This article is a little different.  I plan to share parts of my recent experience buying a property in NSW.  I am doing this for a few reasons.  These include:

  • Illustrating that I understand how intimidating (and sometimes frustrating) the process of buying property can be;
  • Illustrating that small differences in the laws between the states can make a big difference;
  • Demonstrating that I practice what I preach in terms of getting contracts reviewed; and
  • Perhaps providing a little light relief!

My Offer

I saw a property in NSW that I liked sufficiently to make an offer on.

I submitted my offer in writing with the common conditions such as pest and building inspection and also that the offer was subject to my solicitor’s review of the contract (for 7 days).

You might ask why an experienced property lawyer such as myself felt the need to appoint a solicitor to review my contract.

The first reason is the well known adage that a lawyer who acts for him / herself has a fool for a client.  Having tried this in the past I know that it is too often true.

The second reason is that I know the laws in NSW are a little different.  I can talk in general terms about conveyancing law in NSW, but I am no expert.  Given that, like most property purchases, the offer was for a large sum of money, I sought the input of a local NSW solicitor.

The Contract

My lawyer reviewed the contract.

My first lesson was that 7 days wasn’t going to be enough time as lawyers in NSW inspect the council file as part of their due diligence – and this would take more than 7 days.

Whilst this might have been an issue, my solicitor also identified that the contract was missing a mandatory occupancy certificate.

This apparently meant that the contract couldn’t be signed and there was no work around.

It took the vendor three weeks to obtain the missing certificate – and all the while they continued to market the property.  When I expressed frustration at this I was told that this was perfectly normal and the property wouldn’t be taken off the market until the contract was signed.

This left me with a very uneasy feeling that if the agent got a better offer then the vendor would take it notwithstanding the agent’s assurances to the contrary.

Eventually, three weeks later the contract was issued in a format that could be signed.

The Deposit

Payment of the deposit became a major issue.

Firstly, the vendor’s conveyancer originally refused to allow the balance of the deposit (I had already paid a substantial holding deposit) to be paid a few days after the contract was signed.  I was told that this simply wasn’t possible.

When I pushed back on this all of a sudden it was possible to include a special condition that the balance of the deposit could be paid within 7 days.

Five days after the contract was signed I went to process the payment of the deposit.  The agent had only provided BPay details in their deposit invoice – and not bank account details.  My bank had a BPay limit of half the balance of the deposit.  I therefore processed half the deposit by BPay with the balance to follow overnight.  I sent copies of the transfer receipts to my solicitor.

I thought that making the payments on days 5 and 6 meant I had a little time up my sleeve and all was fine. 

WRONG.

I got a panicked call from my solicitor advising that if the vendor didn’t receive clear funds in the agent’s trust account by 5:00 pm on the due date the vendor could simply terminate the contract and forfeit the deposit with no grace period.  (This contrasts with the Victorian situation where a default notice would have to be issued and I would have 14 days to remedy the default.)

I was a little concerned by this.  However, I reviewed the special condition which talked about ‘paying’ the balance of the deposit and ‘payment’ of it – and I formed the view that whatever the usual position in relation to deposits I had complied with the special condition and I was therefore fine.

Other Issues

In the interests of brevity I have skipped over a number of other frustrations that I encountered along the way:

  • The agent emailed out a sales advice – with the wrong purchase price on it;
  • The agent issued an invoice for the deposit in the wrong amount (and not just once);
  • The agent, having agreed to an extended settlement, then tried to insist on a 45 day settlement once the price was agreed;
  • The building inspector issuing the results of his inspection to the (NSW) council in the Queensland format when the property (and the council) were in NSW; and
  • The vendor’s conveyancer telling my lawyer that they weren’t across the agreed amendments to the contract and that my lawyer should update the contract!

All of this led to me sending a number of very direct emails to the vendor’s estate agent. I’ve got a feeling I am no longer on the agent’s Christmas Card list!

Lessons

Before I conclude I do want to put this story in context.  I am very aware that there are many very capable and professional estate agents, vendor conveyancers, lawyers and other parties out there.  Unfortunately, I was a little unlucky that I didn’t meet them in the course of this transaction.

However, I am also aware that buying, selling and otherwise dealing in property can be a very stressful and challenging experience.  As a property investor myself, I have personally:

  • Bought and sold property;
  • Signed building contracts;
  • Signed Joint Ventures;
  • Applied for mortgages;
  • Funded private loans; and
  • Been involved in litigation.

Notwithstanding the challenges associated with these activities, I think the experiences make me a better property lawyer as I have been in the same situations that many of you, our clients face.

These experiences also validate my belief that property investors (from home buyers to developers) need more and better advice to thrive.  It is for this reason that Lewis O’Brien & Associates strives to provide a range of innovative services that provide cost effective means of providing quality advice to clients:

To contact us and /or arrange a review of your contract – please click here.

If you aren’t thinking of investing in, selling or developing property, but know someone that is please share this article with them.

June, 2023
Lewis O’Brien

Your Preferred Property Lawyer