Practice Paper P302 Sale and Purchase of Land

PRACTICE PAPER P302
Sale and Purchase of Land
By
Lisa J Gaddie
Solicitor of the Supreme Court of Victoria
Revised by
Megan Thorburn BSc, DipLaw (LPAB), GDLP, AccS(Prop)
Principal, CCP Law
Adjunct Lecturer, The College of Law Victoria
August 2023
© 2023 The College of Law Limited

This publication is copyright. Except as permitted under the Copyright Act 1968 (Cth), no part of this publication
may be reproduced by any process, electronic or otherwise, without the specific written permission of the copyright
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Disclaimer
The practice papers have been prepared as practice guides primarily for students at The College of Law and also
for legal practitioners. They are not intended to be a comprehensive statement of the law or practice and should
not be relied upon as such. If advice on the law or practice is required or required to be given, professional advice
should be sought and practitioners should undertake their own legal research.
P302 Sale and Purchase of Land
CONTENTS
1 INTRODUCTION ................................................................................................................. 10
1.1 Overview ............................................................................................................................. 10
1.2 Torrens system ................................................................................................................... 10
1.3 Paper conveyances ............................................................................................................. 10
2 OVERVIEW OF ELECTRONIC CONVEYANCING ............................................................. 11
2.1 Electronic Conveyancing National Law ............................................................................... 11
2.2 Key concepts....................................................................................................................... 11
3 OVERVIEW OF CONVEYANCING ..................................................................................... 12
4 ESTATE AGENTS .............................................................................................................. 20
4.1 Regulation of estate agents................................................................................................. 20
4.2 Authorities to sell ................................................................................................................. 21
4.3 Unfair contract terms ........................................................................................................... 22
4.4 Underquoting laws .............................................................................................................. 22
5 METHODS OF SALE .......................................................................................................... 23
5.1 Overview ............................................................................................................................. 23
5.2 Auctions .............................................................................................................................. 23
5.3 Tenders ............................................................................................................................... 25
6 OBTAINING INSTRUCTIONS............................................................................................. 25
6.1 Verification of identity .......................................................................................................... 25
6.2 Due diligence ...................................................................................................................... 26
7 BUILDING ENERGY EFFICIENCY DISCLOSURE ............................................................. 26
8 VENDOR STATEMENT ...................................................................................................... 27
8.1 Overview ............................................................................................................................. 27
8.2 Content of the vendor statement ......................................................................................... 27
8.3 Attached property certificates and title documents .............................................................. 29
8.4 Issues arising in respect of disclosures in a vendor statement............................................ 30
8.5 Consequences of insufficient or incorrect information in a vendor statement ..................... 33
8.6 Previous contract ................................................................................................................ 33
9 SALE INVOLVING OWNERS CORPORATION .................................................................. 33
10 CONTRACT ........................................................................................................................ 33
10.1 Outline ................................................................................................................................. 33
10.2 Contract of sale of land ....................................................................................................... 34
11 REVIEW OF THE CONTRACT ........................................................................................... 34
11.1 Outline ................................................................................................................................. 34
11.2 Execution ............................................................................................................................ 34
11.3 Cooling-off period ................................................................................................................ 34
© The College of Law Limited 3

THE COLLEGE OF LAW PROPERTY
11.4 Vendor ................................................................................................................................ 35

11.5 Purchaser............................................................................................................................ 35
11.6 Property address and land .................................................................................................. 35
11.7 Goods ................................................................................................................................. 35
11.8 Payment .............................................................................................................................. 36
11.9 Day of sale/settlement date................................................................................................. 36
11.10 Encumbrances and leases .................................................................................................. 36
11.11 General conditions .............................................................................................................. 36
11.12 Special conditions ............................................................................................................... 37
11.13 Guarantees ......................................................................................................................... 37
12 TERMS CONTRACTS ........................................................................................................ 37
13 OFF-THE-PLAN CONTRACTS ........................................................................................... 38
13.1 Outline................................................................................................................................. 38
13.2 Subdivision process ............................................................................................................ 38
13.3 Plan of subdivision .............................................................................................................. 39
13.4 Sale of Land Act requirements ............................................................................................ 39
14 SALES OF NEW HOMES ................................................................................................... 41
14.1 Outline................................................................................................................................. 41
14.2 Builders ............................................................................................................................... 41
14.3 Owner-builders .................................................................................................................... 42
14.4 On-selling ............................................................................................................................ 42
15 PRE-SELLING HOMES UNDER CONSTRUCTION ........................................................... 42
15.1 Outline................................................................................................................................. 42
15.2 Developers .......................................................................................................................... 43
15.3 Builders ............................................................................................................................... 43
15.4 Owner-builders .................................................................................................................... 43
15.5 Duty – off-the-plan sales ..................................................................................................... 43
16 SALES OF NEW COMMERCIAL BUILDINGS .................................................................... 44
16.1 Overview ............................................................................................................................. 44
16.2 Misleading or deceptive conduct ......................................................................................... 44
16.3 Duty..................................................................................................................................... 44
17 DEPOSIT ............................................................................................................................ 44
18 ACTING FOR THE VENDOR ............................................................................................. 45
18.1 Outline................................................................................................................................. 45
18.2 Preliminary enquiries........................................................................................................... 45
18.3 Material facts ....................................................................................................................... 46
18.4 Due diligence ...................................................................................................................... 46
18.5 Tenders ............................................................................................................................... 47
4 © The College of Law Limited

