Buying or selling property in New South Wales (NSW) involves one critical legal document – the Contract for the Sale and Purchase of Land. This contract sets out all the terms of the property transaction, including the purchase price, settlement details, and special conditions. Before signing, it’s crucial to understand what this contract includes and your rights as a buyer or seller.

What is the Contract for Sale of Land?

The Contract for the Sale and Purchase of Land (often called the "Contract of Sale") is a legally binding agreement between the vendor (seller) and purchaser (buyer). In NSW, the vendor must have this contract ready before advertising a property for sale, as required by the Conveyancing Act 1919 (NSW).

Key Elements of the Contract

• Property Details: Legal description, title reference, and any easements or covenants.
• Purchase Price & Deposit: Typically, a 10% deposit is payable unless negotiated otherwise.
• Settlement Date: Usually 42 days after contract exchange unless changed by agreement.
• Inclusions & Exclusions: Fixtures, fittings, and personal property to be included or excluded.
• Cooling-Off Period: Buyers typically have 5 business days to withdraw (0.25% penalty applies).
• Special Conditions: Such as subject-to-finance or building and pest inspections.
• Vendor Disclosure Documents: Must include a title search, zoning certificate (s10.7), and sewerage diagram.

Why is the Contract Important?

Once contracts are signed and exchanged, the sale becomes legally binding. The contract protects both parties by setting clear obligations, avoiding disputes over ownership, inclusions, or settlement.

Buyer’s Checklist Before Signing

• Have the Contract Reviewed by a solicitor or licensed conveyancer.
• Conduct Due Diligence – Arrange building, pest, and strata inspections (if applicable).
• Negotiate Changes – You can request amendments such as a lower deposit or longer settlement period.

Cooling-Off Rights in NSW

Most residential property buyers are entitled to a 5-business-day cooling-off period after contract exchange. During this time, the buyer can cancel the contract but forfeits 0.25% of the purchase price. The cooling-off period does not apply to auction purchases and can be waived by providing a 66W Certificate.

Exchange and Settlement

• Exchange of Contracts: Occurs when both parties sign and swap contracts, usually with a deposit payment.
• Settlement: The balance of the purchase price is paid, and the property title is officially transferred to the buyer.

Final Advice

Engaging a solicitor or conveyancer is crucial to ensure your rights are protected. A professional can review the contract, highlight potential risks, and manage the exchange and settlement process.

FAQs About the Contract for Sale of Land in NSW

1. Who prepares the contract for the sale of land in NSW?
   The vendor’s solicitor or conveyancer prepares the contract before the property is listed for sale.
2. Can I back out of a signed contract?
   Yes, during the 5-day cooling-off period (unless waived), but you will lose 0.25% of the purchase price.
3. What happens if settlement is delayed?
   If one party delays settlement, penalties may apply, including interest charges or legal action.
4. What documents must be attached to the contract?
   At minimum: a title search, zoning certificate (s10.7), and a sewerage diagram. Missing documents can give the buyer the right to rescind.
5. Do auctions have a cooling-off period?
   No. Auction sales are unconditional, and contracts become binding once signed.
6. How long does it take to exchange contracts in NSW?
   Exchange usually occurs once the buyer and seller agree on terms and the deposit is paid, typically within a few days after the offer is accepted.
7. Who holds the deposit after contract exchange?
   The deposit is held in the trust account of the real estate agent or the vendor’s solicitor until settlement.
8. Can the purchase price be negotiated after signing the contract?
   No, once the contract is exchanged, the purchase price is fixed unless both parties agree to a formal variation.
9. What is a Section 66W Certificate?
   A 66W Certificate is a document signed by the buyer’s solicitor or conveyancer waiving the buyer’s cooling-off rights, often required for competitive purchases.
10. Can I include special conditions in the contract?
    Yes, buyers can negotiate special conditions, such as “subject to finance,” early access, or inclusion of specific chattels. These must be agreed upon before exchange.