Contract Clauses -Special Conditions

Through our involvement in so many property transactions, we have found that our clients’ needs have been well protected with the inclusion of one or more of these clauses. Are there any that are applicable to your needs?

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  1. Commission Clause Where Deposit is Less Than Commission
  2. Subject to Satisfactory Building Report
  3. Subject to Completion of Sale of Buyers Property (where the Buyer has already entered a contract)
  4. Subject to Completion of Sale of Buyers Property (where the Buyer has yet to enter into a contract)
  5. Payment of Deposit
  6. Deposit is in the Form of Bank Guarantee/Deposit Bond
  7. Investment in the Deposit
  8. Early Release of Deposit to Seller (commission retained)
  9. Subject to Termination of Existing Sale Contract
  10. Subject to Registration of Title in Sellers Name
  11. Simultaneous Completion of Another Contract by the Buyer (e.g. neighbouring land)
  12. Simultaneous Completion of Another Contract Between Seller and Buyer (eg. Swap of properties)
  13. Subject to Engineers / Pest Controllers Report
  14. Subject to F.I.R.B Approval
  15. Subject to Body Corporate Record Search
  16. Subject to Body Corporate Information Being Supplied (used when immediate access to information is not possible)
  17. Pool Fencing (the Buyers obligation)
  18. Pool Fencing (the Sellers responsibility)
  19. Faxed Contracts
  20. Disclosure of Non Approved Building works (eg Pergola)
  21. Seller Finance
  22. Real Estate Agent or Relative Purchasing the Property Consent by Principal
  23. Real Estate Agent Selling Property Notice to Buyer of Beneficial Interest
  24. Builder to Complete Dwelling
  25. Spec House on Builders Terms Or On sale of Unit Purchased Off-the-Plan
  26. Early Possession
  27. Rent Back to Seller
  28. Compliance with Requisition (e.g. Sale of Flats)
  29. Subdivision of Land Where Plan Sealed by Council
  30. Sunset Clause/48 Hour Clause Option 1
  31. Building Covenants
  32. Property at Sellers Risk until Settlement Date

Special Condition 1

1. Commission Clause Where Deposit is Less Than Commission

(a) The Seller acknowledges that the deposit held by the Stakeholder is an amount less than the commission payable by the Seller to the Agent and the Seller hereby irrevocably authorises and directs the Buyer and/or the Buyer’s Solicitor to pay to the Seller’s Agent on the Date for Completion from the balance of the purchase money, the amount of the commission less the amount held by the Stakeholder.
(b) For the purpose of the Clause, the amount of the commission payable by the Seller is $ xxxx.

Special Condition 2

2. Subject to Satisfactory Building Report

(a) The Contract is subject to and conditional upon the Buyer obtaining from a licensed builder or a registered engineer or architect, on or before the xxxx a report satisfactory to the Buyer as to the condition of the improvements on the Land.
(b) The Buyer shall immediately arrange for the report to be made by builder, engineer or architect.
(c) The Seller shall permit the builder, engineer or architect reasonable access to inspect the improvements for the purpose of compiling the report.
(d) The Buyer upon receipt of the report shall forthwith notify the Seller in writing as to whether or not the Buyer wishes to terminate this Contract because the report is not satisfactory to the Buyer. In the event that the Buyer terminates this Contract pursuant to this Clause then all moneys paid by the Buyer shall be refunded to the Buyer.
(e) In the event that the Seller does not receive written notification by the xxxx advising that this Contract is terminated, then the Buyer is deemed to be satisfied with the report and this Clause is deemed to have been fulfilled.

Special Condition 3

3. Subject to Completion of Sale of Buyer’s Property (where the Buyer has already entered a contract)

(a) This Contract is subject to and conditional upon the completion of the sale of the Buyer’s property situated at xxxx on or before the Date for Completion. The Buyer agrees to do all things reasonably necessary to ensure that completion of the said sale takes place by the stipulated time and in the event that the said sale is not completed by the stipulated time through no fault of the Buyer, the Contract shall be at and end and all monies paid by way of deposit shall be refunded without deduction.
(b) The buyer warrants that he has entered into a contract for the sale of his said property and shall furnish the Vendor with a copy of that contract when requested to do so.
(c) The Parties agree that this Clause is inserted for the benefit of the Buyer and the Buyer may waive the benefit of the provisions of the sub-clause (a) at any time on or before the date stipulated by giving to the Seller notice in writing.

