To find out more about this area of law, please see our legal questions and answers on this topic below, or click here to see our complete list of Legal Questions & Answers.


What is a "subject to finance" clause and why should it be included in a contract to purchase a property?
After the cooling off period has passed (or if you have waived the cooling off period) and you do not have finance, or your finance falls through, a "subject to finance" clause will often enable you to get out of the contract without having to pay the normal penalty for non-completion (the normal penalty for non-completion is 10% of the purchase price i.e. approximately $50,000.00 on an average Sydney property worth $500,000).

Can I force my landlord to extend my lease for another 2 years if I do not have an "option" clause allowing me to extend the lease?
In the absence of a valid "option" clause to renew the lease, you cannot force the landlord to allow you to stay in the premises if the landlord wants you to leave. It is very important for restaurants and retail shops to ensure that they have long lease periods with long option to renew periods in order to maintain the value that they build up in the geographical location of their business and to avoid the significant cost and inconvenience of relocation.

What is a “cooling-off period” and what does it mean to “waive” the “cooling-off period”?
A “cooling-off period” is an early stage of the contract in which the parties are permitted to withdraw from the deal. “Cooling-off periods” do not apply to contracts automatically and need to be incorporated into the agreement through a clause in the contract or by an Act of Parliament. The Conveyancing Act imposes a five day cooling off period into Land contracts and that “cooling-off period” may be extended or removed altogether (“waived”) if the parties agree and sufficient confirmation is provided that the Purchaser received legal advice as to the effect of the waiver of their right to withdraw within the timeframe provided by the “cooling-off period”.

When I am selling my property should I provide the Real Estate Agent with a pre-signed Contract to save the time and hassle of having to sign the Contract later on and potentially losing an interested purchaser (buyer)?
No. If you provide the Real Estate Agent with a pre-signed Contract then they may exchange Contracts at any time with any person without your knowledge. This could lead to outcomes that you are not happy with. Under Agency Law the Real Estate Agent is in a similar position to somebody that you have granted a Power of Attorney to. As a result the Real Estate Agent can bind you to many obligations that you may not be prepared to agree to.

I want to buy a property with my partner but I am unsure as to who will own what share of the property?
When acquiring property with another person you will need to choose whether you are buying the property as Joint Tenants or Tenants in Common. The main differences between the two relates to survivorship issues. If the property is owned as joint tenants and one of you should die then that person’s share will automatically pass to the other irrespective of the bequests made in the deceased’s Will. However if the property is owned as Tenants in Common each have a defined share in the property and are able to leave their share to somebody else in their Will.

When is stamp duty due on normal purchase Contracts and ‘Off the Plan’ purchase Contracts?
On normal purchase contracts Stamp Duty is payable within 3 months from the date of the Contract. However, Stamp Duty is payable on “off the plan” purchase Contracts within 3 months of the completion of the agreement, or the assignment of the whole or any part of your interest under the agreement, or the expiration of 12 months after the date of the agreement, whichever occurs first. Failure to comply with the above may result in interest being incurred.

I have been informed that I may lose my entire 10% deposit if I do not complete my purchase on time. This seems very harsh, is it correct?
Yes. The High Court has recently confirmed the law again in this area, having ruled in favour of two property sellers (Vendors) who terminated sale contracts after the buyers (Purchasers) failed to provide the promised money by the due date (Completion). The sellers were given this right due to standard provisions within the Contract, which clearly stated the seller’s right to keep the 10% deposit if completion did not occur on time. Although this does sound harsh the Court held that the sellers actions in retaining the deposit was allowed under the contract.

What does “buyer beware” mean in relation to buying a house?
Except for the rare occasions where the seller has been fraudulent all of the property's problems become the purchaser’s responsibilities. Any termite damage, water damage, rising damp, leaks, water inundation (flooding), incorrect boundary fencing, land contamination etc become the buyers problem. Therefore, you should conduct thorough investigations and searches when buying property.

What happens if I cannot complete my purchase on or before the completion date?
You will be served with a Notice to Complete, which usually gives you 14 days to complete, otherwise you will lose the property.

What happens if I do not complete the purchase at all?
You will forfeit to the vendor 10% of the purchase price, even if you only exchanged on a 5% deposit or a deposit bond. You will also leave yourself open to being sued by the vendor for their costs and interest.