The process of buying and selling residential property begins with a written contract. This is an essential part of the process, binding both parties to the conditions of the contract .
What does the contract include?
The contract, also called the agreement for sale and purchase, includes details of exactly what is being bought or sold. The description usually contains:
The legal description of a residential property
Details of the current owner
Details of the purchase price
When the funds are to be paid
Any conditions that either party may have
Details of any chattels or good will that goes with the purchase
Whether the purchase price includes G.S.T (Goods and Services Tax)
An agreement for sale and purchase is usually on a standard form but that form can be altered in many ways. It should not be assumed that any particular agreement is standard.
What special conditions can be included?
Special conditions of the agreement may include:
Time to allow the purchaser to raise finance
Time to allow for the obtaining of a builder’s report
Time to get a Land Information Memorandum (LIM)
Time to get lawyer or accountant to check and approve the contract
Occasionally, the agreement might make it clear that the contract is a “back up” to be put in place if a previous deal falls through.
When does a contract become binding?
Once an agreement is signed it is binding on the people or company that have signed it. Usually the agreement can only be broken if the conditions contained in the agreement are not met, for example, if the purchaser genuinely can’t raise sufficient money within the specified time to carry on with the purchase.
For this reason, you should have any agreement checked by your legal professional before you sign it to ensure that it fulfils your needs as a vendor (if you’re selling), or as a purchaser (if you’re buying).
Your legal professional will also check the details of the title and advise you of things you ought to know about the nature of the title, or right of occupancy that you are purchasing.
There may also be related documents that need to be inspected or prepared before the contract is completed.
How can Property Law Service help?
If you’d like us to check an agreement for you before signing or give you advice on the legal steps about signing an agreement, please contact us for pre purchase advice or speak to one of our property law specialists on 0800 PPTYLAW (0800 778 952) or +64 6 3705102.