Special Condition 4

4. Subject to Completion of Sale of Buyer’s Property (where the Buyer has yet to enter into a contract)

This contract is subject to and conditional upon the following: –
(a) The Buyer on or before the xxxx entering into a contract for the sale of the Buyer’s property situated at xxxx. The Buyer agrees to do all things reasonably necessary to ensure that completion of the said sale takes place by the stipulated time and in the event the said sale is not completed by the stipulated time through no fault of the Buyer, the Contract shall be at an end and all monies paid by way of deposit shall be refunded without deduction.
(b) The completion of the sale referred to in xxxx on or before the xxxx.
The parties agree that this clause is inserted for the benefit of the Buyer and the Buyer may waive the benefit of the provision of the sub-clause (a) at any time on or before the date stipulated by giving the Seller notice in writing

Special Condition 5

5. Payment of Deposit

Notwithstanding the provisions of Clause 3.1 of the Residential Standard Conditions the Deposit of xxxx ($xxxx) shall be payable to the Stakeholder as follows : –
(a) The sum of xxxx ($xxxx) upon execution hereof by the Buyer
(b) The sum of xxxx ($xxxx) on or before the xxx

Special Condition 6

6. Deposit is in the Form of Bank Guarantee/Deposit Bond

The Buyer’s obligation to pay the Deposit shall be satisfied by the Buyer handing to the Seller a Bank Guarantee/Deposit Bond in the form acceptable to the Seller immediately or by xxxx upon the formation of this Contract.

Special Condition 7

7. Investment in the Deposit

The Stakeholder is expressly authorized by the Seller and the Buyer to invest the Deposit with any Bank or Building Society. The interest accruing shall be shared equally between the Seller and the Buyer except in the event of cancellation or termination of this Contract in consequence of a default of either party in which event the whole of the interest shall be payable to the non-defaulting party.

Special Condition 8

8. Early Release of Deposit to Seller (commission retained)

(a) The Buyer authorises the Stakeholder to release to the Seller the Deposit less sufficient funds to cover the commission payable by the Seller to the Seller’s Agent (“the Agent’s commission”).
(b) The Agent’s commission shall be retained by the Stakeholder until completion or termination of this Contract at which time it shall be accounted for to the Seller’s Agent.

Special Condition 9

9. Subject to Termination of Existing Sale Contract

This contract is subject to and conditional upon the termination of the existing sale contract between the Seller and xxxx (Purchaser of existing contract).

Special Condition 10

10. Subject to Registration of Title in Seller’s Name

(a) The settlement date shall be 14 days after the Buyer receives written notice from the Seller that the Request to Record Death/Transmission Application is registered and the Seller is recorded as the sole registered owner of the Land.
(b) In the event that registration of the Request to Record Death/Transmission Application is not effected within xxxx months of the date hereof this Contract may be terminated at the option of the Buyer, whereupon all moneys previously paid by the Buyer shall be refunded to him without any deduction whatsoever.
(c) The Seller Agrees to all things reasonably necessary to effect the registration of the Request to Record Death/Transmission Application as soon as possible.
[Note: The period of time required depends on what stage the Application has reached. It takes at least three (3) months from start to finish. For a Transmission Application, the Seller should be shown on the Contract as “X as Personal representative of the Estate of Y (deceased)”.]

Special Condition 11

11. Simultaneous Completion of Another Contract by the Buyer (e.g. neighbouring land)

(a) This Contract is subject to and conditional upon the simultaneous completion of a contract for the purchase by the Buyer of property situated at xxxx.
(b) The Buyer shall take all reasonable steps to obtain the simultaneous completion of the contract referred to in sub-clause (a).
(c) The parties agree that this Special Condition is inserted for the benefit of the Buyer and the Buyer may waive the benefit of the provisions of sub-clause (a) at any time on or before the date for completion by giving the Seller notice in writing.

