Why You Should Always Have a Property Contract Reviewed Before Signing
Many property buyers sign contracts without obtaining legal advice, assuming that the contract is standard and that there is nothing to negotiate. This is a costly misconception. A property contract is a legally binding document, and the terms can vary significantly from one contract to another.
There is no such thing as a standard contract
While the Law Institute of Victoria produces a standard form contract, vendors and their solicitors frequently add special conditions that modify the standard terms. These special conditions can significantly affect your rights — for example, by limiting your ability to rescind if a building inspection reveals problems.
Cooling-off rights
In Victoria, buyers of residential property have a three-business-day cooling-off period after signing a contract. However, cooling-off rights do not apply to properties purchased at auction or on the same day as an auction. If you are buying at auction, you must have the contract reviewed before bidding.
Finance conditions
If you are purchasing with a mortgage, your contract should include a finance condition that allows you to rescind if your loan is not approved. The wording of this condition matters — a poorly drafted finance condition may not protect you if your lender approves the loan but on different terms than you expected.
Building and pest inspection conditions
A building and pest inspection condition allows you to rescind the contract if the inspection reveals significant defects. Not all contracts include this condition, and some vendors resist it. Your conveyancer can advise you on whether the condition is appropriate for the property you are buying.
Inclusions and exclusions
The contract should clearly specify what is included in the sale — fixtures, fittings, appliances, and any items the vendor has agreed to leave. Disputes about inclusions are common. Having the contract reviewed before signing ensures that what you think you are buying is actually what the contract says you are buying.
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