Contract Matters - NSW

What contract matters should purchasers be aware of?

The contract may contain matters such as:

• failure to stipulate the correct Purchaser entity (for tax or investment purposes),
• requirement to adjust land tax,
• requirement to release the deposit to the Vendor before settlement,
• lack of an appropriate condition to deal with your circumstances e.g. requirement to move into the property or have certain repairs done to the property before settlement,
• to deal with foreign ownership issues,
• requirement to allow the Vendor to stay on the property for a period of time after settlement,
• non-compliance of the swimming pool, works or structures on the property,
• contract conditional on certain events, e.g. the Vendor becoming the legal owner of the property in deceased estate sale,
• to provide for contemporaneous settlement of a related transaction including where funds are required from an existing sale.

Why is it important to review the contract with a legal expert before signing?

It is important to ensure the correct Purchaser entity is specified on the contract to avoid significant loan, tax and investment implications.

Prudent Purchasers should have the contract reviewed by a legal expert before signing to ensure they are aware of the parties’ rights and obligations. Depending on the Purchasers’ specific needs and circumstances, a legal expert can negotiate the contract terms with the Vendor’s legal representative to amend existing conditions and add additional conditions as required so that the contract is as favourable to the Purchasers as possible.

The existence of an unfair condition favourable to the Vendor (such as Vendor’s right to stay back at the property after settlement for no or low rent) or absence of conditions tailored to your specific situation (such as coordinating the settlement of related transactions) can lead to severe complications.

Addressing these concerns proactively can prevent legal and financial problems, ensuring that all terms are favorable and clearly understood by both parties. Proper legal advice and careful consideration of the contract’s details are essential steps in protecting your interests and ensuring a smooth transaction process.