18.6 Vendor statement ................................................................................................................ 47

18.7 Title search.......................................................................................................................... 48
18.8 Contract of sale ................................................................................................................... 49
18.9 Goods and services tax ....................................................................................................... 50
18.10 GST Withholding ................................................................................................................. 50
18.11 Foreign resident capital gains withholding regime............................................................... 51
18.12 Windfall gains tax ................................................................................................................ 51
18.13 Deposit ................................................................................................................................ 51
18.14 Foreign Investment Review Board ...................................................................................... 52
18.15 Service agreements ............................................................................................................ 52
18.16 Off-the-plan sales ................................................................................................................ 52
18.17 Vacant possession or tenancy ............................................................................................ 53
18.18 Outgoing mortgagee ........................................................................................................... 54
19 ACTING FOR THE PURCHASER ...................................................................................... 54
19.1 Outline ................................................................................................................................. 54
19.2 Defects ................................................................................................................................ 54
19.3 Due diligence ...................................................................................................................... 55
19.4 Property enquiries ............................................................................................................... 56
19.5 Tenders ............................................................................................................................... 59
19.6 Vendor statement ................................................................................................................ 59
19.7 Contract of sale ................................................................................................................... 59
19.8 Owners corporation ............................................................................................................. 60
19.9 Finance ............................................................................................................................... 60
19.10 Nomination .......................................................................................................................... 61
19.11 Leases ................................................................................................................................ 62
19.12 Service agreements ............................................................................................................ 62
19.13 Insurance ............................................................................................................................ 62
19.14 Caveat ................................................................................................................................. 62
19.15 Off-the-plan purchases ........................................................................................................ 63
19.16 Deposit ................................................................................................................................ 64
20 PREPARING FOR SETTLEMENT ...................................................................................... 65
20.1 Registration with an electronic lodgment network ............................................................... 65
20.2 Obtaining client authorisation and verification of identity ..................................................... 65
20.3 Creating and populating the workspace .............................................................................. 65
20.4 Adjustments ........................................................................................................................ 66
20.5 Settlement money and the Financial Settlement Schedule ................................................. 67
20.6 Transfer ............................................................................................................................... 68
20.7 Notice of acquisition ............................................................................................................ 68

20.8 Other notices ....................................................................................................................... 69

20.9 Digital Duties Form.............................................................................................................. 69
20.10 Priority notice ...................................................................................................................... 69
20.11 Satisfying mortgagees’ requirements .................................................................................. 70
20.12 Original documents ............................................................................................................. 70
20.13 Title activity checks ............................................................................................................. 70
20.14 Pre-settlement inspection.................................................................................................... 70
20.15 Pre-settlement letter ............................................................................................................ 71
20.16 Final search ........................................................................................................................ 71
21 SETTLEMENT .................................................................................................................... 71
21.1 Date of settlement ............................................................................................................... 71
21.2 Electronic settlement ........................................................................................................... 72
22 AFTER SETTLEMENT........................................................................................................ 72
22.1 Reporting to the client ......................................................................................................... 72
22.2 Land transfer duty ............................................................................................................... 72
22.3 Other matters ...................................................................................................................... 73
23 CONCLUSION .................................................................................................................... 73
APPENDICES ................................................................................................................................... 74
APPENDIX 1 – CLIENT AUTHORISATION FORM ........................................................................... 74
APPENDIX 2 – PROPERTY QUESTIONNAIRE FOR VENDOR – RESIDENTIAL AND
COMMERCIAL .................................................................................................................................. 75
APPENDIX 3 – SECTION 27 STATEMENT ...................................................................................... 78
APPENDIX 4 – GST WITHHOLDING NOTICE ................................................................................. 79
APPENDIX 5 – LEASE REVIEW FORM ........................................................................................... 80
APPENDIX 6 – SERVICE AGREEMENT REVIEW FORM ............................................................... 82
APPENDIX 7 – NOMINATION FORM ............................................................................................... 83
APPENDIX 8 – STATEMENT OF ADJUSTMENTS AND SETTLEMENT STATEMENT................... 84

