At Lawyers Conveyancing we check a lot of real estate contracts as part of our pre-purchase legal advice service. Recently we have seen an increase in the number of contracts where the General Conditions have been changed so as to render them non-standard.
An alarmingly common trend is to change the standard finance condition so that the purchaser has no time beyond the finance approval date to cancel the contract. We noticed that estate agent Ian Reed, had been imposing a similar condition on consumers some time ago, and this was discussed in an article titled Estate Agent’s Finance Clause.
The most recent example is the contract prepared by Williamstown’s solicitors John Anile Pty. The contract contains a full set of Special Conditions (so-called because they are not standard). However, an unsuspecting purchaser or purchaser’s legal representative may not pay enough attention to the General Conditions of the contract to notice that the clause giving the purchaser two days to end the contract has been removed from the standard finance condition.
Here is the wording of the John Anile Pty finance condition:
“3. In the case of a lender being nominated in the Particulars of Sale, this contract is subject to and conditional upon the lender approving the loan on the security of the property by the approval date set out in the particulars of sale, or any later date agreed upon by the vendor. The purchaser has the option of avoiding the contract if the loan is not approved by the approval date providing the purchaser
- has made an immediate application for the said loan;
- has done everything reasonably required of him to obtain approval of the said loan; and
- is not in default under any condition of this contract when notice is given.”
We refer readers to our discussion article on buying real estate subject to finance at the Lawyers Conveyancing website, where general condition 3 of the standard contract of sale of real estate is reproduced in full.
We remind consumers that removal of the two-day notification period can have terrible consequences not only for the purchaser but also for the vendor.