Contract for Sale

Contract for Sale

Appointment of Real Estate Agent

A seller usually appoints a real estate agent (agent) to market, promote and sell their property. The terms of that appointment are set out in an agency agreement with the agent.

The agent will order the reports which form part of the “required documents” in the contract. These reports generally include: building, pest, compliance and energy rating. These reports are forwarded to us to complete the “marketing” contract. You may also need Body Corporate information if you are selling either a Class A or Class B unit/Townhouse.

Instruction of Solicitor

Where a seller instructs a solicitor to act, the solicitor will obtain the relevant searches (including unit title documentation), which form part of the balance of the “required documents” to complete the marketing contract.

The Contract

The service provider forwards the reports to the solicitor for annexure to the contract.

The seller's solicitor shall prepare the contract as soon as practicable after the solicitor has obtained all the “required documents” and has sufficient information and instructions to do so by either the agent or the seller.

If the solicitor has been instructed by the seller that the sale is by auction or that the agent is authorised to participate in the exchange of contracts, the solicitor shall forward to the agent the contract in two counterparts.

If the solicitor has not been instructed in accordance with the terms of Clause 6, the solicitor shall email to the agent a complete copy of the contract for marketing purposes ("proposed contract").

The agent and the solicitor must at all times uphold the copyright of the ACT Law Society in relation to the contract.

Sales advice

If the agent introduces a buyer, negotiates a sale and is not authorised to participate in the exchange of contracts, the agent shall as soon as practicable forward a detailed sales advice to the seller's solicitor.

The sales advice will provide details to the solicitor in relation to the following:

  • name of seller/s
  • address of property sold
  • full name, address and telephone number of the buyer
  • ABN/ACN of the buyer where applicable
  • name, address and contact details for the buyer's solicitor
  • sale price
  • initial deposit paid and the identity of the stakeholder
  • proposed settlement date
  • inclusions and exclusions from the sale as goods
  • whether the sale is with vacant possession or subject to an existing tenancy
  • information of any negotiations that requires the seller's solicitor to draft additional conditions for inclusion in the contract

As soon as practicable after receipt of the sales advice the seller's solicitor shall obtain any necessary further instructions from the seller and complete the preparation of the contract and:

  • forward a counterpart contract to the buyer's solicitor; and
  • make arrangements for the seller to execute a counterpart contract.

Tenanted Properties

If the property is tenanted, the managing agent shall provide to the seller’s solicitor a copy of the Residential Tenancy Agreement for annexure to the contract.

If the property is tenanted (and the agent is also the managing agent) but is to be sold with vacant possession, the agent and solicitor shall mutually co-operate to ensure that the appropriate termination notice is given to the tenant in sufficient time to comply with the requirements of the relevant tenancy legislation and the provisions of the contract in relation to the settlement date of the contract.

Exchange

If an exchange of contract is effected, the solicitor notifies the agent of exchange

If the stakeholder of the deposit is the agent, the solicitor shall remit the cheque deposit to the agent.

If the stakeholder of the deposit is someone other than the seller's agent or if a bond has been used to pay the deposit or if the deposit has been released or paid direct to the seller on exchange, the notification to the agent shall include confirmation in writing of the solicitor's understanding of the arrangements made by the seller for the payment of the agent's commission on settlement.

Deposit held by an agent as stakeholder

If any part of the deposit is dishonoured or not met on presentation, the agent shall immediately notify the seller's solicitor.

The agent shall confirm in writing the amount of deposit held by the agent as stakeholder as soon as possible after exchange.

Prior to Settlement

The agent and the seller's solicitor shall consider the following matters and mutually co-operate to make appropriate arrangements to ensure:

  • a pre-settlement inspection by the buyer is carried out, if required;
  • that vacant possession will be available at the time of settlement (if applicable);
  • the parties are aware of the location of all necessary keys and security devices at settlement; and
  • that the deposit or part of it is available, if required, at the necessary time to be released by the agent upon reasonable notice to be used on settlement to discharge the seller's bank.     

On settlement

The seller's solicitor shall notify the agent by telephone as soon as possible after settlement occurs to authorise the release of the keys and the agent shall, on receipt of this authorisation, release the keys. The seller's solicitor shall confirm such authorisation by facsimile or email as soon as practicable after settlement.

Failed Settlement - Purchaser default

The seller's solicitor and the seller's agent acknowledge that in the event that the deposit is held by the seller's agent, the agent holds the deposit as stakeholder on behalf of both the seller and the buyer and that the agent is not permitted to account for the deposit to one of the parties without the written authority of the other party or court order.

If the buyer fails to complete the contract and the seller becomes entitled to the deposit, the solicitor and agent will mutually co-operate to obtain a written authority from the buyer or the buyer's solicitor to account for the deposit to the seller. 

If the agent and solicitor are unable to obtain the necessary authority to account for the deposit from the buyer or the buyer's solicitor, the solicitor will advise the seller of the possible need to obtain an order from a Court of competent jurisdiction.

Communications

Agents and solicitors are encouraged to utilise the most appropriate means of communication which will include telephone, mail, facsimile and email - depending on the circumstances.

Choice of means of communication will depend on factors such as speed, accuracy, certainty of delivery and confidentiality.

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