Top 6 Must-Check Items in a Property Contract for Buyers

Top 6 Must-Check Items in a

Property Contract for Buyers

When buying a property, there is much to consider, such as understanding mortgage options, evaluating property values and contracts, and navigating the complexities of real estate transactions. These factors all play a significant role in ensuring a successful and informed home purchase. 

The property contract outlines the terms of your real estate purchase. It clarifies the parties’ rights and responsibilities and provides legal protection in disputes or breaches. In this article, we break down the essential elements of a property contract and offer the top must-check items when reviewing one effectively.

Understanding the Property Contract

Before you sign, it’s important to understand that a property contract is legally binding. The agreement specifies the rights and obligations of the parties involved, including the buyer, seller, landlord, and tenant. Its role is to provide legal protection and ensure that all parties understand their responsibilities and the terms of the agreement. 

A property contract can also help prevent disputes and provide a clear framework for resolving possible disagreements.

Six Important Points to Check:

1. Price and Payment Terms
   Check the specifics about the payment schedule and deposit requirements, and ensure you fully understand the impact of price negotiations and adjustments on the agreement.
   
2. Property Description
   The contract must include accurate and thorough property information. You will need this information for various purposes, such as real estate conveyancing searches, property appraisals, insurance assessments, and property management.
   
3. Conditions and Contingencies
   Familiarise yourself with property contract conditions, such as getting finance approval and inspections. You will need to fully understand the effects of contingencies and how to navigate the timelines for fulfilling conditions.
   
4. Settlement Date and Possession
   Ensure you understand the settlement date and how ownership is transferred. Also, learn exactly when you will get possession of the property, as you will need to organise insurance, removalists, cleaning, etc.
   
5. Special Conditions
   Take note of special conditions that may be included in a property contract to address unique circumstances or requests. Here are some examples:

• Sale of Existing Property: If the buyer needs to sell their current property to fund the purchase, this condition makes the contract dependent on the successful sale of their existing home.
• Approval for Development or Zoning Changes: If the buyer intends to develop the property or change its zoning, the contract might be subject to obtaining the necessary approvals from local authorities.
• Repair or Renovation Conditions: The contract might include specific terms regarding repairs or renovations that the seller must complete before settlement.
• Tenancy Arrangements: If the property is currently tenanted, the contract may include conditions related to the lease’s status, such as ensuring that the tenant vacates the property by settlement or that the lease continues under new ownership.
• Council Approvals: For properties requiring council approvals for specific uses or alterations, the contract might be conditional upon obtaining these approvals.
• Insurance: The contract might include a unique condition regarding who is responsible for insuring the property during the settlement period.
• Apportionment of Rates and Taxes: Conditions may specify how rates, taxes, and other expenses will be apportioned between the buyer and seller.

6. Default and Termination Clauses
   
   Default Under a Property Agreement: In Queensland property purchase contracts, default usually means a situation in which one party fails to meet their contractual obligations. Common examples include failing to pay the deposit or purchase price on time, not fulfilling conditions such as obtaining finance or completing due diligence, or not settling the property on the agreed date. Default can be initiated by either the buyer or the seller.
   
   Consequences of Default for Both Parties: When a party defaults, the other party generally has the right to seek remedies. For the buyer, the consequences of default may consist of losing the deposit and possibly being liable for any additional damages if the seller suffers a loss due to the default. The consequences can be detailed in the contract and might vary based on the agreed-upon terms.
   
   Termination Rights and Procedures: Termination rights allow a party to end the contract if the other party defaults. To terminate the agreement, the non-defaulting party usually must provide written notice of the default to the defaulting party, allowing a specified period to rectify the breach. The contract should outline the procedures for termination and the necessary notices to be given to ensure compliance with legal requirements.

The Importance of Having a Conveyancing Solicitor Review Your Contract

When you work with a professional conveyancer, you access seasoned expertise and local knowledge to ensure a smoother process and help prevent unexpected issues after the purchase. With us, you receive an experienced, professional conveyancer who understands the intricacies of the property landscape for a seamless property journey. 

At SMS Law, we:

• check your purchase contract to ensure that all property details and terms are accurate and that your obligations and rights are clearly defined
• identify and clarify any potential ambiguities 
• evaluate the agreement for potential risks
• ensure adequate protections and safeguards are in place

At SMS Law, we offer a fixed-fee service and are happy to answer any questions. With us, you receive an experienced, professional conveyancer who understands the intricacies of the property landscape for a seamless property journey. Call us on 07 3667 8966 or email us through the online enquiry form. Make sure you get the right legal advice from the start.

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