Pre-Purchase Contract Review

Written by Nanki Kaur

During these uncertain and rapidly evolving times, buying a property can be exciting yet highly stressful. Prior to entering into binding terms, one must endeavour to understand what it is that they are agreeing to.

It is important that particulars of sale are being reviewed carefully prior to signing any paperwork provided by the estate agent, lawyer or purchaser. Consideration must be given to the following:

1. Particulars of sale, such as the certificate of title;

2. Goods sold with the land;

3. Deposit amount and due date;

4. Contract price;

5. GST;

6. Whether the contract is subject to a current lease;

7. Whether the contract is subject to finance; and

8. Any special terms and conditions.

Each contract will vary depending on the type of purchase being made.

If land is purchased prior to its registration, the purchaser should have regard to sunset clauses and implications of same. A sunset clause is a special condition in a contract of sale that provides a time limit by which the vendor or the developer must register the plan of subdivision by. Sunset clauses are typically found in off the plan contracts.

If the developer/vendor has not obtained the registration of the plan of subdivision before the time stipulated in the contract, the vendor or the purchaser is able to terminate the contract. The vendor must provide give at least 28 days prior written notice to the purchaser. The purchaser/s are not obliged to consent to the vendor’s proposed rescission of the contract of sale.

Many practical and fiscal implications can arise for purchasers and vendors if they have not received specific legal advice with respect to the contract they are entering. It is highly recommended to receive legal advice prior to signing legally enforceable contracts.

The information provided in this article is general advice only. Should you have any queries, please do not hesitate to contact our conveyancing team on 9311 8911 or conveyancing@ferraro.com.au.