Why a contract review should occur before signing

The single most valuable thing a property lawyer does for a purchaser is often the review that happens before the contract is signed. Once you sign, changing the contract requires the other side's agreement, and their willingness to renegotiate typically drops the moment they have your signature.

Why timing is everything

Contract law in Victoria is largely built on the principle that parties are bound by what they sign. The Sale of Land Act 1962 (Vic) supplies some purchaser protections — cooling-off for non-auction residential purchases, statutory disclosure obligations on vendors — but those are backstops, not substitutes for reading the contract carefully at the front.

Before signing, both sides want the deal to complete. A vendor who hopes to secure a purchaser at a particular price is often receptive to reasonable amendments. Once the contract is signed, the vendor has secured that price at that risk allocation — there is little incentive to give ground.

What a review covers

A proper review looks at three things together — the contract of sale, the section 32 statement, and the title — as one exercise.

The contract

• Whether the parties, property description and price are correct.
• Deposit amount and where the deposit is held.
• Day of sale, settlement date and any subject-to conditions.
• Every special condition on the back of the contract.

Special conditions are where the vendor's lawyer inserts anything outside the printed form. Common examples include GST clauses, vendor works undertakings, restrictions on the purchaser transferring the contract, extension mechanisms and — for off-the-plan sales — sunset dates and rights to vary.

The section 32 statement

• Whether the vendor is disclosed as registered proprietor.
• Whether the plan matches the property being sold.
• Whether there are easements, restrictions, or covenants that limit use.
• Whether the property is affected by planning overlays — heritage, environmental, bushfire, flood.
• Whether outstanding notices, building orders or infringements are disclosed.
• For units and apartments, whether owners corporation records are complete and disclose special levies, insurance and any current building disputes.
• Any GST or land tax indications.

The title

• Whether title is in the vendor's name and free of undisclosed encumbrances.
• Whether registered easements, covenants or mortgages will restrict the purchaser's use or need to be released at settlement.

Common issues flagged in reviews

• Onerous vendor-favouring special conditions. Restrictions on nomination, extended time to complete vendor works, waivers of common purchaser rights.
• GST silence. A commercial contract that fails to state whether the price is GST inclusive or plus GST, leaving the issue open.
• Off-the-plan sunset clauses. Rights allowing the vendor to rescind if registration is delayed. Statutory protection has been strengthened for residential contracts, but the drafting of specific clauses still matters.
• Undisclosed defects. Building works done without permits, non-conforming structures or unresolved building orders.
• Owners corporation exposure. A special levy for building rectification that will fall due after settlement.
• Adverse notices. Council or planning notices that restrict future use or require expensive work.

How the review runs in practice

1. Send the contract and section 32 to your lawyer by email.
2. Review is typically completed in one to three business days.
3. Your lawyer provides a written report identifying risks and specific amendments to request.
4. Discuss the report by phone or short meeting.
5. If you decide to proceed, your lawyer negotiates amendments with the vendor's lawyer or agent.
6. You sign a properly amended contract, or walk away, or negotiate on price.

Cooling-off is not a substitute

Cooling-off is a limited fall-back — it applies only to non-auction residential purchases, only within three clear business days after signing, and it costs the purchaser a penalty. It does not apply at auction at all. Relying on cooling-off instead of a pre-signing review is a false economy.

Auction purchases

The strongest case for a pre-signing review is auction purchases. No cooling-off applies. The moment the hammer falls, you are bound on the terms in the contract as displayed. The right approach is to have the contract reviewed in the days before the auction, ask for any amendments then and re-check the position immediately before bidding.

We provide fixed-fee contract reviews and offer a credit if you go on to instruct us for the full residential conveyance.

Why review before signing matters more than review after

In Victoria, most residential purchasers who did not buy at auction have a short cooling-off period during which they can withdraw from a contract by giving written notice, subject to a small penalty. That right does not apply at auction, does not apply for the days immediately before and after a scheduled auction, and does not apply to a range of other transactions. Even where cooling-off is available, exercising it costs money and it is not a substitute for a considered decision made before signing.

What a good review actually produces

A thorough pre-signing review produces a written report that identifies the material terms of the contract, sets out the legal issues arising from the section 32 statement, lists the clauses that we recommend amending, and identifies any question that requires input from an accountant, financial planner or building consultant before signing. It is not a checklist and it is not a summary — it is the working document that guides the negotiation with the vendor's representative.

Amendments that are frequently agreed

• Extending a finance clause by a defined number of business days.
• Adding a subject to building and pest inspection condition.
• Clarifying inclusions and exclusions, particularly for chattels and installations.
• Confirming that appliances remaining with the property are in working condition at settlement.
• Deleting a special condition that duplicates a statutory disclosure obligation.
• Adjusting settlement date to align with the purchaser's finance and moving arrangements.

Off-the-plan and complex purchases

Off-the-plan purchases, purchases from a deceased estate, purchases of tenanted property, and purchases through a self-managed superannuation fund or family trust each raise questions that go beyond a standard contract review. Timing, sunset clauses, variations to plan, GST treatment, and structural questions about the purchasing entity all become material. A pre-signing review for these transactions is generally more detailed and takes longer than a review of a standard residential contract.

When to engage a lawyer

The best time to engage a lawyer for a pre-signing review is as soon as a specific property is under serious consideration. Vendors often provide the contract of sale and section 32 statement on request, and a review can be prepared before the purchaser makes a written offer or bids at auction.