Special Condition 12

12. Simultaneous Completion of Another Contract Between Seller and Buyer (eg. Swap of properties)

(a) This Contract is subject to and conditional upon the simultaneous completion of a contract between the Seller as Buyer and the Buyer as Seller for the property situated at xxxx and described as xxxx.
(b) Each party shall take all steps reasonably necessary to effect completion of the contract referred to in sub-clause (a) and in the event that one party is in default in respect of that contract that party shall be deemed to be in default of this Contract.
[Note: This clause must appear in both Contracts]

Special Condition 13

13. Subject to Engineer’s / Pest Controller’s Report

(a) This contract is subject to and conditional upon the Buyer obtaining from an xxxx engineer/a pest controller* on or before xxxx a report satisfactory to the Buyer as to the stability of the soil/the infestation of pests to the improvements on the land.
(b) The Buyer shall immediately arrange for the report to be made by an engineer/pest controller*.
(c) The Seller shall permit the engineer/pest controller* reasonable access to inspect the Property for the purpose of compiling the report.
(d) The buyer upon receipt of the report shall forthwith notify the Seller in writing as to whether of not the Buyer wishes to terminate this Contract because the report is not satisfactory to the Buyer. In the event that the Buyer terminates this Contract pursuant to this clause then all monies paid by the Buyer shall be refunded to the Buyer.
(e) In the event that the Seller does not receive written notification by the xxxx advising that this Contract is terminated, then the Buyer is deemed to be satisfied with the report and this Clause is deemed to have been fulfilled.
[Note: * Delete whichever does not apply]

Special Condition 14

14. Subject to F.I.R.B Approval

(a) This Contract is subject to Foreign Investment Review Board (hereinafter called ‘F.I.R.B.’) granted approval for the transaction.
(b) The Buyer shall forthwith apply to the F.I.R.B. for approval and use his best endeavours to obtain such approval.
(c) In the event that such approval is not granted before xxxx then this Contract shall be at an end and all monies paid by the Buyer shall be refunded in full.
(d) The Buyer agrees that immediately upon this becoming aware of the result of this application to the F.I.R.B. he shall advise the Seller of such result.

Special Condition 15

15. Subject to Body Corporate Record Search

This contract is subject to and conditional upon the Buyer advising the Seller within seven (7) days of the date of the formation of this contract that the Buyer is satisfied with the results of a search conducted by him of his Solicitor of the Body Corporate records.

Special Condition 16

16. Subject to Body Corporate Information Being Supplied (used when immediate access to information is not possible)

This contract is subject to and conditional upon the following: –
(a) The Seller providing the Buyer with a completed Body Corporate Schedule with xxxx days from the date of the formation of the Contract AND
(b) The Buyer advising the Seller in writing within xxxx days of his receiving the Schedule that that Buyer is satisfied with the contents of the completed Body Corporate Schedule.

Special Condition 17

17. Pool Fencing (the Buyer’s obligation)

(a) The buyer agrees to comply with all legislation relevant to the pool enclosure on the Land.
(b) The Buyer agrees that Clause 7.6 of the Terms of Contract for Houses and Land does not apply to the pool enclosure and agrees not to make any claim, obligation or requisition in relation to such enclosure.

Special Condition 18

18. Pool Fencing (the Seller’s responsibility)

The Seller agrees that prior to the date for completion the Seller shall erect enclosures surrounding the swimming pool to the standard required by all relevant legislation.

Special Condition 19

19. Faxed Contracts

(a) The parties agree that a signed facsimile transmission of this Contract shall constitute binding contract.
(b) The Parties agree to expeditiously sign an original and duplicate copy of this Contract with the intention that the executed original with be received by the Buyer and the executed duplicate by the Seller as soon as possible.

Special Condition 20

20. Disclosure of Non Approved Building works (eg Pergola)

(a) The Buyer acknowledges that the improvements on the Land include xxxx which has been erected on the subject property without Local Government Approval
(b) The Buyer agrees not to make and requisition, objection or claim in relation to the existence of the xxxx (pergola) and agrees that Clause 7.6 of the Terms of Contract for Houses and Land does not apply to the xxxx (pergola).

