What Should You Look for in a Contract for Sale in New South Wales?

Buying or selling property in New South Wales (NSW) is a significant milestone. At the heart of every successful property transaction lies a robust and clearly understood contract for sale. But with legal jargon, mandatory disclosures, and potential pitfalls involved, the process can feel overwhelming.

That’s where CM Lawyers comes in. Our experienced conveyancing and property law team can help you review, negotiate, and finalise contracts of sale in NSW, as well as other vital documents like your residential tenancy agreement, rental agreement, lease agreement, or tenant contract. Whether you're a first-home buyer, investor, or downsizer, we make sure your rights are protected, your obligations are clear, and there are no hidden surprises.

Here’s a comprehensive guide to help you navigate the key elements and common red flags when reviewing a contract of sale in NSW.

Understanding the Contract for Sale

The Contract of Sale in NSW is the cornerstone of any property transaction in New South Wales. It’s a legally binding document that outlines the terms and conditions agreed upon by both the buyer and the seller. In NSW, it's illegal to advertise a residential property for sale without this contract in place.

This document does more than just state the sale price—it sets out the full scope of the agreement, making it essential for all parties to understand what they’re signing up for. Whether you're buying or selling, or dealing with related agreements like a residential tenancy agreement, rental tenancy agreement.

Key elements typically included in a Contract for Sale:

• Purchase price and deposit amount
• Settlement date (the day ownership is officially transferred)
• Inclusions and exclusions, such as fixtures, appliances, or furniture
• Zoning certificate (Section 10.7), title search, and any registered dealings
• Special conditions, which might relate to repairs, inspections, or finance

Why it matters:

• Legal protection: The contract sets the legal framework for the sale, protecting both parties' rights.
• Transparency: Buyers know exactly what they’re getting; sellers clarify what they’re offering.
• Dispute resolution: If a disagreement arises, the contract serves as the official reference point.
  
  

Given its legal weight, it’s critical that the contract be carefully reviewed by a solicitor or conveyancer before signing. This helps prevent surprises later—like unexpected costs, delays, or disputes over what's included.

Essential Elements to Check

Before signing a Contract for Sale, it's crucial to go beyond the surface and examine the finer details. Each section of the contract plays a vital role in protecting your interests and ensuring there are no misunderstandings later. Here are the key elements every buyer—and their legal representative—should carefully review:

Parties Involved

• Make sure the full legal names of all buyers and sellers (including entities like trusts or companies) are correctly listed.
• If a company or trust is involved, confirm that the person signing has the authority to do so.
  
  

Property Description

• Check that the address, lot and plan number, and title reference accurately describe the property.
• For strata properties, also review the unit entitlements and common property areas included.
  
  

Purchase Price and Deposit

• Verify the agreed purchase price, deposit amount, and when it is due.
• The deposit is typically held in trust by the selling agent or solicitor until settlement.
  
  

Inclusions and Exclusions

• Common inclusions: dishwashers, air conditioning units, blinds/curtains, light fittings.
• Clearly list any items the seller is taking—like a chandelier or garden shed—to avoid disputes.
  
  

Title and Ownership

• A title search should reveal any encumbrances, easements, restrictive covenants, or caveats on the property.
• Confirm the seller has the legal right to sell and that ownership is clear and undisputed.
  
  

Special Conditions

• These may include finance approval, building and pest inspections, or conditions relating to repairs or renovations.
• Make sure any negotiated terms are included in writing.
  
  

Disclosure Documents

• NSW law requires certain documents to be included, such as:
  
  
  • Title search
  • Section 10.7 Planning Certificate
  • Sewer service diagram
  • Strata by-laws (for strata properties)
    
    
• Missing documents can give the buyer the right to withdraw from the contract.
  
  

Settlement Details

• Review the settlement date—commonly 42 days from exchange unless agreed otherwise.
• Check for any agreements around early access, rent-back arrangements, or delayed settlement.
  
  

Cooling-Off Period

• In most cases, buyers have a five-business-day cooling-off period, during which they can cancel the contract (with a small penalty).
• This period does not apply to properties bought at auction or when the buyer waives the right in writing.
  
