Role of Special Conditions in Property Sale Contracts

1. What are special conditions in a contract of sale?
2. Examples of special conditions in contract of sale of land
3. How do you draft a special condition for a contract of sale?
4. What if the special conditions of sale are not met?

If you are in the process of selling or buying a house, you may have come across special conditions of sale in the contract. As they can impact the sale of the property or land, it is important you understand what they mean, and what your rights and obligations are under the contract. To guide you, we’ve outlined everything you need to know about special conditions of sale below.

What are special conditions in a contract of sale?

‘Special conditions’ are additional conditions attached to a standard contract of sale, and are normally included in contracts relating to the sale of a land. As a seller, your property lawyer can inform you on what conditions can be included in a property sales contract, and as a buyer, they can explain the special conditions that exist when you are considering the purchase of a property. A solicitor’s advice can help protect your interest as either a buyer or seller.

Examples of special conditions in contract of sale of land

Special conditions of sale can be included at the request of either the seller or the buyer and are subject to mutual agreement by both parties. Some examples include:

1. Land inspection report on the structural soundness of the property, to be completed by a licensed surveyor or a structural engineer or a person of your choice holding professional indemnity insurance.
2. Termite inspection certificate to be prepared by a registered termite inspection company.
3. Working order clause with respect to the setting up of electrical lines, piping and plumbing fittings, drainage system.
4. Payments to be made by either party with regard to necessary maintenance and repairs to the property.
5. Payment of the deposit amount in instalments, including that the first instalment will be paid on the signing of the sale contract with the balance amount to be paid upon financial sanction from the bank.
6. Penalties for delay in settlement.
7. The sale of the land is subject to a tenancy.
8. Authorising any person to accept the contract on your behalf by facsimile.
9. Any repair that the parties have agreed to do.
10. Approval of the sale contract by a nominated solicitor.
11. Time limitation for acceptance of offer by the buyer in circumstances where the seller is hard to get hold of or the existence of several offers to buy the land are in place.
12. Simultaneous settlement wherein you are selling off one of your properties and using it to fund the purchase of another property.
13. Testing the soil for the purpose of installing a pool and checking whether such installation complies with the local bylaws.
14. Accepting the property in its current condition subject to latent and patent defects. You may make necessary enquiries with the help of your solicitor in this regard as there may be a defect which would make you reconsider buying the property if you were made aware of it.
15. Accepting to buy the land within a certain time period, for example within 3 days from the time when the offer was made. The land can be sold to any other person in the event you are unable to accept the offer within the stipulated time frame. A special condition wherein the seller can also accept or reject the offer within a certain date may be inserted.

How do you draft a special condition for a contract of sale?

Any special condition should clearly state:

• What action has to be done and when
• Who is responsible for the action being done
• Who is responsible for payment of the action being done
• What the consequences are if the action has not been completed within the due date

These special conditions must be as precisely worded as possible to avoid future disputes. All amendments and extra conditions should be signed and dated by the seller and the buyer. It is advisable to seek the advice of our property lawyers and conveyancers to ensure that any special conditions in contracts of sale for properties are drawn up correctly.

What if the special conditions of sale are not met?

As long as the contract allows it, the purchaser can cancel the contract or ask for an extension of time to obtain finance or sell their property if the special conditions are not met. If the contract is cancelled due to this, the vendor must return the deposit.

Owen Hodge is here to help

Whether you need assistance drafting special conditions of sale or navigating the process of selling a house, our team is here for you. Schedule an initial consultation by calling us on 1800 770 780.

Related information: 

• Property settlement process NSW
• Buying off the plan
• Due diligence before buying a house
• Cooling off rights

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