Special Conditions in a Contract of Sale: What Property Buyers Should Check Before Signing

When buying a property, it is easy to focus on the purchase price, deposit and settlement date. However, the special conditions in a Contract of Sale can significantly affect your rights and obligations as a buyer.

Special conditions may deal with finance, inspections, repairs, settlement arrangements or other matters specific to the transaction. Understanding exactly how these conditions operate before signing can help identify potential risks and avoid unexpected issues later.

Property contracts, terminology and legal requirements differ between Australian states and territories. The effect of any special condition should therefore be considered in the context of the particular contract and the jurisdiction where the property is located.

What Are Special Conditions in a Contract of Sale?

Special conditions are additional terms included in a property contract to address circumstances specific to the property or transaction.

They may add to, modify or qualify other terms of the contract. A special condition might impose an obligation, create a deadline, make the purchase dependent on a particular event or set out what happens if an agreed requirement is not met.

Importantly, a special condition should not be assumed to protect the buyer simply because it appears in the contract. Its legal effect depends on how it is drafted.

Common Special Conditions When Buying Property

The conditions included in a property contract will depend on the transaction. Buyers may encounter conditions relating to:

• Finance approval

• Building and pest inspections

• Sale of the buyer's existing property

• Repairs or works to be completed before settlement

• Fixtures and fittings included in the sale

• Access or possession before settlement

• Particular settlement requirements

For example, a subject to finance clause may make the purchase conditional on obtaining finance within a specified period. A building and pest condition may provide certain rights depending on the inspection results and the wording of the condition.

What Should Buyers Check Before Signing?

When reviewing special conditions, it is not enough to simply confirm that a condition is included. Buyers should understand exactly how it works.

For each special condition, consider:

• What needs to happen? The required outcome or obligation should be clear.

• Who is responsible? Determine whether the obligation sits with the buyer, seller or another party.

• What deadline applies? Contractual timeframes can be important.

• Is notice or evidence required? Some conditions require particular steps to be followed.

• Can the condition be waived? Understand who may waive it and the effect of doing so.

• What happens if it is not satisfied? The contract may provide particular rights or consequences.

• Does it change another contract term? A special condition may alter how another part of the contract operates.

A condition that initially appears protective may operate differently than expected if its wording, timeframe or procedural requirements do not suit the buyer's circumstances.

Can Special Conditions Be Negotiated?

Special conditions may be negotiated before a Contract of Sale becomes binding where the parties agree to the proposed terms.

Depending on the transaction, a buyer may request a condition relating to finance, inspections or another matter relevant to the purchase. A seller may also propose special conditions that create additional obligations or alter the operation of the contract.

This is why a property contract review before signing can be important. Once a buyer enters into a binding contract, changing an agreed condition may require the agreement of the other party or may not be available at all.

Why Contract Review Before Signing Matters

Special conditions can affect important aspects of a property purchase. Unclear wording, short deadlines or unexpected obligations may create difficulties if circumstances change during the transaction.

Having the Contract of Sale reviewed before signing can help you understand the conditions, identify terms requiring further consideration and determine whether proposed amendments should be discussed before you become legally committed.

How Ace Legal Services Can Help

Ace Legal Services assists property buyers with reviewing Contracts of Sale before signing.

We can help explain special conditions, identify potential contractual risks, clarify your obligations and advise on proposed changes having regard to the property transaction and the applicable jurisdiction.

Final Thoughts

Special conditions in a Contract of Sale should not be treated as standard wording that can simply be overlooked. What matters is understanding what each condition requires, when it must be satisfied and what happens if it is not met.

Reviewing these terms before signing can help you make an informed decision and understand the obligations you are agreeing to.

Buying a property? Have your Contract of Sale reviewed before signing so you understand the special conditions and your legal obligations.