The contract for sale of land: what to check before you sign

The contract for sale of land is the document that binds you to buy or sell a property. Once contracts are exchanged, you are committed, so the time to understand the contract is before you sign, not after. This guide covers what is in it and what to check.

What the contract is

Every property sale in NSW runs on a contract for the sale of land. The seller's side prepares it, and it sets out the parties, the property, the price, the deposit, the completion period, and the terms of the sale. Attached to it are a set of disclosure documents the seller must provide.

The contract is not just a formality to sign at the end. It is where the risk sits, and the standard form is often amended by special conditions that change the deal. Reading it properly is the single most valuable thing we do for a buyer before exchange.

Vendor disclosure: what must be attached

Under section 52A of the Conveyancing Act 1919 (NSW) and the Conveyancing (Sale of Land) Regulation, the seller must attach certain prescribed documents before you sign. These generally include the title documents, a drainage or sewerage diagram, and a planning certificate issued by the council under section 10.7 of the Environmental Planning and Assessment Act. If the property has a swimming or spa pool, pool compliance documents are also required.

If a prescribed document is missing, you may have a right to rescind the contract within a set period. A term that tries to exclude the disclosure obligation is generally not effective. This is one reason the contract should be reviewed by your solicitor before you commit.

What to check before you sign

When we review a contract for a buyer, these are the areas we focus on.

• The property and inclusions. That the contract matches what you are buying, including the fixtures and inclusions, and the correct title and boundaries.
• The title and any encumbrances. Easements, covenants, and restrictions on the title that could affect your use of the land.
• The planning certificate. The zoning, permitted use, and any proposals or restrictions affecting the property.
• Special conditions. Any conditions the seller has added, which can shift risk onto the buyer. These are where the surprises hide.
• The deposit and completion. The deposit amount, the completion period, and anything that affects your finance timetable.
• Cooling-off. Whether you have cooling-off rights, and whether you are being asked to waive them. There is a separate article on cooling-off in this series.

Why review before exchange matters

The common and costly mistake is signing first and asking questions later. Before exchange, a problem in the contract can be fixed, negotiated, or made a reason to walk away. After exchange, you are committed, and your options shrink dramatically. The small cost of a review before you sign is cheap insurance against a large and binding mistake.

How we help

We review the contract and the disclosure documents, explain what they mean in plain English, raise and negotiate changes with the seller's solicitor, and tell you clearly whether anything should give you pause before you exchange. For a buyer, this is the most important stage of the whole purchase, and it is where good advice earns its keep.

Frequently asked questions

What documents must the seller attach to the contract? Prescribed documents including the title documents, a drainage diagram, and a section 10.7 planning certificate, plus pool compliance documents if there is a pool.

Can I get out if a required document is missing? You may have a right to rescind within a set period if a prescribed document is not attached. Get advice quickly if you think one is missing.

What are special conditions? Extra terms the seller adds to the standard contract, which can change the deal and shift risk to the buyer. They are a key thing to check.

Should I have the contract reviewed before I sign? Yes. Before exchange a problem can be fixed or negotiated. After exchange you are committed. A review beforehand is the cheapest protection you will get.

Keep reading

• Property and conveyancing
• Buying a home in NSW: the conveyancing process explained
• Cooling-off periods when buying property in NSW

This article contains general information only and is not legal advice. For advice about your situation, please contact us. Liability limited by a scheme approved under Professional Standards Legislation.