How To: Check Important Stuff in Your Sales Contract

Whilst it’s essential you have the sales contract for your prospective property purchase reviewed by a solicitor experienced in property conveyancing, it’s also very useful for you to know how to check the bits that can affect you the most. Spending ten minutes browsing through a sales contract before passing it on to your solicitor can help you identify any red flags and ask for further detail from your solicitor.

Inclusions and Exclusions
These can be found on page one and you may be surprised to learn that lots of features like whitegoods and large potted plants wont come with the property. If you’re keen on having these included you will have to negotiate them into your purchase.

Completion Date
This is found on the front page as well. A standard settlement time is 42 days but if the property is tenanted with a lease in place this may be much longer- not ideal if you were hoping to move in and get settled by a deadline of your own.

Encumbrances
An encumbrance is a claim that someone other than the owner has on the property.

There are a few different types.
– Easements; someone else’s right to access or use, such as the area around a sewer pipe that the water company needs access to
– Covenants; a restriction preventing you from doing something like building a certain distance away from the boundary.
– Liens; a debt where the property is security.

Even knowing there are encumbrances means you can double check with your solicitor. You don’t want to find out after you’ve purchase you cant put a pool in because theres a sewer pipe with an easement running the length of your backyard.

Sewer Diagram
Whilst talking about sewer you’ll also find the sewer service diagram toward the back of the contract which shows where fresh water, waste and stormwater enter and exit the property. This can affect how you improve the land, for example adding a pool, or a driveway or even building up in the future. Take note of where the sewer lines run and ask your solicitor how this may affect your future plans.

Council Planning Certificate
Also called a section 10.7 in NSW this will flag if there are any potential issues with aircraft noise, flooding, bushfire, mine subsidence, soil contamination, heritage controls, and more. If these issues are mentioned you should ask your solicitor to investigate why that’s the case and whether they will actually affect your property.
Not many solicitors will do this without prompting.

Whilst the above list is not exhaustive it will certainly help you to identify potential problems early, and work with your solicitor to protect you from making a bad purchase decision. Ten minutes scanning through a contract can help you to ask the right questions once the contract is formally reviewed.