What Happens If You Miss Something in a Property Contract?
You’ve signed the contract. Then you notice something you didn’t pick up before exchange.
Maybe an inclusion isn’t listed. Maybe there’s an easement you didn’t understand. Maybe you’ve just realised the settlement date doesn’t work with your circumstances.
First: don’t panic.
Whether the issue can be fixed… and what happens next, depends largely on what has been missed and when you discover it.
Have contracts been exchanged?
This is the first question we ask because it makes a significant difference.
Before exchange, there is usually an opportunity to raise questions, request amendments to the contract or decide that the property isn’t right for you.
After exchange, the position changes. You have entered into a legally binding contract, subject to any cooling-off rights or specific rights contained in the contract itself.
That doesn’t necessarily mean nothing can be done.
Sometimes an issue can be clarified or negotiated with the vendor. Sometimes the contract already provides a solution. If you’re still within a cooling-off period, you may also have options that won’t be available once that period expires.
But the important thing is to get advice quickly rather than assuming the problem will sort itself out.
Property contracts are many things. Self-correcting is unfortunately not one of them.
What sort of things get missed in a property contract?
Property contracts are long documents and not everything that matters is sitting neatly on the front page.
Some of the things we commonly look for when reviewing a NSW property contract include:
- easements, covenants and restrictions on the title;
- unusual special conditions;
- excluded fixtures or unclear inclusions;
- issues affecting the deposit;
- settlement dates and contractual deadlines;
- land tax adjustments;
- notices or other information attached to the contract;
- provisions dealing with unapproved structures or works; and
- terms that could affect how you intend to use the property.
Not every issue is a deal breaker.
In fact, most aren’t.
The point of a contract review isn’t to produce a terrifying list of everything that could theoretically go wrong. It’s to identify the things that actually matter to this property and this purchase, so you can make an informed decision before you become legally bound.
Our job is to find the things worth worrying about… not give you 37 new things to worry about unnecessarily.
What if you missed an easement or restriction?
An easement or restriction on title sounds alarming when you’ve never encountered one before, but they’re incredibly common.
An easement might provide for drainage, sewerage, access or services over part of the property. A restriction or covenant may place limitations on building or the use of the land.
The real question isn’t simply “Is there an easement?”
It’s “Does it matter to me?”
If you’re buying the property exactly as it stands and have no plans to substantially alter it, a particular easement may have very little practical impact.
If you’re buying because you want to add a pool, build a granny flat, extend the house or redevelop the property, the same easement could suddenly become very important.
That’s why we always recommend telling your conveyancer about your plans for the property when having the contract reviewed.
We aren’t mind readers… unfortunately.
If the plan is “live in it exactly as it is”, tell us.
If the plan is “pool, granny flat, extension, knock down the garage and possibly subdivide”, definitely tell us.
What if you missed a special condition?
Special conditions are where contracts can become particularly interesting.
The standard NSW contract contains established terms dealing with the transaction, but a vendor’s solicitor or conveyancer may add special conditions which amend those standard provisions or create additional rights and obligations.
Some are relatively routine.
Others aren’t.
A special condition might deal with the deposit, settlement, adjustments, the condition of the property, existing structures, access before settlement, delayed completion or what happens if something goes wrong.
And just because a special condition is buried somewhere around page 47 does not make it any less binding than something written on page one.
Unfortunately, “I didn’t read that bit” isn’t a contractual remedy.
This is one of the reasons we recommend having the contract reviewed before you sign it.
Once contracts have exchanged, you generally can’t simply say you didn’t notice or understand a condition and therefore don’t want it to apply.
What if you’ve missed a deadline?
This one requires quick action.
Property transactions have a number of important dates, and depending on the contract these may include the cooling-off expiry, payment of the balance of the deposit, finance deadlines and settlement itself.
Missing a deadline doesn’t automatically mean you’re about to lose the property.
For example, if a purchaser isn’t ready to settle on the contractual settlement date, the vendor may be entitled to charge interest and, depending on the circumstances, take further steps under the contract.
If you realise there is going to be a problem with a contractual deadline, tell your conveyancer as early as possible.
It is much easier to try to resolve an issue before the deadline than explain it afterwards.
This is one of those occasions where “I was hoping it might sort itself out” is not our preferred strategy.
What if you’re buying a strata property?
If you’re buying a strata property, there are additional documents and considerations that form part of the purchase.
As part of our contract review, we review the title and the documents attached to the contract that are relevant to the legal transaction, including the registered strata plan and by-laws where applicable.
Strata properties can also involve issues such as special levies or other matters affecting the owners corporation. Buyers should ensure they undertake their own appropriate due diligence in relation to the strata scheme before becoming unconditionally bound.
From a conveyancing perspective, our focus is on the contract, title and the legal aspects of your purchase, making sure you understand what you’re signing and identifying any issues within the scope of our review before you commit.
Can a property contract be changed after you’ve signed it?
Potentially, but both parties generally need to agree.
We regularly negotiate amendments to contracts before exchange. After exchange, amendments can still sometimes be agreed, but the other party isn’t obliged to change the deal simply because you’ve discovered something you would prefer to be different.
That is why your bargaining position is usually much better before you sign.
“We’d like to change this before our client signs” tends to be a much easier conversation than “our client has signed, but…”
If something has genuinely been missed after exchange, don’t assume there is nothing that can be done. Speak to your conveyancer and find out exactly what the contract says and what options are available.
Does it matter where in NSW you’re buying?
The law doesn’t change because you cross the Harbour Bridge or head up the M1, but the properties certainly do.
Our Sydney conveyancing matters can involve everything from Inner West terraces and Eastern Suburbs apartments to North Shore homes, Northern Beaches properties and larger developments across Western Sydney.
On the Central Coast, we see another mix entirely. Strata apartments around Gosford, established homes, acreage, coastal properties and properties affected by bushfire, flooding or other location-specific considerations.
The important thing isn’t applying a generic checklist based on the suburb.
It’s looking at the actual property you’re buying, the contract in front of you and what you intend to do with it.
The best time to find a contract issue is before you sign
This probably sounds obvious, but it is worth saying.
If you’re buying property in NSW, have the contract reviewed before exchange wherever possible. If you are weighing that up against handling the transaction yourself, we have set out what DIY conveyancing in NSW actually involves separately.
At MG Conveyancing, we’ll review the contract and title, explain the issues that matter in plain English and negotiate any amendments we think should be requested before you commit to the purchase.
And if you’ve already exchanged and have just discovered something you think may be a problem, contact your conveyancer straight away.
It may be something straightforward.
It may require a conversation with the other side.
Or it may be something you need advice on urgently.
Either way, you’ll be in a much better position once you know exactly what you’re dealing with.
Buying a property? Send us the contract before you sign. It’s much easier to deal with a problem while you still have options… and considerably nicer for everyone than discovering it afterwards!
