Special conditions in a NSW contract for sale: what to look for

Most NSW residential sales use a standard form contract. The standard printed clauses are fairly balanced. The special conditions added at the back by the vendor's solicitor are where the balance can shift, and they're often 10 to 30 pages long.

Here are the conditions worth reading closely. Your solicitor or conveyancer can negotiate many of them before you exchange.

1. "As is" and no-claims clauses

Many contracts say the buyer accepts the property in its present condition and can't make any claim, objection or requisition about its state of repair, defects, or whether improvements comply with council approvals. Read this together with your building and pest report: if the report finds a problem, a clause like this can mean the cost is yours.

2. Late completion penalties

If you can't settle on time, special conditions often charge interest on the balance of the price for every day late, sometimes at a high rate, plus the vendor's legal costs for issuing a notice to complete. Check the rate and make sure your finance and any sale of your current home can realistically meet the settlement date.

3. Settlement period

The usual settlement period is six weeks (42 days), but contracts can set something shorter or longer. A short settlement can be hard to meet if you're waiting on finance or selling another property.

4. Deposit terms

Look at how much deposit is required (usually 10%), whether a smaller deposit or a deposit bond is accepted, and whether the vendor can have the deposit released early to use for their own purchase. Early release puts your deposit at more risk if the sale falls through.

5. Strata levies and adjustments

For apartments, check who pays special levies raised before exchange, between exchange and settlement, and after settlement. Special conditions often make the buyer responsible for levies the vendor would otherwise pay. Read this alongside the strata report's minutes for levies that are coming.

6. Vendor rights to rescind or delay

Some conditions let the vendor cancel the contract or delay settlement in certain situations, such as if they can't buy their next property, or limit what the vendor must do to fix a title problem. These shift uncertainty onto you.

7. Cooling-off rights

Private-treaty sales of residential property in NSW usually have a five business day cooling-off period, and pulling out during it costs 0.25% of the price. A buyer can waive cooling-off with a certificate from their solicitor (a section 66W certificate), and there's no cooling-off at auction. Never waive it until your checks are done.

8. The documents attached to the contract

NSW contracts must attach certain documents, including the title search, the planning certificate under section 10.7 of the Environmental Planning and Assessment Act 1979, and sewer and drainage diagrams. The planning certificate shows zoning and some hazards affecting the land, and the title shows easements and covenants, such as a right of way across the property.

How WIBI reads a contract

WIBI reads every page of the contract, including the special conditions and attached certificates, and lists each material term in plain English with its page, so you can raise it with your solicitor. Because it reads the contract together with the strata report or building and pest report, it can point out when a clause makes a problem in another document your cost.

Questions

Can special conditions be negotiated?

Often, yes, especially before exchange in a private sale. Your solicitor or conveyancer can ask for changes such as a lower late-settlement interest rate or a longer settlement. At auction, the contract terms are usually fixed beforehand, so ask for changes before auction day.

Do I still need a solicitor if WIBI reads the contract?

Yes. WIBI explains what the contract says and what to ask. A solicitor or licensed conveyancer gives legal advice, negotiates terms and handles the transfer.

What is a section 66W certificate?

A certificate from your solicitor or conveyancer, under section 66W of the Conveyancing Act 1919 (NSW), that waives your cooling-off period. Only sign one when you're sure.

Keep reading

• NSW strata report red flags: what to look for before you buy
• The NSW Low and Mid-Rise Housing rules: what they mean for buyers
• What a building and pest report doesn't tell you

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