  

Common Red Flags and Pitfalls

Even when a Contract of Sale NSW appears routine, there can be hidden issues that may lead to disputes, delays, or unexpected expenses down the line. Identifying potential red flags early can save buyers significant stress—and money. This is just as true for associated documents like a residential tenancy agreement, rental tenancy agreement, or tenant contract, where unclear terms or missing details can also lead to complications.

• Unusual Special Conditions
  Be cautious of clauses that shift too much responsibility to the buyer, such as “as is” provisions. These may limit your ability to seek remedies for property defects or incomplete works discovered after settlement—whether under a purchase contract or a rental agreement lease agreement.
  
  
• Undisclosed Encumbrances
  Some properties come with legal obligations like easements, covenants, or rights of way that can restrict how the land is used. A proper title search can uncover these, but they’re easy to overlook if not reviewed carefully.
  
  
• Unapproved Structures
  Additions such as pergolas, sheds, swimming pools, or home extensions should all have local council approval. If they don’t, the buyer may be forced to rectify or remove them at their own cost.
  
  
• Outdated Certificates
  Check that all required compliance documents—like those for pool fencing, electrical work, or smoke alarms—are up to date. Expired or missing certificates can delay settlement or expose the buyer to future liability.
  
  
• Boundary Disputes
  Fencing that doesn’t align with title boundaries or structures that encroach onto neighbouring land can result in legal action. A survey report or inspection may be necessary if there are any doubts about the property’s boundaries.

Strata and Community Title Considerations

If you’re buying a unit, apartment, or townhouse, you're not just purchasing a private residence—you’re also buying into a shared community. This means there are additional legal and financial responsibilities that come with owning a strata property. To avoid surprises, carefully review these key areas before committing to the purchase or signing a Contract of Sale in NSW. These considerations also matter if you’re planning to lease the property under a residential tenancy agreement, rental agreement lease agreement, or tenant contract.

• By-Laws
  Strata by-laws are the rules that govern day-to-day living in the complex. They may cover restrictions on renovations, noise levels, short-term rentals, and whether pets are allowed. It's important to ensure the by-laws align with your lifestyle—or with the expectations set out in a rental tenancy agreement if you intend to rent the property.
  
  
• Strata Levies
  These are regular (usually quarterly) fees paid by all owners to cover the maintenance and repair of shared areas like gardens, hallways, lifts, and pools. Understanding how strata levies are calculated and applied is essential when budgeting for your purchase or drafting terms in a tenant contract.
  
  
• Meeting Minutes
  Request the minutes from recent Annual General Meetings (AGMs) or committee meetings. These can provide valuable insights into any existing disputes between residents, financial concerns within the scheme, or upcoming expenses—such as building upgrades, repainting, or plumbing issues—that could affect your investment or lease terms.
  
  
• Special Levies
  In addition to regular strata levies, special levies may be charged for unexpected or significant works—such as roof replacements or structural repairs. Check whether any special levies have been proposed or recently issued, as these can impact your financial planning and may need to be disclosed or accounted for in a residential tenancy agreement.

Negotiating the Contract

Many buyers assume that the Contract of Sale in NSW is non-negotiable—but that’s not the case. In fact, several key terms can often be adjusted before you sign, as long as both parties agree. Having a solicitor or conveyancer on your side can help you negotiate fair and reasonable changes that suit your needs and reduce risk. This also applies if you plan to lease the property, as terms may impact any future residential tenancy agreement, rental agreement lease agreement, or tenant contract.

Here are some common elements open to negotiation:

• Settlement Period
  The standard settlement timeframe in NSW is 42 days, but this isn't set in stone. Buyers and sellers can negotiate a shorter or longer period depending on their circumstances—whether you need more time to organise finance or want to move in sooner. If leasing is part of your strategy, consider how this aligns with the start date of a rental tenancy agreement.
  
  
• Deposit
  A 10% deposit is customary, but some sellers may agree to a lower amount—such as 5%—particularly if the buyer is reliable and the market is competitive. This can ease the financial burden upfront.
  
