ILN: BUYING AND SELLING REAL ESTATE - AN INTERNATIONAL GUIDE

[BUYING AND SELLING REAL ESTATE IN AUSTRALIA]

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DOCUMENTATION Sale Documents to be in Writing

conditions. When preparing a contract of sale for an off-the-plan purchase, conditions imposed by statute must be included. The requirements for each State and Territory vary. Disclosure Requirements The vendor disclosure requirements vary for each State and Territory. In some States, a vendor is required to disclose certain information about the property in the form of a vendor’s statement or disclosure statement or by providing copies of certain prescribed documents (e.g., title search, plan, drainage diagrams, registered dealings on title and council certificates). In other parts of Australia, the disclosure regime does not exist or is very limited, with a requirement for the vendor to provide some statutory warranties about the property. It is important that a purchaser obtains legal advice and conducts its own due diligence enquiries and is satisfied in relation to all aspects of the property. Statutory disclosure obligations provide some protection to purchasers. Non-compliance by a vendor with statutory disclosure obligations may give a purchaser the right to terminate a contract. Negotiated Amendments If a purchaser or vendor has concerns or issues regarding the property, then the parties can negotiate any required amendments to the proposed contract before it is signed and exchanged. For example, does the contract need to be conditional on the purchaser undertaking due diligence enquiries or certain works or obtaining reports which must be satisfactory to the purchaser? Is there a particular issue concerning the property (e.g., contamination) which needs to be in a special condition? Is the vendor obliged to carry out works before settlement?

Each State and Territory has its own specific legislation, which requires that a contract for the sale or disposition of an interest in land must be in writing and signed by the person to be charged. Contract of Sale Each State and Territory has available its own standard contract of sale which is in a form approved by the relevant peak body for lawyers (e.g., applicable Law Society or Law Institute) or real estate agents (i.e., the Real Estate Institute for the State or Territory) or both. The contract of sale includes among other things the parties’ details, the property (and any inclusions) to be purchased, the price and the settlement date. It is important for purchasers to obtain legal advice before entering into a contract of sale and for vendors when having a contract prepared. It is becoming common for contracts to be signed electronically. There has been an evident shift in the acceptance of electronically signed deeds, guarantees and contracts as a result of the COVID-19 pandemic, with the Corporations Act 2001 (Cth) being amended to allow (amongst other things) officers of corporations to electronically execute documents on behalf of a corporation. However, whether or not banks and other financial institutions are prepared to accept electronically signed deeds, guarantees and contracts is an evolving matter. Prescribed Conditions Generally, a contract of sale will contain standard or general conditions of sale, with the ability for the parties to include additional conditions as “special conditions” or to amend the standard or prescribed conditions. In terms of priority, the special conditions of a contract will usually prevail over any standard or general

ILN Real Estate Group – Buying and Selling Real Estate Series

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