A Queensland woman has been left devastated after losing her dream home, and potentially her entire A$29,000 deposit, because of an alleged banking error.
Dr Loretta McKinnon, a 43-year-old epidemiology academic, paid A$580,000 for a three-bedroom, one-bathroom Brisbane home that was meant to settle on September 22.
However, she claims the Commonwealth Bank was too late to finalise the settlement because an incorrect box had been ticked in the documents.
By the time the bank fixed the mistake and the documents were processed it was 4.13pm, 13 minutes after the 4pm settlement deadline. As such, the contract was terminated after the seller refused to grant an extension.
"Thirteen minutes was what broke the deal," McKinnon said.
Her A$29,000 deposit is now in limbo while the lawyers fight about whether the seller is entitled to keep it, as per Queensland law.
She has also had to shell out tens of thousands in legal fees and loan deferrals and has become so distressed that she was admitted to a mental health ward last Thursday following two months of getting nowhere with the bank or the vendors.
"I am losing thousands of dollars every week from the fallout," she told news.com.au. "I can't eat, sleep or function. Many days I stay in bed and cry."
The former epidemiologist, who no longer works because she has a disability, says she's always wanted to buy her own home.
McKinnon moved into a rental property in the Brisbane suburb of Windsor knowing that it would soon be up for sale and intending to buy it.
It was quite run-down but McKinnon, an avid DIY fan, was looking forward to doing a lot of the renovations herself.
She attended the auction and won with a A$580,000 bid.
As she is not currently working, she wasn't eligible for a home loan and had to look elsewhere to get the money.
A 90-day settlement period was granted so she could sell two investment properties, which she'd held for nine and 15 years, to get enough money together. The rent generated from those properties was a significant source of her income.
However, during the three months before settlement, property prices in Windsor boomed, with the house next door selling A$200,000 higher than what McKinnon had won the auction with, just two weeks later.
"The flats I bought were an investment hoping to one day have a home. It was right within my grasp," McKinnon explained.
Her father, a farmer, also lent her his life savings to make her dream a reality.
But on settlement day, everything started to go wrong.
The documents were processed at 4.13pm on settlement day but by then it was too late, with close of business in Queensland being at 4pm sharp.
In most other Australian states a two-week grace period is given if a settlement goes under, but not in Queensland.
Legally, the seller was allowed to terminate the contract immediately and keep McKinnon's deposit.
The deal collapsing had a domino effect as the selling of McKinnon's other two properties to fund her home purchase was part of a "linked settlement" so it hinged on the transaction going through.
This meant she immediately faced thousands of dollars in penalties payable to the two buyers of her investment properties.
"It seems particularly cruel. I sold my properties and then he [the seller] pulled the pin," she said.
She estimates that she's lost hundreds of thousands overall because: "The two places I sold were income-producing assets, I don't get the rent from them every week [anymore]. The mortgage was going to be less than what I'm paying for rent."
She also had to pay A$26,000 to the bank in Covid-19 loan deferrals for her other properties, which ended up being unnecessary as the sale never went through.
McKinnon also pointed out that she sold her two investment properties "quickly and cheaply" to make the settlement deadline. She estimates she could have got significantly more for both if she hadn't done so in a rush.
"It's disadvantage upon disadvantage," McKinnon said.
"My dad's money is tied up, they're threatening to take the deposit, just the stress of it all … So horrendous."
News.com.au has contacted the vendor but received no response.
McKinnon has been begging the bank and the vendor for the last two months to fix the situation.
She says she is particularly distressed because she doesn't think she'll be able to find a house like that one again.
It is 4km from the Brisbane CBD, has a large yard, 809sq m in total, and most importantly, is affordable as she doesn't expect she will ever return to work.
"Disrupting assets I'd held for 15 and nine years, I'd have never done that for a place worth A$580,000," she explained.
"It was only because I knew I'd done very well at auction that I proceeded to sell my places."
She added: "I'll never get to own a home. Homelessness would be temporary, missing the chance to own a home will be for life."
In a statement, a spokesperson for the Commonwealth Bank said they were aware of the situation.
"We understand the settlement of the property Dr Loretta McKinnon had wished to purchase was unable to be successfully completed," they said to news.com.au.
"Unfortunately, necessary information required for settlement was not provided in a timely manner.
"We understand the difficult and stressful situation a delayed or incomplete settlement can cause a customer and we are committed to working with Dr McKinnon to see how we can best assist."
After this statement was issued, McKinnon said that she was offered A$10,000 to cover the cost of her legal fees.
The Commonwealth Bank claims that McKinnon's legal team missed a deadline which led to them missing a deadline.
However, both McKinnon and her solicitor denied this, saying that the sale fell through because the bank had not given authority for her funds to be drawn in time.
Calls for Queensland laws to change
Professor William Duncan, an expert in property law at the Queensland University of Technology, said these kinds of cases called to attention that the state's property laws may need a major rethink.
"In a sense, it is sudden death in Queensland. The time of the settlement is critical in Queensland," he previously told news.com.au.
He said the 14-day grace period given in other states "saves this kind of this thing from happening. Little things can go wrong, which is not the fault of either party".
In other states, it takes a little longer to settle, between six to eight weeks compared to four or five weeks in Queensland.
"The law in NSW (and other states) is probably a little better," he said. "I see nothing wrong with a longer period. This has been talked about on and off for years."
Where to get help:
• Lifeline: 0800 543 354 (available 24/7)
• Suicide Crisis Helpline: 0508 828 865 (0508 TAUTOKO) (available 24/7)
• Youthline: 0800 376 633 or text 234 (available 24/7)
• Kidsline: 0800 543 754 (available 24/7)
• Whatsup: 0800 942 8787 (12pm to 11pm)
• Depression helpline: 0800 111 757 or text 4202 (available 24/7)
• Anxiety helpline: 0800 269 4389 (0800 ANXIETY) (available 24/7)
• Rainbow Youth: (09) 376 4155
If it is an emergency and you feel like you or someone else is at risk, call 111.