Guide

What a contract review actually checks

A contract for sale is not a form. It is a document drafted by one side, for one side, and almost all of it can be negotiated right up until the moment you sign. This is what somebody reads it for.

General information, not legal advice. This page sets out how the law generally applies. It does not take account of your circumstances, and you should get advice about your own situation before acting on it. The official sources this page is written from are listed on it; where they differ from anything here, they are the authority.

In short

The contract comes in two halves. The printed terms at the front are largely standard. The special conditions at the back are not, and that is where a vendor shifts risk onto a buyer.

A vendor must attach documents prescribed by the Conveyancing (Sale of Land) Regulation 2022 (NSW) before the contract is offered. If one is missing, the buyer may have a right to rescind within a period set by the legislation. Checking what is attached is part of the review, not an afterthought.

Why the review has to happen before you sign

Almost everything in a contract for sale is negotiable before exchange and almost nothing is negotiable after it. That single fact decides the timetable. A review done the day before you make an offer is worth a great deal. The same review done the day after exchange tells you what you have already agreed to.

A residential property in New South Wales cannot be marketed until a contract of sale has been prepared for it by an Australian legal practitioner or a licensed conveyancer. So there is always a contract in existence from the first day the sign goes up. You do not have to wait for the agent to offer it. Ask for it.

The agent cannot change the contract for you. Only your legal representative can ask for changes on your behalf, and the vendor’s representative decides whether to agree. That exchange of requested amendments is normal and expected, and it is where a review turns into something practical.

If the property is going to auction, the review has to be finished before the auction, not after. There is no cooling-off period on an auction purchase, so the bidding is the point of no return.

What has to be attached, and what happens if it is not

Section 52A of the Conveyancing Act 1919 (NSW), with the Conveyancing (Sale of Land) Regulation 2022 (NSW), requires a vendor to attach prescribed documents to the contract before the property is offered for sale. The Regulation sets out what they are.

In broad terms they cover the title to the land and what is recorded against it, the registered plan, a drainage diagram, and a planning certificate for the land issued under section 10.7 of the Environmental Planning and Assessment Act 1979 (NSW). Which specific items apply depends on the land, which is why the list is worked out for the property rather than copied from a checklist.

Where a prescribed document is missing, a purchaser may be entitled to rescind the contract, exercisable within a period the legislation sets and running from exchange. That is a genuine remedy and it is a short one. It is also one of the first things to check, because if something is missing you want to know on day one rather than in week three.

The title documents for the land, and the dealings recorded against the title
The registered plan for the land
A drainage diagram
The planning certificate for the land under section 10.7 of the Environmental Planning and Assessment Act 1979 (NSW)
The statement of the purchaser's cooling-off rights, in the prescribed form
Where there is a swimming pool, the certificate or other evidence required for it
For an off-the-plan contract, the disclosure statement and draft plan and the further documents the legislation requires

The planning certificate, and why it is not about the building

The section 10.7 certificate is issued by the local council and it describes the land. It sets out the zoning, what may be done on the land, the planning controls that apply and the constraints the council knows about.

Those constraints are the point. A certificate can disclose that land is flood affected, bushfire prone, subject to a road widening proposal, affected by mine subsidence, potentially contaminated, or covered by a heritage control. None of that is apparent from an inspection on a dry Saturday, and every one of those items changes what you can do with the land, what it costs to insure and what it will be worth to the next buyer.

There are two forms. The ordinary certificate carries the planning information. A certificate that also includes the additional information the council holds under subsection (5) can disclose further matters, including things such as recent development consents. Which one is attached is worth knowing, and asking for the fuller version is a reasonable request.

One caution that catches people: the certificate describes the land, not the structure on it. Whether the deck, the carport or the converted garage was ever approved is a different question, answered from council records and from the contract’s own warranties.

The special conditions, which is where the risk lives

The printed terms at the front of a contract for sale are largely standard and largely familiar. The special conditions annexed at the back are neither. They are drafted for this sale, by the vendor’s side, and they routinely change the standard position.

The pattern to look for is a clause that moves a risk from the vendor to you. A condition that limits the vendor’s liability for the state of the property. A clause restricting your right to make a claim or require work. A right for the vendor to rescind in circumstances that are within the vendor’s own control. A clause making you responsible for an approval or a certificate that does not yet exist.

Some special conditions are perfectly reasonable, and a review is not a hunt for something to object to. The job is to identify which conditions have a real cost, estimate what that cost is, and tell you clearly so you can decide whether to ask for a change, price it into your offer or walk away.

