Understanding Victorian Contract of Sales

The team at Cahill Rowe Conveyancing in Geelong have sound knowledge and experience when it comes down to contracts. In this blog, we discuss the components of a Contract of Sale in further detail.

A Contract of Sale is a legal and binding document containing the terms and conditions agreed upon between a seller and a buyer concerning property or goods. A qualified property lawyer or licensed conveyancer should prepare the property agreement, and the buyer should engage a lawyer or licensed conveyancer to review the contract from their end.

Essential components of a property Contract of Sale

For your property sale contract to be viable, it must include specific information including:

• List of parties involved in the transaction: the Vendor and the Purchaser, their names, and present residential addresses.
• Name of your real estate agent (if you are using one).
• Details of the legal practitioners or conveyancers that you and the buyer have engaged.
• Details of the property including the physical dimensions of the property plus a list of the chattels included with the property.
• Elements that validate the contract, including the offer, acceptance, and intention to create legal relations.
• Purchase price of the property and the date of the payment, which may include a deposit upfront and a remaining balance to be paid after the contract is signed.
• Date of the transfer of ownership and an agreement to transfer the ownership of the property by the seller to the buyer on that date.
• Any special conditions such as the ‘subject to finance’ clause.

Additionally, the property Contract of Sale must note whether the purchase price includes or excludes the goods and services tax (GST). If the tax is included, the contract must illustrate how the amount was calculated.

Other considerations to be taken into account for a Contract of Sale

While a standard Contract of Sale encompasses your sale’s necessary information, there are additional considerations that may need to be taken into account. Engaging one of the best conveyancing property lawyers in Geelong means additional requirements you may want or need can be drafted into the Contract of Sale clearly defining your legal obligations.

General covenants in a Contract of Sale

General covenants are added to a standard Contract of Sale:

• Terms and conditions relating to loss or damage to the property before settlement
• Breach of contract consequences
• Delay in settlement penalties
• Transfer charges
• Whether the contract is subject to financial approvals or tenancy

Easement rights

In a Contract of Sale, you may find an easement right which is the right to cross or otherwise use a portion of someone else’s property for a particular purpose. Common easements can include a shared driveway or electrical/water/power mains. Registered easements on a certificate of title remain when the land is bought and sold and can only be removed upon the easement holder’s mutual agreement and the landowner.

Sunset clause

Incorporating a sunset clause in a Contract of Sale sets out specific parameters that must be met; otherwise, the agreement will no longer be effective. For instance, a sunset clause may be reaching a settlement by a specific date or a buyer could state the construction of buildings must be complete in a particular period of time. Incorporating a sunset clause protects both the buyer and seller in specific circumstances.

Cooling-off period

When purchasing a property in Victoria, Section 31 of the Sale of Land Act 1962 states that the buyers have three business days to change their mind and withdraw from the Contract of Sale no matter when the vendor signs the contract. The cooling-off period lets a buyer end the Contract of Sale without any penalties. The cooling-off period has some conditions attached to it though so you should speak to the team at Cahill Rowe Conveyancing before you intend to rely on a cooling-off provision.

Changes and additions to Contracts of Sale

While a typical Contract of Sale is very straightforward, it is crucial to have it reviewed to ensure all your legal rights are protected whether you are a buyer or a seller.

Cahill Rowe Conveyancing’s combination of expert legal advice along with experience drafting and reviewing property-related agreements will ensure your legal rights are protected. If you require legal guidance on a property or conveyancing matter, contact the best property lawyers in Geelong at Cahill Rowe Conveyancing on (03) 5292 1994 or email madi@cahillconveyancing.com.au.

Servicing Barwon Heads, Geelong, Ocean Grove, Torquay, Anglesea, Portarlington, regional areas around the Surf Coast and Bellarine Peninsula and all of Victoria, Cahill Rowe Conveyancing is your full-service conveyancing experts.

Contact our knowledgeable team on 03 5292 1994 for your no-obligation consultation.