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Investors beware! Make sure you take advice or risk losing your investment
Jessica has a family trust, and decided to invest some of its funds into an apartment that was yet to be developed by an investment group.
She entered into an unconditional sale and purchase agreement without first obtaining any legal advice.
Jessica later received legal advice about the risks of the transaction but nevertheless paid the unusually high 30% deposit, over $90,000. Unfortunately, the investment group collapsed before the apartment was built and her entire deposit was lost.
In a recent decision, the Supreme Court held that an investor was unable to recover his deposit from his lawyers in similar circumstances as their advice did not cause his loss. On the contrary, the investor took no notice of their warnings as he was extremely confident in the business transaction.
Sometimes, when entering into an investment, there can be pressure just to ‘plough on ahead’ for fear of missing out. However, it is always wise to reflect on the possible risks and the independent advice about the investment. ‘She’ll be right’ just doesn’t cut the mustard when there is so much at stake!