Why a Contract Review is Essential Before Buying Property in Victoria

Many buyers spend considerable time researching suburbs, comparing properties, attending inspections, arranging finance, and often even obtaining building and pest inspection reports. However, due diligence should not stop there.

A Contract Review is one of the most important steps when buying property in Victoria. Before signing a Contract of Sale or bidding at auction, a conveyancer can review the Contract and Section 32 Vendor’s Statement to identify legal risks, explain your obligations, and help you make an informed decision before becoming legally bound.

What is a Contract Review?

A Contract Review is a detailed assessment of the Contract of Sale and Section 32 Vendor’s Statement by a conveyancer before you sign the contract or bid at auction.

The information provided through a Contract Review can help buyers negotiate contract terms, seek further investigations where required, and make informed decisions before proceeding with a purchase.

What Documents are Reviewed Before You Buy?

A Contract Review for a Victorian property should include both the Contract of Sale and the Section 32 Vendor’s Statement.

Contract of Sale

The Contract of Sale sets out the legal agreement between the buyer and seller, including:

• Purchase price.
• Deposit requirements.
• Settlement date.
• General conditions.
• Special conditions.
• Default provisions.
• Rights and obligations of both parties.

While many conditions are standard, special conditions can vary significantly from one property to another and may create additional obligations or risks for buyers.

Section 32 Vendor’s Statement

The Section 32 Vendor’s Statement contains important information that sellers are required to disclose about the property.

In some circumstances, incomplete or inaccurate disclosure may provide buyers with rights under the Sale of Land Act 1962. Buyers should seek legal advice regarding their individual circumstances.

The Section 32 Vendor’s Statement commonly includes information relating to:

• Property ownership – including Title and Plan of Subdivision, easements, covenants and restrictions.
• Property compliance – including Planning Permits, Building Permits, Occupancy Permits, Certificates of Final Inspection, Owner Builder works and defect reports.
• Financial information – including council rates, water rates, land tax and owners corporation fees and charges. Generally, certificates and supporting documentation included in the Section 32 Vendor’s Statement must be current and should not be more than three months old.
• Other important information – such as planning and zoning information, bushfire prone area declarations, notices affecting the property and the due diligence checklist.

Because every property is different, it is important not to assume that the documentation is complete, accurate or free from risk.

What Can a Conveyancer Identify During a Contract Review?

A Contract Review does more than simply identify issues. It also explains what those issues mean, whether further investigations are recommended, and how they may impact your future use of the property.

Common matters identified during a Contract Review include:

Easements

A conveyancer can identify easements affecting the property and explain whether they may impact future building works or use of the land. This may include situations where structures have been built over easements without appropriate authority.

Restrictive Covenants

Restrictive covenants can limit how land is used or developed. Understanding these restrictions is particularly important if you intend to renovate, subdivide or build in the future.

Owners Corporation Issues

For apartments, units and some townhouse developments, a Contract Review can identify:

• Annual Owners Corporation fees.
• Special levies.
• Building defects.
• Ongoing disputes.
• Financial concerns affecting the Owners Corporation.

Planning and Development Issues

A review may identify matters requiring further investigation, including:

• Heritage overlays.
• Planning overlays.
• Zoning restrictions.
• Existing permits.
• Council notices.
• Building works.

Unfavourable Contract Conditions

Some contracts contain special conditions that favour the seller or create additional obligations for buyers. Identifying these conditions before signing allows buyers to understand the risks and, in some cases, negotiate amendments.

What is the Risk of Buying a Property Without a Contract Review?

The primary risk of not obtaining a Contract Review is discovering important issues after you have become legally bound to the purchase. These issues can result in unexpected costs, delays, reduced property value, legal disputes or expensive rectification works.

In Victoria, once a Contract of Sale has been signed, buyers are generally bound by its terms.

While there may be circumstances where a buyer can withdraw from a contract, this is often dependent on the contract conditions and the specific circumstances of the transaction.

The good news is that many of these risks can be identified and managed before you commit to the purchase by carrying out a Contract Review.

Why is a Contract Review Particularly Important Before an Auction?

In Victoria, buyers generally do not have cooling-off rights when purchasing at auction or within three clear business days of a publicly advertised auction. In addition, unless otherwise negotiated with the seller before the auction, the Contract of Sale cannot be made subject to conditions such as finance approval or building and pest inspections.

This means that if you are the successful bidder, you will be legally bound by the Contract of Sale from the moment it is signed and will be required to pay the deposit and complete settlement in accordance with the contract terms.

How Long Does a Contract Review Take?

The time required to complete a Contract Review will depend on the complexity of the Contract of Sale and Section 32 Vendor’s Statement. For example, an off-the-plan purchase or an apartment with a detailed Owners Corporation report will typically take longer to review than an established residential property.

When obtaining a Contract Review, it is recommended that you receive a comprehensive written review rather than a brief verbal summary. A written review provides a clear record of the matters identified and allows you to carefully consider any issues.

At Fastrack Conveyancing, we generally complete Contract Reviews within 24 to 48 hours of receiving all the relevant documentation. Where there is a tight deadline, such as an upcoming auction, we can often assist with urgent Contract Reviews.

What if the Contract is Already Signed – Is it Too Late for a Contract Review?

Not necessarily. At Fastrack Conveyancing, we can still undertake a Contract Review after a Contract of Sale has been signed. It remains important that buyers fully understand the Contract they have entered into.

Where cooling-off rights apply, a post-signing Contract Review can identify significant issues while options may still be available. However, a review is always most effective before signing, when concerns can be addressed before you become legally committed.

What Happens if There are ‘Red Flags’ in the Contract Review?

It is not uncommon for a Contract Review to identify matters that require closer consideration. However, this does not necessarily mean you should not proceed with the purchase. In many cases, it is simply a matter of understanding the risks involved and considering whether there are ways to manage, minimise or investigate those risks further.

In some circumstances, the review may identify issues that are significant enough for a buyer to reconsider the purchase altogether.

Protect Your Investment Before You Buy

A Contract Review is a cost-effective way to undertake important due diligence before purchasing property in Victoria. Investing a small amount of time and money in a Contract Review can help avoid far more significant costs, risks and surprises after settlement.

It also ensures you have the support of an experienced conveyancer who can answer your questions, review documents, explain legal issues and help protect your interests throughout the purchasing process.

Need a Contract Review? Contact Fastrack Conveyancing today for prompt, professional advice and a comprehensive written review before signing a Contract of Sale or bidding at auction.

Call us now on: 03 9915 5790

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