PRACTICAL LEGAL ADVICE

If you are thinking of buying a residential property you usually sign a standard Agreement for Sale and Purchase of Real Estate (“contract”). The real estate agent will give you one of these. Otherwise you can contact me by email and I will send you one.

The standard contract is incomplete. You need to include a few special conditions that protect you in case there are problems with the property. A contract signed without any further special conditions put in is usually unconditional once it is signed by everyone. After that it is too late to get out of the contract if you change your mind about wanting to buy the property. Therefore you should almost certainly only sign what is called a “conditional contract” when you intend to make an offer on a property. The reason for using further special conditions is that if they

• are not able to be met (for example the bank won’t lend you the money you need) or

• are not satisfied (for example the builder’s report indicates that the house is in bad condition and needs a lot of repairs)

then the contract is not binding and it can be cancelled (in writing) by you.

Here are some standard further special conditions that you might want to include in your contract. You may not need all of them so just select the ones that are relevant to you. You must specify how much time will be required to satisfy the special conditions. I have used 15 working days to allow for plenty of time to work through them. It can be shorter or longer, depending on whether everyone agrees. You would need to discuss this with the vendor/s.

“Further Special Conditions:

20.0Purchase Price
Any purchase price nominated in this agreement is contingent and conditional and is not under any circumstances final and binding unless subsequently and expressly or implicitly confirmed by the nominated Purchaser(s) on and when any notice that this Sale and Purchase Agreement has been confirmed as unconditional. Unless and/or until such time the nominated or any other purchase price is negotiable and still subject to mutual and final agreement.

21.0Conditional on Building Report, Valuation Report and LIM
This Sale and Purchase Agreement (“agreement”) is expressly conditional upon, unless waived in writing by the nominated Purchaser(s) and such written notice has been given to the Vendor(s), the nominated Purchaser(s) obtaining

•A suitable building report; and/or
•A suitable valuation report; and/or
•A LIM

that is or are satisfactory in all respect to the nominated Purchaser(s). This or these special condition/s is or are inserted entirely for the benefit of the nominated Purchaser(s). This or these special condition/s shall apply for [15] working days from the date the agreement is signed and dated by both parties.

22.0Title
This agreement is expressly conditional upon, unless waived in writing by the nominated Purchaser(s) and such written notice has been given to the Vendor(s), upon the title to the property or properties being approved by the nominated Purchaser(s) solicitor within [16] working days from the date the agreement is signed and dated by both parties. This special condition is inserted entirely for the benefit of the nominated Purchaser(s).

23.0Notices
Any communication by facsimile between the parties’ respective nominated fax numbers shall be deemed to be effective, legal and (if necessary) binding on both parties pursuant to the Contracts Enforcement Act 1956/Property Law Act 2007 and shall be deemed to have been sent and received once the sender has obtained written confirmation that the facsimile has been transmitted to the correct addressee fax number.

24.0Inspection
This agreement is expressly conditional upon the nominated Purchaser(s) inspecting the property on the day before any nominated settlement date and being satisfied about the state and condition of the property such that if the nominated Purchaser(s) reasonably believe/s that the property is not satisfactory and needs repairs and/or cleaning then the Purchaser(s) shall be entitled to hold back part of the purchase without affecting settlement to enable any repairs and/or cleaning to be effected and completed to a satisfactory level either by the Vendor(s) or a third party if necessary in which case at least some of the retained money shall be used to pay for the costs of such services provided by any third party.


25.0Master Builder’s Guarantee
[If applicable] This agreement is expressly conditional upon the Vendor(s) providing a Master Builder’s Guarantee that is satisfactory in all respects to the nominated Purchaser’s/(s)’ solicitor. This special condition is inserted entirely for the benefit of the nominated Purchaser(s). For the benefit of any doubt this special condition is an essential term of this agreement and is a strict condition precedent of any settlement unless waived by the Purchaser(s) under a power of discretion.

26.0Body Corporate Levy
[If applicable] This agreement is conditional upon the Vendor(s) disclosing in writing to the Purchaser(s):
•whether or not there are any outstanding body corporate legal issues (claims or proceedings issued for or against the body corporate or which are in reasonable contemplation); and

•whether or not the standard body corporate rules prescribed by statute have been changed or amended; and

•the body corporate levy –

within working days of the date this agreement.”