Special Condition 21

21. Seller Finance

(a) The Seller agrees to provide the Buyer and advance of xxxx ($xxxx) to enable the Buyer to complete this Contract.
(b) The parties agree that this advance will be secured by the Buyer providing to the Seller a first registered mortgage over the Property.
(c) The mortgage documents shall be in the form as prepared by the Seller’s Solicitors at the expense of the Buyer and shall contain the terms and conditions set out in the Form 20 ‘ Schedule/Enlarged Panel/Additional Page/Document (S.154/Declaration, Version 1 as issued by AUSDOC Commercial & Law Stationers).
(d) The mortgage shall contain the following essential terms and conditions: –
(i) Principal: xxxx ($xxxx)
(ii) Date of Repayment: xxxx
(iii) Interest Rate: xxxx per cent per annum
(iv) Whether or not there is a penalty for early repayment
(e) The Buyer shall execute all documents prepared and delivered pursuant to this clause and do all other things necessary to give effect to this clause including the payment of all expenses involved in the preparation, stamping and registration of the mortgage.

Special Condition 22

22. Real Estate Agent or Relative Purchasing the Property � Consent by Principal

(a) The Seller acknowledges that before signing this Contract the Seller received notification *in writing that the Buyer is beneficially concerned or interested either directly or indirectly in the purchase of the Property being (**the proprietor and/or partner in the Real Estate Agent or any employee, director, shareholder, executive officer of the Real Estate Agent or a prescribed relative thereof or is a company which is associated with any of the aforementioned) and the Seller has a signed Form of Consent in relation thereto.
(b) The Seller shall not be required to pay any sale commission in respect of this sale.

Special Condition 23

23. Real Estate Agent Selling Property – Notice to Buyer of Beneficial Interest

The Buyer acknowledges that before signing this Contract the Buyer received notification *in writing that the Seller is beneficially concerned or interested either directly or indirectly in the purchase of the Property being (** proprietor and/or partner in the Real Estate Agent or any employee, director, shareholder, executive officer of the Real Estate Agent or a prescribed relative thereof or is a company which is associated with any of the aforementioned) and the Buyer has signed Form of Consent in relation thereto.

Special Condition 24

24. Builder to Complete Dwelling

(a) The Seller shall complete a dwelling house on the Land substantially in accordance with the plans and specifications annexed hereto and marked with the letter “A” in a proper and workmanlike manner and in accordance with the requirements of the Local Government and any other competent statutory authority and will leave the Property clean and free of debris prior to the Date for Completion.
(b) Prior to the Date for Completion the Seller will provide the Buyer with a copy of the Final Building Inspection issued by the xxxx (city council) free from any requisitions or requirements.

Special Condition 25

25. Spec House on Builders Terms OR On sale of Unit Purchased Off-the-Plan

(a) The buyer acknowledges the Seller, although entitled to become the registered owner of the Property, is not registered owner as at the date of this Contract.
(b) The buyer agrees to accept at completion of the following: –
(i) a stamped duly executed Transfer in favour of the Seller capable of immediate registration free from encumbrancer (other than those set out in Item L. of the Items Schedule); and
(ii) a written undertaking from the Seller or the Seller’s Solicitor that the Seller with use its best endeavours to promptly answer and pay for all requisitions which issue from the Department of Lands with respect to such prior Transfer; and
(iii) the appropriate registration fees payable on the prior Transfer to the Department of Lands.
(c) The parties agree that Clause 7.3(i) of the Terms of Contract for Houses to the Department of Lands does not apply.

Special Condition 26

26. Early Possession

The Seller agrees to allow the Buyer to take possession of the Property before the completion provided that such possession is not taken prior to xxxx and that the following provisions shall apply: –
(a) Those contained in Clause 8.5 of the Terms of Contract for Houses and Land; and
(b) Upon completion, the Buyer shall pay to the Seller an amount equal to xxxx ($xxxx) for each day that the Buyer has had possession prior to completion; and
(c) The Buyer shall accept the Property in the condition it is in on the date of taking possession and agrees not to make any claim, objection or requisition in relation to the state of the Property.