ABBREVIATIONS
ACL Australian Consumer Law (Competition and Consumer Act 2010 (Cth)
Sch 2)
ARNECC Australian Registrars’ National Electronic Conveyancing Council
ATO Australian Taxation Office
auction rules Rules for the Conduct of Public Auctions of Land (Sale of Land (Public
Auctions) Regulations 2014 (Vic) Schs 1–4)
BEEC building energy efficiency certificate
Building Act Building Act 1993 (Vic)
Climate Change Act Climate Change Act 2010 (Vic)
DBCA Domestic Building Contracts Act 1995 (Vic)
DOL Duties Online (State Revenue Office, Victoria)
Duties Act Duties Act 2000 (Vic)
EAA Estate Agents Act 1980 (Vic)
ECNL Electronic Conveyancing National Law
e-Conveyancing electronic conveyancing
eCT electronic Certificate of Title
ELN electronic lodgment network
ELNO electronic lodgment network operator
EPA Environment Protection Authority
FRCGW foreign resident capital gains withholding
GAIC growth areas infrastructure contribution
GC general condition
GST goods and services tax
LIV Law Institute of Victoria
LPUL Legal Profession Uniform Law (Legal Profession Uniform Law Application
Act 2014 (Vic) Sch 1)
LUV Land Use Victoria
NABERS National Australian Built Environment Rating System

OCA Owners Corporations Act 2006 (Vic)
OCR Owners Corporations Regulations 2018 (Vic)
PEA Planning and Environment Act 1987 (Vic)
PEXA Property Exchange Australia Ltd
PPSR Personal Property Securities Register
REIV Real Estate Institute of Victoria Ltd
SLA Sale of Land Act 1962 (Vic)
SLPAR Sale of Land (Public Auctions) Regulations 2014 (Vic)
SRO State Revenue Office
standard contract Contract of sale of land published by the Law Institute of Victoria and the
Real Estate Institute of Victoria Ltd
Subdivision Act Subdivision Act 1988 (Vic)
TAC title activity check
TLA Transfer of Land Act 1958 (Vic)
VIC Participation Rules Participation Rules determined by the Registrar of Titles
VOI verification of identity
WGT windfall gains tax
REFERENCES
CCH Australia Limited, Victorian Conveyancing Law and Practice (looseleaf and online)
Consumer Affairs Victoria, Real Estate — A Guide for Buyers and Sellers
Libbis S, Conveyancing Victoria 2022 (Hybrid Publishers, 8th ed, 2022)
Lloyd D and W F Rimmer, Sale of Land Act Victoria (Thomson Reuters, 2015)

ACKNOWLEDGMENTS
This practice paper was written by Lisa J Gaddie and is regularly reviewed and updated (as necessary)
by College of Law academic staff and other legal practitioners. Previous reviewers include Elspeth McNeil
BA (Hons), LLB (Melb), GradCertHigherEd (Mon) in December 2005, 2007–2009 and January 2011,
College of Law academic staff in 2006, Kristoffer Greaves BA, LLB (Hons) (UNE), GDLP (Leo Cussen)
in October 2011, Kamilla Shaw LLB (Latrobe) in 2012, Kristine Pham LLB (UTAS) in 2013–2015,
Silvana Marasco LLB (Melb), BComm (Melb) in 2016, Lee Lesley Horton BA, DipLaw (LPAB), GDLP in
2017, Megan Thorburn BSc, DipLaw (LPAB), GDLP, AccS(Prop) in 2018–2019 and 2021–2022, and
Simon Libbis BJuris, LLB, AccS(Prop) in 2020.
Current revision by Megan Thorburn, August 2023.

1 INTRODUCTION
1.1 Overview
This practice paper addresses the sale and purchase of Torrens title land in Victoria. It covers both
residential and commercial land and refers, where relevant, to any differences in the conveyancing
process for residential and commercial property transactions. “Torrens title” is commonly used to refer
to the Torrens system of title by registration.
The sale and purchase of residential property discussed in this paper assumes that the contract used
is the Contract of sale of land published by the Law Institute of Victoria (LIV) and the Real Estate
Institute of Victoria Ltd (REIV) (August 2019 edition) (standard contract). The standard contract is
available to purchase in hard copy through the LIV bookstore and electronic copies can be purchased
online.
1.2 Torrens system