  
• Inclusions and Exclusions
  Don’t be afraid to request specific items be included in the sale. This could be whitegoods, outdoor settings, curtains, or even a garden shed. Likewise, ensure any items the seller intends to remove are clearly listed as exclusions to avoid misunderstandings—especially important if you’re preparing a tenant contract that promises certain fixtures.
  
  
• Special Conditions
  Buyers can request additional clauses to protect their interests. These may include making the contract subject to:
  
  
  • Finance approval, allowing you to withdraw if your loan application is declined
    
    
  • A satisfactory building and pest inspection, ensuring there are no hidden structural issues or infestations
    
    
  • Repairs or maintenance to be completed by the seller before settlement, especially if concerns were raised during inspections

Including these conditions can ensure smoother transitions into ownership—or help you meet your obligations under a residential tenancy agreement later on.

The Exchange and Settlement Process

Once you've agreed to the terms of the Contract of Sale NSW, the next steps are exchange and settlement—two critical milestones that finalise the legal and financial aspects of the transaction. Understanding how these stages work helps ensure a smooth transition into property ownership or into setting up a rental tenancy agreement if you intend to lease the property.

• Exchange of Contracts
  This is when both the buyer and seller sign identical copies of the contract, and then the documents are exchanged—usually through their solicitors or conveyancers. The exchange is the moment the deal becomes legally binding.
  
  • The buyer typically pays the deposit at this point (often 10% of the purchase price, unless negotiated otherwise).

• • If the buyer backs out after exchange without a valid reason, they risk losing their deposit.

• • Once exchange occurs, any changes to the contract generally require mutual agreement.

If you're planning to lease the property soon after purchase, it's a good idea to start preparing your rental agreement lease agreement or tenant contract during this stage to minimise vacancy time.

• Settlement
  Settlement is the final step—usually occurring on the agreed date, which is often 42 days after exchange (unless otherwise negotiated).
  
  • On settlement day, the buyer pays the balance of the purchase price, and legal ownership of the property is officially transferred.

• • The buyer receives the keys to the property, signifying that they now have possession.

• • The buyer’s solicitor or conveyancer coordinates all settlement arrangements, including liaising with the seller’s representative, the banks, and the agent. They’ll also ensure that the transfer of title is registered and that any mortgage is correctly lodged or discharged.

Frequently Asked Questions

Buying property can raise a lot of questions—especially when dealing with legal documents like a Contract for Sale. Here are some common queries that come up during the process, along with helpful answers to guide you:

Q: Can I make changes to the contract after signing?
A: Changes after signing require mutual agreement and may incur legal or administrative costs.

Q: What happens if I discover an issue after signing?
A: It depends on the contract and whether the issue was disclosed. Legal advice is crucial in these cases to determine your options.

Q: Is the cooling-off period always available?
A: No. The cooling-off period does not apply to auction sales or if the buyer waives it in writing—so be cautious in these situations.

Final Tips for Buyers and Sellers

Whether you're buying or selling, approaching the Contract for Sale NSW with care can make all the difference. These final tips serve as a reminder to stay informed, cautious, and proactive throughout the process:

• Don’t assume any clause is “standard”—always read and understand every part of the contract.
• Verbal promises mean nothing unless they’re written into the contract.
• Don’t hesitate to ask questions or request clarification from your legal adviser.
• Take your time—a rushed decision can lead to costly consequences later.
  
  

Securing Your Success: The Power of a Well-Reviewed Contract

A well-prepared and thoroughly reviewed Contract of Sale NSW is your best safeguard in any property transaction—whether you're buying to live, invest, or lease. Understanding the details of the contract—and having a professional by your side—helps you avoid costly surprises and ensures a successful outcome.

If you're planning to rent out the property, it's also important to ensure your residential tenancy agreement, rental agreement lease agreement, or tenant contract aligns with the conditions of the sale and complies with NSW tenancy laws. The right advice early on can make managing a rental tenancy agreement far more straightforward post-settlement.

At CM Lawyers, we’ve helped thousands of buyers and sellers navigate contracts with clarity and confidence. Let us do the same for you.

Get in touch with our property law team today and take the stress out of your next property transaction.