I raised the following important issues for Buyers and Sellers to consider in a recent article in a newspaper.


  • Your budget and affordability – Valuation of property is critical. If the value assessed by your bank is less than what you thought, your loan may not be approved. Take a good look at your financial situation and your financial capabilities so you only buy what is affordable.
  • Subject to finance – If your loan is not approved prior to your purchase, be sure to include a ‘subject to finance’ clause into your contract of sale. This will avoid your contract becoming binding while your loan is still unapproved.
  • Inspection – Professional building inspection prior to signing the contract will reveal issues with the quality of construction, the state of foundation and any damage caused by water or pests.
  • Contract of sale – Read the contract for sale including vendor statement carefully and ensure you understand the meaning of all the conditions of the contract. Note any important penalty clauses for delayed settlement or breach of contract.
  • The Title – Is your seller the registered titleholder? A title needs to be current for settlement or it will create delays or may even result in termination of sale. Titles are often mortgaged with a bank. Ensure that the seller can pay off his loan and give you a clear and unencumbered title at settlement.
  • Caveat – Look for any caveats on the title which the vendor must remove on or before the settlement. Consider lodging a caveat on the property you are purchasing to prevent the seller from acting contrary to your interest in the property.
  • Restrictive covenant – Check for any restrictive covenants attached to the title such as the type of building and number of dwellings permitted on the land, the size of land at the back and front. Further look closely for any planning restrictions especially if you are buying for  developing or rebuilding on the land.
  • Important documents – Search independently documents such as title, water, rates, planning information, land tax clearance and Vicroads.
  • Stamp duty – Build in stamp duty costs in your budget. You may be eligible for Principal Place of Residence (PPR) or First Home Owners concession. Note that foreign nationals may need to pay more stamp duty than Australian Permanent Residents or Citizens.
  • Insurance – Ensure that the vendor has insurance on the property until settlement date and arrange your own insurance post settlement.
  • Adjustment of costs – This is a statement of costs such as rates, water and land tax; what has been paid or is payable by the vendor until the date of settlement.




  • Valuation of property – it is critical to know the market value of your property and have appropriate expectations. You also need to have a clear idea of the costs of sale.
  • Title and other search documents – Before offering a contract of sale to the prospective buyers, the seller must have a current title and other important documents to be attached to the vendor statement (s32 statement). These searches can take up to 10 business days. Sellers often come to a solicitor for contract when the property is already in the market or even after an expression of interest has been received. This puts the sellers at risk of not attaching current and sometimes correct documents to the contract which can have disastrous consequences at settlement.
  • Contract and Vendor Statement – it is important to provide a full disclosure of all improvements, fixtures and services available on the property including rates, water, telephone, electricity. Vendors must make clear statements regarding compliance with council requirements and any planning restrictions.
  • Inspections – you need to keep the property in a presentable condition and make it available for inspection at the appointed times. These inspections may include inspection for valuation by the purchaser’s bank.
  • Maintain insurance on the property – vendor’s are required to maintain property insurance to cover the financial loss through fire, burglary etc. Often vendors cancel their property insurance once the contract is signed, but you are bound by the contract to handover the property in the same condition that was presented when the contract for sale was signed.
  • Provide information promptly – the vendor must promptly respond to enquiries of the purchaser to avoid delays in settlement.
  • Remove any caveats – often creditors, other than the lending bank, lodge a caveat over the vendor’s property to cover the debts against the vendor. If the property has caveats from the creditors they must be removed before, or by the settlement date to avoid delays in settlement.
  • Forms – some of the essential forms for the vendors are the Discharge of Mortgage Authority to their Bank, Transfer of Land form, and the Goods If the property is sold for less than market value it’s very important that correct valuation is provided for stamp duty purposes.
  • Clear title on settlement – it is the vendor’s responsibility to provide a clear and unencumbered title to the purchaser in return for the purchase price.

The matters discussed above will require further legal consideration specific to your individual circumstance. It is imperative that all prospective buyers and sellers seek appropriate legal advice.

All the best with your next property venture!

Mondira Mukerjee


MM Legal Practice