a $789,000 off-the-plan apartment in north-west Sydney in 2023, an offer from the developer to reduce the price by 5 per cent as part of the deal was central to her decision.Three years later, her apartment remains under construction, the property developer behind it has collapsed, and there is no guarantee Bathla's discount will apply.May, a first-generation Filipino-Australian whose name has been changed because she fears speaking publicly could affect her dealings with the selling agent and her property purchase, said she and her husband had been wanting to buy their first home for many years but struggled to save a large enough deposit.May said she first came across Bathla's Marsden Park development through a Filipino community Facebook page, where she saw a post promoting low-deposit home ownership, with buyers able to exchange contracts with as little as $5,600 and pay the remainder through an interest-free payment plan with the developer.She said she learned about the 5 per cent Bathla developer discount payable at settlement after enquiring and meeting with agents from Paragon Realty Group.ABC News has seen screenshots of communications between May and the sales agent, which repeatedly refer to an arrangement under which May would pay a 5 per cent deposit and the developer would contribute a further 5 per cent at settlement — worth $39,450.In one message, the agent described the developer's contribution as a "5 per cent discount", while another referred to the "developer contributing another 5 per cent at settlement".A WhatsApp message to May referred to Bathla's offer as a "discount". (Supplied)'I trusted them'After Bathla entered voluntary administration last month, May asked whether the developer's 5 per cent contribution would still be honoured. The agent said they were seeking clarification from the administrators about how the "5 per cent incentive" would be dealt with.Paragon was also their main point of contact for other parts of the purchase, May said, telling them legal services could be arranged through the agency and that it had an in-house mortgage broker as well.May said she only reviewed the contract carefully when Bathla entered administration on August 25, and that was when she discovered the developer contribution was not included in the document."Looking back, of course, I wish I had checked the document, but I was promised by the agent, and I trusted them," she said."If not for this deal, we would never have purchased this apartment."An artist's impression of the Bathla development in Marsden Park. (Supplied)She now does not know whether Bathla will honour the contribution. If it is not, she and her husband could have to find close to $40,000."We're just not prepared for it. We don't know how we can manage," May said.The South St Marsden Park development has been taken over by private credit lender, Leda, owned by billionaire Bob Ell.The project does not fall in the current short-term funding arrangement backed by five Bathla lenders.May said she was told that the apartment was expected to be completed in early 2025, but the date had been pushed back several times and is now expected to settle in February 2027. Bathla Group's insolvency complicates the picture."That's pretty much what we talk and think about daily. Daily, like every minute," she said.May is seeking confirmation the contribution will be honoured.Residential developer Bathla entered voluntary administration in August with debts of more than $3 billion. (AAP: Dan Himbrechts)Contract leaves buyer in difficult positionUniversity of Sydney law professor Jason Harris said the contract in question required the buyer to pay the full deposit and contained an "entire agreement" clause, under which the buyer acknowledged they had not relied on promises outside the written agreement."This makes it very difficult for the buyer to enforce the 5 per cent promise under contract law," Professor Harris said.However, he said that did not necessarily leave the purchaser without legal arguments.Depending on the circumstances, possible avenues could include the legal concepts of estoppel or set-off.Estoppel, for example, can prevent a person from enforcing their strict legal rights where doing so would be unconscionable because of an earlier promise or representation, but the wording of messages and other correspondence would be important in establishing exactly what was promised and who made the representation.An artist's impression of the Marsden Park development by Bathla. (Supplied)Independent advice urgedSolicitor Jessie Icao said buyers should obtain legal advice independent of the developer, agent, broker, or other parties involved in a sale."You really need, before signing the contract, to see a solicitor, an independent solicitor or an independent conveyancer who can really explain the terms and conditions of the contract," he said."I do work with many first-generation migrants, and it is an issue that arises as they are unfamiliar with complexities of buying property in Australia, and will sometimes rely on the selling point given to them by sales agents."Looking back, May said obtaining independent legal advice was "something that we should have done at that time".The ABC has not established how many purchasers received the same 5 per cent offer as May.The ABC has contacted Paragon Realty Group, Bathla Group and Bathla's voluntary administrators, Teneo, about the incentive and whether outstanding offers would be honoured. No responses were received before publication.Previously, the administrators, Teneo, said they were in the early stages of a full reconciliation of deposits, but that the matter was complex and would take time.