What is a Contract of Sale?
The contract of sale for a property sets out the rights and obligations of both the buyer and seller. At its heart it details the property being sold and the price being paid for the property. However, the contract of sale included much more than just the price paid for the property. It details when the price must be paid and how much of a deposit is required, it covers who is to pay for any taxes associated with the purchase and what happens in the event that any disputes arise.
For the sale and purchase of such an expensive and important asset, it is important to understand your rights and obligations under your contract of sale. The team of qualified lawyers at Serry Solicitors can help you understand and interpret the contract of sale and provide you with legal advice tailored to your circumstances.
A contract of sale is a legally binding document and there are consequences for not complying with your obligations under the contract. Breaches of a contract can include not paying the deposit when required or failing to pay the balance of the purchase price at settlement.
What is Included in a Contract of Sale?
Generally, the contract will start with the particulars of sale. This includes the names of the buyer and seller, the address of the property, the purchase price and the deposit. There’s also an important notice about the cooling off period and a warning if you are buying off-the-plan.
Next will come the general and special conditions. The special conditions are not standard and will include any requirement that the seller wants to add to the agreement. Special conditions can include anything from adding additional fees if the deposit is paid late or even a disclaimer about the functioning of solar panels on the property. As these conditions are not standard, it is always recommended that a solicitor reviews the contract before you sign.
Most contracts for the sale of land in Victoria will use a version of the Real Estate Institute of Victoria and Law Institute of Victoria pro forma contract. There are different versions of this contract so they will not always be the same. These pro forma general conditions will provide for amongst other things the following:
the vendor must ensure the property is in the same condition at settlement as at the day of sale;
the purchaser must pay all stamp duty which arises as a consequence of the sale;
the purchaser buys the property subject to any encumbrances shown in the section 32 statement; and
if a party breaches the contract the other party can serve a default notice providing the party with 14 days to remedy the breach or the contract will be at an end.
Lastly, the contract will include the vendor statement, also known as the section 32 statement. This is where the vendor must disclose all of the information required by section 32 of the Sale of Land Act, including the outgoings you can expect to pay yearly, which services are connected to the property and a copy of the title and the plan.
The title will reveal any restrictions or easements and should always be checked before you commit to buy. For apartments, there will also be an owners corporation certificate that tells you all about the function of the owners corporation.
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The contents of this article are general in nature only and do not constitute legal advice and should not be relied upon as such.
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