VIC Property Law - Differing Opinions on Property Sale Contract?

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Anderson

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6 October 2017
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I have been getting different responses from 2 different conveyancers and would like some help.

Question:

I have an offer on my property but the purchasers want a 9 month settlement. They are willing to make 3 payments (initial deposit then another deposit 5 months later followed by the final settlement).

Under Section 29A - (1A)of the Sale of Land Act it states that if the purchaser is obliged to make 2 or more payments (other than the initial deposit and final settlement) then it becomes a term contract.

In my case, it is only 1 extra payment. Is this to be considered a term contract?

The bank has no issue with this as the loan on the property is very small but one conveyancer claims its a term contract while the other says its not.
 

Rob Legat - SBPL

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I don't practice in Victoria. However, on the face of what you've said it is not a term contract.

The legislation you've quoted effectively says you can make three payments before it becomes a term contract, which is the situation you have.

I'm assuming you've quoted the section correctly.
 
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Rod

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Why does it matter to you?

BTW, conveyancers don't give out legal advice, suggest you see a lawyer who can eyeball the whole contract, and that you get a caveat in place after the deposit is paid.

Reading up on the Vic law I agree with Rob. Seems Vic stuffed the implementation of the law so most payments except the final payment are deposits.
 
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Anderson

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6 October 2017
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Well if I go with one, I won't get any money till settlement which defeats the purpose of accepting the long settlement.
 

Rod

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Sorry, my question about 'what does it matter to you' relates to why does it matter if the contract is a normal contract or a terms contract.

While a terms contract is slightly more onerous it is not too much different. But in any case, looks like it doesn't apply.

Is this a rural property?

Keep in mind there are rules around release of the deposits to the Vendor. It is not an automatic right.

And with a 9 month settlement you should consider putting a caveat on your own property. If some fraud happens you don't want to have to try and unravel it in court.
 

Tim W

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This question is beyond the "professional" scope of a mere conveyancer.
It's like a GP doctor trying to give you advice about brain surgery.

I most strongly suggest that you walk away from conveyancers
and engage a solicitor.
 

Luiza

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26 July 2017
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In Victoria, the definition of a terms contract has recently changed (note section 7 of the Veterans and Other Acts Amendment Act 2015 which came into operation on 22 April 2015, amended section 29A of the Sale of Land Act 1962 which contains the definition of the "terms contract"). This may be the cause of confusion...

Any contract entered into on or after 22 April 2015 is a terms contract if:
  1. gives the purchaser the right to possession of the property or receipt of rents and profits before the final settlement (when the purchaser receives the title to the property); or
  2. obliges the purchaser to make 2 or more payments which do not form part of the deposit (note a new definition of the "deposit" in the Sale of Land Act!) or the final payment).
In your case, there will be a deposit, final payment and only one payment in between. So, your proposed contract will not be a terms contract.
 
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