Welcome to the Property Conveyancing Group Common Terms Page. Here, we've listed a handy guide to terms that you will hear often throughout the buying or selling process.
If you have any other questions, do not hesitate to contact us.
Subject to Finance
Subject to Finance – means that the offer the Purchaser has given is subject to their Mortgagee approving their loan. Approval can be based on many factors including credit rating, valuation of the property, suitability of the loan and serviceability.
Often, if the Mortgagee has not had sufficient time to assess the loan application, a finance extension
will be requested. It is then at the Vendor’s discretion as to whether additional time will be allowed.
In the event the Purchaser is unable to obtain finance within the time allowed, the Contract can be validly ended, and any deposit monies will be refunded to the Purchaser.
The property will not be listed as sold until such time as finance approval has been provided.
Subject to Building and/or Pest Inspections
If the offer is subject to the Purchaser obtaining a Building and Pest Inspection, the Purchaser is able to have a registered building practitioner attend the property in order to conduct an inspection for any defects or pest infestations. The Building Inspector will provide the Purchaser a report setting out any defects, usually within two days of the inspection taking place.
It is important to remember that defects will always be present in an established home. The Contract is unable to be ended in the event minor defects are identified however, if Major Structural Defects or a evidence of a pest infestation found, the Purchaser may elect to end the Contract and any deposit monies will be returned to them.
In some circumstances, the Purchaser and Vendor may wish to negotiate a reduction of the price in the event a major structural defect or pest infestation is found. This is at the discretion of each party.
There are a few instances in which you will hear this term during your sale/purchase. If the Purchaser places an offer in which is not subject to finance, inspections or any other condition, this is an unconditional Contract. This means that the Contract is not subject to any conditions which would end the Contract and both parties are bound by that Contract, once the cooling off period lapses.
You will also hear this term once the finance or inspection clauses have been satisfied. As these conditions have been met, the Contract is now deemed as unconditional and you are unable to end the Contract for any reason.
The cooling off period allows you to end a Contract, subject to the below exceptions, within three clear business days of signing for any reason. There is a penalty in doing this which is 0.2% of the purchase price of $100, whichever is more.
Exceptions to cooling off:
You bought the property at, or within 3 clear business before or after a publicly advertised auction;
The property is used primarily for industrial or commercial purposes; or
The property is more than 20 hectares in size and is used primarily for farming; or
You and the vendor have previously signed a contract for the sale of the same land in substantially the same terms; or
You are an estate agent or corporate body.
A Seller is unable to cool off.
Chattels / Goods
in a Contract, you will see a section which states “Goods sold with the land”.
In its simplest forms, goods sold with the land are those items that cannot be removed without causing damage to the property. More often than not, you’ll see the words “all fixed floor coverings, light fittings and window furnishings” in this section.
Buyers – if you see something within the property, for example, a dishwasher that might not be built in, and you want this to be part of the sale, make sure it is noted in the Contract.
Sellers – have you got a cubby house you’ve built into the ground but are planning on taking it with you? Make sure that it lists that this is excluded as part of the sale! We will discuss this inclusions and exclusions with you when preparing your Contract
Subject to lease
if your Contract states that it is subject to Lease, this means that there is currently a tenant occupying the premises and that, as part of the sale, you must allow the tenant to remain in the property. You are unable to request the tenant to vacate the premises until such time as their lease agreement has expired. In the event the tenant is currently on a month by month lease, you can negotiate with the Vendor to provide the tenant with Notice to Vacate prior to settlement taking place.
Everyone's property journey is a personal and individual one and therefore, so are the answers to your questions.
If you have a question that hasn't been answered above or, would like an answer personalised to you, contact us for an obligation free chat!