What is a Contract of Sale?
Buying or selling a property is no small task and a contract of sale is at the centre of the entire process. This document regulates the transaction, which even-handedly protects the interests of both parties. It is the vendor’s responsibility to have a contract for sale prepared prior to listing their house for sale and in NSW, this must be prepared by a solicitor or conveyancer.
A contract of sale lists all the relevant information pertaining to the sale of a property, including such things as names and addresses of the buyer and seller, as well as conditions of the sale and inclusions. Once signed and dated, it is a legally binding agreement between the purchaser and the vendor.
What has changed and why?
On 1 September 2022, the new Conveyancing (Sale of Land) Regulation 2022 commenced. It replaces the Conveyancing (Sale of Land) Regulation 2017 and has sought to simplify its structure and readability by adopting more straightforward, modern language. The new Regulation continues to support the Conveyancing Act 1919, by setting out disclosure obligations for vendors in conveyancing transactions conducted through the contract for the sale of land but does not seek to introduce any new disclosure requirements.
As a result of the changes to the Regulations, the Law Society of New South Wales recently launched a 2022 edition of the Contract of Sale, replacing the 2019 edition.
The 2022 edition of the Contract of Sale
A few of the changes to the 2022 edition of the new contract include:
New inclusions to air-conditioning, ceiling fans and EV chargers
A much more detailed execution page
Restructuring of clauses in recognition that transactions are now predominantly electronic
Payment of deposit by electronic funds transfer according to the terms of the contract
The submission of a GST payment notification form has been reduced from five days to two business days
Changes to deal with first home buyer choice property tax in the event that it forms a charge on the land and clarification that this tax is to be adjusted
Clauses dealing with the electronic execution of contracts
The prescribed notices contained in the 2019 edition can be continued to be used until 28 February 2023 as there is a transitional provision, but it cannot be used for contracts entered into on or after 1 March 2023.
The 2019 edition will be phased out and withdrawn from sale at the end of October 2022.
If you would like us to prepare a Contract of Sale for your property, please contact us or simply nominate RM Property Conveyancing when signing the Agency Agreement with your real estate agent, and we will be in touch.