24 Aug 2018

Check that contract

As we approach a traditionally busy spring selling season in the Australian real estate market, it’s important to make sure home buyers and investors review their contracts before proceeding to unconditional status.

Unfortunately many purchasers can get so distracted by the excitement of buying a new property that they fail to read the small print.

If rushing a purchase or exchanging contracts before your solicitor has had a chance to review the document, smaller details can slip through unnoticed until sometimes it’s too late to rectify.

It’s recommended that buyers obtain a contract review BEFORE proceeding to unconditional status (or preferably before signing anything) to minimise the risk of expensive mistakes when it comes to purchasing.

Here is REBAA’s quick checklist of the most essential details you should be double checking before you sign on the dotted line:

  1. Inclusions and exclusions – many a vendor has taken the opportunity not to include items that otherwise you may have assumed came with the property. Common items that are sometimes excluded are curtains, dishwashers, pool equipment and light fittings. Also be sure to read for any exclusions and if not happy that these are going, renegotiate.
  2. Completion date – check that the date suits you and you are fully aware of the implications here. Many contracts stipulate a number of days after the date of this contract, most commonly 42 days. Alternatively, should dates be vital to you and you want to ensure settlement is on a particular date, with agreeance from the vendor, you are permitted to strike out this line and insert a specific date instead.
  3. Vacant possession or subject to existing tenancies – most property are sold with vacant possession to you, the purchaser, however be aware that if there is currently a tenant in place the ‘subject to existing tenancies’ box may well be ticked here. It is important to realise that if you want the place empty and you’ve not checked this box, you may well inherit a tenant upon settlement.
  4. Land tax – is it adjustable? – On the NSW sales contract for example, if the YES box is marked, be aware that you may be up for unwanted land tax costs as you will have to reimburse the vendor for land tax based on the proportion of the year you each own the property. For more information on land tax and ramifications visit www.osr.nsw.gov.au and for other states please ensure you read the fine print.