Site Inspection Clause
If you want to get onto the site prior to settlement, make sure it’s written in the contract that you’ve got access. Otherwise, once you’ve signed the contract, the buyer can say to you, “Sorry, I’m not letting your air conditioning man or your contractor come on and have a look, and quote you on the renovation, or whatever else you’re going to have done.” They can say no until settlement.
If you want access for your contractors to go on, it needs to be in the contract. If you want to sign a contract or an option where you want to get council approvals, the only one that can apply to the council to have a zoning change, or to have something built, or developed, is the owner of the property. You’re not the owner of that property if you’ve only got a contract on that property or an option on that property. You have to have written in your contract with the seller that he will sign all necessary documents that go along with the council’s zoning changes and whatever else.
Cooling Off Periods
Most states have a statutory cooling off period for residential contracts. They’re generally five days in Australia. That gives you 5 days to change your mind and walk out of the deal. However, there’s a penalty of .25% of the purchase price if you are purchasing in New South Wales.
In New South Wales, because you don’t have the ability to sign a conditional contract, what you can actually do is, contract to extend your cooling off period. It’s the only State where you can do it, but in New South Wales, when you put your foot on the property, but you may not have your financing or your structures in place, you could take a risk, and sign a contract and exchange immediately. So, you’ve got a contract exchange where absolutely only you can buy that property, but in the contract, you have written that the cooling off period is extended from five days, which it normally is, out to say 21 days. This means that during that time you can make sure you have all your finance or your structures in order.
But having said that, if you pull out under your cooling off period, you are looking at .25% loss in the deposit value of the property. So, you’ve lost that money. That’s how it is. It’s not free. Whereas, pulling out on a conditional contract in the other States is free. You’ve got to prove that you made an effort to try to do it, but it gives you the ability to be able to put your foot on the deal, hold the deal, and then get everything in order. Nobody else can have it during this time.