A condition that looks like boilerplate can be the most expensive line in the document. Where a clause has a real consequence, you should be told what it is in plain words, not told that the contract is “standard”.

The dates, and what depends on them

The settlement period is set by the contract and is negotiable before exchange. It has to be a period your lender can actually meet. A settlement date agreed to please a vendor, which your bank cannot reach, is a default waiting to happen, and the consequences of failing to complete fall on you.

Time being of the essence, where the contract says so, means a date is not a target. It also means a notice to complete has real force. What the contract allows either party to do if the other is late, and what it costs, is part of the review.

If a cooling-off period applies, when it starts and when it ends comes from the legislation and the contract together, and it can be shortened or extended by written agreement. Do not calculate it from a website, including this one. Ask about your contract.

The settlement period, measured against what your lender needs
Whether the contract makes time of the essence
What a notice to complete requires, and what follows if one is served
Any date by which a condition has to be satisfied, and who has to do the satisfying
For an off-the-plan contract, the sunset date and every other conditional date

What the contract says you are buying

The land is identified by the title and the plan, and it is worth checking that what is on the plan matches what you were shown. Boundaries, easements, rights of way and registered covenants all sit on the title and all restrict what you can do.

The inclusions and exclusions matter more than people expect. The dishwasher, the blinds, the shed, the pot plants and the light fittings are all either in the contract or not. A verbal promise from an agent that something stays is worth nothing at settlement.

For a unit or a townhouse, add the scheme. Whether the car space and the storage cage are part of your lot, part of the common property, or common property you have exclusive use of under a by-law is answered from the registered plan and the by-laws, and it is the most common surprise in a strata purchase. Our page on strata purchases covers what else the scheme’s records should be read for.

What a contract review is not

It is not a building inspection. A contract review reads a document. It cannot tell you that the bathroom leaks, that the retaining wall is failing or that there are termites in the subfloor. A building and pest inspection does that, and it is separate work by a separate professional.

It is not a valuation. Whether the price is sensible is a question for the market, your own research and, if you are borrowing, your lender’s valuer.

It is not a guarantee that nothing will go wrong. A review reduces the number of unpleasant surprises and tells you which risks you are accepting. It cannot remove risk from a transaction that has risk in it by nature.

And it is not a rubber stamp. If a contract is genuinely poor, the right advice is sometimes to negotiate hard, and sometimes to tell you not to buy this one.

What usually happens

Get the contract early

Ask the agent for it as soon as you are serious about a property. One exists from the day the property is marketed, and you do not need permission to ask.

Send the whole thing, including the annexures

The special conditions at the back are the part that most often needs attention. A contract sent without them is a contract half read.

The review, and the questions back

Expect questions: your lender, your timing, what the agent has told you, what you intend to do with the property. The answers change which clauses matter.

Amendments requested, and negotiated

Your representative asks the vendor’s representative for changes. Some are agreed, some are refused, and a few are met halfway. This is normal and it happens before exchange.

You decide, with the costs in front of you

Proceed, proceed at a different price, or walk away. It is your decision, and it should be made knowing what the contract does rather than hoping it is standard.

Common questions

How long does a contract review take?

It depends on the contract, on what is attached and on how quickly the vendor’s side responds to requested amendments. The part we control is usually quick. The negotiation is not, which is why sending the contract early is worth more than anything else you can do.

The agent says the contract is standard. Do I still need it read?

Yes. The front of a contract for sale is largely standard. The special conditions at the back are drafted for this sale, and that is where a vendor changes the standard position. An agent cannot advise you on the legal effect of the document and cannot change it for you.

Can I make changes to the contract myself?

You can ask, through your legal representative. The vendor’s representative decides whether to agree. Writing on a contract yourself, or relying on something an agent has said is fine, is how people end up bound to terms they did not intend.

What if something the law requires was not attached?

The purchaser may be entitled to rescind within a period set by the legislation, running from exchange. Raise it straight away. It is a real right and the window for using it is short.

Does the review cover the building itself?

No. That is a building and pest inspection, and for a unit a strata report as well. They answer different questions and you want both. A contract review tells you what the document does to you; an inspection tells you what you are buying.

What if I have already signed?

Send it anyway, today. If a cooling-off period applies there may still be time to act, and if a prescribed document is missing there may be a right to rescind. Both run on short periods measured from exchange, so the delay costs more than the phone call.

Send us the contract

If an agent has given you a contract for sale, send it through. We will tell you what it does, what is missing and what is worth asking to change, before you are bound by any of it.