In September 2008 changes were made to the form of contract of sale of land used in Victoria. The old contract note has disappeared, having been replaced by a new universal form which has been designed to be used in all situations. This article explores some key changes for purchasers of real estate in Victoria.
Unlike the old contract, the new form of contract contains all terms and conditions within the one document, without reference to extraneous terms. The signing of the contract by the purchaser is expressed as an offer to purchase which lapses unless accepted within a specified period of time or 3 clear business days if no period is specified.
Previously the purchaser had the right to requisition and make enquiries, which was largely meaningless given the extent of pre-sale disclosure required of the vendor. That right has now been abolished and replaced by vendor’s warranties in the general conditions. In broad terms these warranties address the matters which were previously the subject of requisitions on title.
It’s now a general condition that a purchaser can’t make any objection or claim compensation for any mis-description or deficiency in the area or measurements of the land being purchased. While a significant discrepancy will still allow the purchaser to avoid the contract, a prudent purchaser will carry out a check survey of the property before signing the contract.
Where the purchaser wants to nominate someone else to complete the contract, it’s no longer necessary to insert the phrase “and/or nominee” after the name of the purchaser – the purchaser has the right to nominate even without these words appearing in the particulars of sale.
There is a new process where the purchaser alleges that the property is not in the condition required by the contract at settlement. The purchaser may nominate a sum of up to $5,000 which is deducted from the balance due to the vendor at settlement and paid to a stakeholder pending determination of the dispute after settlement.
However, the purchaser must, at the same time, deposit an equal amount from the purchaser’s own funds with the stakeholder. The purpose is to isolate the dispute so that settlement is not jeopardized and can still proceed at the required time. The parties will then need to decide on a dispute resolution process after settlement.
The new form of contract has been structured in a more user-friendly way and should provide a straightforward template for those involved in preparing contracts of sale of land.
Note: Readers should not act solely on
the basis of the material contained in this article. Peter Rogozik Property Consulting expressly disclaims all liability for any loss or damage arising from the reliance on this document.