A property contract can look settled because it is printed, signed by the seller and accompanied by official-looking certificates. That does not mean it is safe to sign. Knowing how to review a property contract means looking beyond the purchase price and understanding exactly what you are buying, what you must do, and which risks may become yours after exchange.
For NSW buyers, the contract for sale is the document that governs the transaction. Once contracts are exchanged, you may be legally committed. A careful review before you sign can uncover restrictions, costly works, unusual settlement conditions or missing information while there is still time to negotiate, investigate or walk away.
Start with the property and the parties
Confirm that the contract identifies the correct property, seller and buyer. This sounds straightforward, but errors and assumptions can create unnecessary problems. Check the street address, lot and deposited plan details, and whether the land description matches what you inspected.
If you are buying with a partner, family member, trust or company, make sure the purchaser’s name is correct from the outset. Changing the purchaser after exchange is not always simple and can have duty or lender implications. Where more than one person is buying, obtain advice on whether the property should be held as joint tenants or tenants in common. The right arrangement depends on your circumstances, including estate-planning intentions and each person’s financial contribution.
Also check whether the contract covers all the land you expect to acquire. A home may have a driveway, storage area, car space or separate parcel of land that is not obvious from the marketing material alone.
How to review a property contract in NSW
A NSW contract for sale should include prescribed documents, commonly called the vendor disclosure documents. These attachments are not administrative extras. They provide the legal and planning context for the property and can reveal issues that change its value, usability or future costs.
Your review should consider the title search, registered dealings, zoning certificate, drainage diagram and any strata or community title documents. The exact documents vary according to the property, but each should be read together rather than in isolation.
The title search confirms ownership and can disclose mortgages, easements, covenants, restrictions on use, caveats and leases. A mortgage is usually removed at settlement, but other registered interests may remain. An easement, for example, may allow a neighbour or authority to use part of the land for drainage, access or services. That may be manageable, but it can affect where you build, extend or place a pool.
The planning certificate gives information about zoning and planning controls. It can help answer practical questions: can the property be used as intended, is it affected by flood or bushfire planning, and is it subject to heritage or environmental controls? Do not rely on an agent’s statement that a renovation, granny flat or business use will be possible. Planning rules, approvals and physical site conditions all matter.
Read the special conditions, not just the front page
The front page tends to draw attention to the price, deposit and settlement date. The special conditions are often where the real negotiation sits. These clauses can add, remove or alter rights that would otherwise apply under the standard contract.
Look closely at any clause dealing with the following:
- the deposit amount, when it must be paid and whether a deposit bond is permitted;
- the settlement date and whether it can be brought forward or delayed;
- inclusions and exclusions, such as appliances, blinds, light fittings, furniture, solar equipment or a storage cage;
- early access, occupation before settlement or licence arrangements;
- building works, approvals, defects or vendor warranties;
- the seller’s right to rescind, particularly if they cannot obtain a required approval; and
- any obligation for you to accept the property subject to a tenancy, lease or other occupation arrangement.
Some special conditions are sensible for the particular transaction. Others can shift risk to the buyer in a way that is not immediately apparent. For example, a clause may require you to accept works without a compliance certificate, limit the seller’s responsibility for inaccuracies, or impose additional costs if settlement is delayed.
A short settlement may suit a buyer with unconditional finance and a clear moving plan. It can be stressful and expensive if finance, sale proceeds or inspections are not finalised. The best settlement date is not simply the fastest one. It is the date you can meet with confidence.
Check what comes with the property
Inclusions are a common source of disappointment. If an item matters to you, make sure it is expressly listed in the contract. Verbal assurances made during an inspection can be difficult to rely on later.
This is particularly relevant for items that may be fixed but are not always treated consistently, such as CCTV equipment, wall-mounted televisions, charging equipment, outdoor kitchens, garden sheds, security systems and solar batteries. If there is any doubt, clarify it before exchange.
For vacant land or rural-style properties, ask further questions about fencing, water tanks, pumps, access roads and service connections. For an investment property, establish whether any existing lease, bond, rent arrears or tenant obligations will transfer at settlement.
Arrange the right searches and inspections
The contract is one part of due diligence. It cannot tell you everything about the building, land or neighbourhood. Before exchange, buyers commonly arrange building and pest inspections. Depending on the property, you may also need a survey, drainage enquiry, swimming pool compliance check, strata records inspection, council enquiries or advice on a proposed development.
A building report may identify cracking, moisture, roof issues, timber pests or unsafe structures. It is not a guarantee that every defect will be found, but it gives you a clearer basis for deciding whether to proceed, renegotiate or budget for repairs.
For strata properties, reviewing the owners corporation records is especially valuable. The records can reveal planned special levies, building defects, disputes, water penetration, major repairs, insurance issues and by-law concerns. A low purchase price can look less attractive if significant rectification works are already being discussed.
If you plan to renovate, rent the property short-term, keep a pet, or operate a business from home, investigate the relevant rules before you commit. What is permitted can depend on the title, council controls, strata by-laws and approvals.
Make finance and cooling-off conditions work for you
Most private treaty residential purchases in NSW have a five-business-day cooling-off period after exchange, unless it is waived or excluded. Auctions do not have a cooling-off period, and there are other exceptions. During cooling-off, you can usually withdraw, but you may forfeit 0.25 per cent of the purchase price.
Cooling-off is useful, but it is not a substitute for early advice and proper due diligence. In a competitive market, buyers are often asked to exchange quickly or provide a section 66W certificate to waive cooling-off. Doing so removes an important safety net. It may be appropriate where finance and investigations are complete, but it should never be treated as a routine step.
Check your finance approval carefully. A pre-approval is not the same as unconditional approval for a particular property. Your lender may still require a satisfactory valuation, review of the contract or further documents. If you are relying on the sale of another property, make sure the timing and conditions of both transactions are realistic.
If you are selling, review the contract with equal care
Sellers also need a complete and accurate contract before marketing a property. In NSW, a residential property generally cannot be offered for sale without a prepared contract. Inadequate disclosure can give a buyer rights to rescind in some circumstances, creating delay, cost and uncertainty after you thought the deal was done.
Tell your conveyancer or property lawyer about alterations, unapproved structures, disputes, notices from council or strata, leased equipment, solar arrangements, pools, tenants and any agreement affecting the property. Being upfront allows issues to be addressed properly rather than discovered late in the transaction.
For sellers, the special conditions should also be considered strategically. They can deal with matters such as a longer settlement, an existing tenancy, excluded fixtures or the release of a deposit. The goal is not to make the contract unnecessarily harsh. It is to ensure the agreement accurately reflects the sale you intend to make.
Get advice before exchange, not after a problem appears
Property contracts are time-sensitive, and the cost of an overlooked clause can be far greater than the cost of having the document reviewed. A property law professional can explain the contract in plain language, identify unusual terms, arrange or assess relevant searches, and help negotiate changes that protect your position.
At Sarah Walsh Conveyancing & Leasing, contract review is approached as more than a box-ticking exercise. The purpose is to give you clear advice on the commitments you are about to make, so you can proceed with greater certainty rather than hoping the details will sort themselves out.
Before signing, give yourself permission to pause. A careful question asked before exchange can protect your finances, your plans for the property and your peace of mind long after settlement.