Special Condition 27

27. Rent Back to Seller

(a) The Buyer agrees to allow the Seller to stay in possession of the Property at a rental of xxxx ($xxxx) per week payable weekly in advance commencing on the Date for Completion and continuing until the xxxx.
(b) The Parties agree that the terms of the tenancy shall be those as contained in the standard R.E.I.Q Agreement for Tenancy, a copy of which is annexed hereto and Parties agree to execute the said tenancy agreement prior to completion.

Special Condition 28

28. Compliance with Requisition (e.g. Sale of Flats)

(a) The Seller warrants that the Property is currently registered as a ‘multiple dwelling’ under the By-Laws of the xxxx (city council).
(b) It is a condition of this Contract that at completion there will be not any outstanding notices or requisitions issued by any competent authority affecting or relating to the Property. Notwithstanding the contents of the Terms of Contract for Houses and Land in the event that any such notice or requisition issues prior to the Date for Completion, the Seller at his cost and to the satisfaction of the relevant authority, forthwith satisfy any such notice or requisition.

Special Condition 29

29. Subdivision of Land Where Plan Sealed by Council

(a) This Contract is subject to and conditional upon the registration of the Plan of Subdivision approved by the xxxx (city council), which Plan duly sealed by the xxxx (city council) is annexed to this Contract and marked with the letter ‘A’.
(b) The Seller shall forthwith lodge the Plan for registration at Department of Lands.
(c) The Seller shall pay all the costs and expenses arising out of the preparation, approval and registration of the Plan of Subdivision and the Seller shall sign all consents and other documents required to expedite such registration.
(d) The Seller shall forthwith do all things reasonably necessary and use his best endeavours to procure the registration of the Plan of Subdivision with xxxx (xxxx) days from the date hereof.
(e) Should the Plan of Subdivision not be registered, within xxxx (xxxx) days (same as d), then this Contract may be terminated by either party by notice in writing to the other whereupon the deposit and other moneys paid hereunder shall be refunded to the Buyer.

Special Condition 30

30. “Sunset Clause”/”48 Hour Clause” – Option 1

(a) The Buyer acknowledges that notwithstanding the existence of this Contract, the Seller intends to continue to offer the Property for sale.
(b) Should the Seller receive an offer in the form of a signed contract which is to be completed within thirty (30) days of its formation and which is not conditional upon finance or the sale of any other property, showing a purchase price in excess of xxxx ($xxxx) then the Seller shall immediately notify the Buyer in writing of such offer and furnish the Buyer with copy of the same.
(c) In the event that the Buyer does not agree in writing within three (3) working days of receipt of the notice referred to in (b) to increase the purchase price to that offered by the alternate Buyer and waive any conditions relating to finance or the sale of any other property, then this Contract shall be at an end and all moneys paid by way of deposit shall be refunded to the Buyer.

or

(a) The Buyer acknowledges that notwithstanding the existence of this Contract, the Seller intends to continue to offer the Property for sale.
(b) Should the Seller receive an offer in the form of a signed Contract which in the Seller’s sole and unfettered discretion is more acceptable to the Seller, the Seller shall immediately notify the Buyer in writing of such offer and furnish the Buyer with a copy of same.
(c) In the event that the buyer does not agree in writing within three (3) working days of receipt of the notice referred to in (b) to increase the purchase price to that offered by the alternative Buyer and waive any conditions relating to finance or the sale of any other property, then this Contract shall be at an end and all monies paid by way of deposit shall be refunded to the Buyer.

Special Condition 31

31. Building Covenants

The Seller and Buyer hereby agree that the annexed Building Covenants shall be deemed to be and form part of this Contract and in the event of the Buyer selling the Land he agrees to obtain from the Buyer an acknowledgment to be bound by the Building Covenants existing at the time of sale.

Special Condition 32

32. Property at Seller’s Risk until Settlement Date

Notwithstanding the provisions of Clause 8.1 of the Terms of Contract for Houses and Land, the Seller and Buyer hereby agree that the property shall be at the Seller’s risk up to and until completion of the Contract.

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