Under the Torrens system of land registration, the Registrar of Titles keeps a register recording the
current owner of each parcel of land. Most land in Victoria is held under the Torrens system.
There is some land in Victoria that is “general law” land (also known as “old system title” land). This is
land granted by the Crown between 1838 and 1862 that has not since been brought under the
operation of the Transfer of Land Act 1958 (Vic) (TLA). The issues that arise when a person sells or
buys general law land are beyond the scope of this paper.
Land Use Victoria (LUV) has implemented a state-wide program to convert the remaining general law
land to the Torrens title registration system.
1.3 Paper conveyances

Prior to electronic conveyancing (e-Conveyancing) the only method of settling a conveyance of land or
any other dealing with land was by using paper processes. Settlement was undertaken by a physical
meeting of the transacting parties where documents and cheques were exchanged to “settle” the
transaction. Registration of the land dealing was also by physical lodgment of the documents at the
land registry.
From 1 August 2019, e-Conveyancing is mandatory for mainstream land transactions in Victoria.
Consequently, paper conveyances continue to occur only in very limited circumstances.
Paper certificates of title in Victoria have been converted to electronic certificates of title (eCT). Where
a client holds an original certificate of title, the client’s representative can confirm whether the title has
been converted to an eCT by doing a title search. Once it is confirmed that the conversion to eCT has
taken place, the paper certificate of title holds no further value and can be destroyed or marked not
for use.
Where previously clients would sign the transfer documents themselves, e-Conveyancing clients must
now sign a Client Authorisation Form (see Appendix 1), which provides their representative with
authority to sign the documents electronically in the electronic workspace on the client’s behalf. In
addition, the client will be required to undertake a verification of identity (VOI). The VOI is completed
at the time of signing the Client Authorisation Form. The necessary VOI can be undertaken in-house,
remotely, or via Australia Post or another approved VOI agent service.
Land Use Victoria will accept paper lodgment of certain instruments that cannot be lodged
electronically or such documents can be lodged as residual documents on PEXA (Property Exchange
Australia Ltd). Those instruments include, but are not limited to:

• a transfer of lease interest, survivorship or transmission application;

• a transfer where one or more proprietors on title is not a participant in the transfer; and
• dealings with part land, including a lot in a multiple lot portfolio.
Where a land transaction meets the requirement for an exception to electronic lodgment, a paper
application along with a ‘Request to accept paper lodgment’ must be lodged. For more information on
these exceptions, see the Land Use Victoria website.
2 OVERVIEW OF ELECTRONIC CONVEYANCING

2.1 Electronic Conveyancing National Law
The practice of e-Conveyancing stems from an expansive statutory framework. It is important that
lawyers in a conveyancing transaction understand the key participants in the statutory framework and
how they operate together.
The Electronic Conveyancing National Law (ECNL) governs the operation of e-Conveyancing in
Australia. It also develops and publishes model operating requirements and model participation rules
to be implemented by the Land Title Registrars in their respective jurisdictions. The ECNL provides
that:
• documents may be lodged electronically (in a form and by means approved by the Registrar
General);
• the Registrar General must receive and deal with documents lodged electronically;
• electronic documents have the same status as the equivalent paper documents; and
• documents signed digitally have the same effect as if they had been executed by the relevant
party.
The Australian Registrars’ National Electronic Conveyancing Council (ARNECC) is responsible for
facilitating the operation of the legal framework for e-Conveyancing, including setting the Model
Operating Requirements and Model Participation Rules. It is constituted under the Electronic
Conveyancing National Law Intergovernmental Agreement among the state and territory governments.
ARNECC is comprised of the Land Title Registrar (or their nominee) from each Australian state and
territory that has entered into the Intergovernmental Agreement.
The Model Participation Rules are a set of specific rules that all parties using an approved electronic
lodgment network operator (ELNO) are required to adhere to. Before a party in Victoria can begin using
an approved ELNO, they must agree to comply with the Participation Rules determined by the Registrar
of Titles (VIC Participation Rules).
The Model Operating Requirements govern the relationship between the ELNO and the Land Titles
Registry in the jurisdiction. The Operating Requirements as determined by the Registrar of Titles are
made by the Registrar General under ECNL s 22.
2.2 Key concepts

There are several key terms and concepts that lawyers must be familiar with to conduct an electronic
conveyance.
Electronic certificate of title

An eCT is a title that is issued and held in electronic format. The practical difference between a paper
certificate of title and an eCT relates to the way consent to the lodgment of a dealing or instrument is
given. Where there is an eCT and a discharging mortgagee, an electronic consent must be lodged
electronically by the mortgagee in the electronic lodgment platform.

Subscriber
A Subscriber is a person authorised under a participation agreement to use an electronic lodgment
network (ELN) to complete conveyancing transactions on behalf of themself or another person. For the
purposes of this paper, Subscribers are the vendor’s lawyer and the purchaser’s lawyer. The
Responsible Subscriber completes lodgment instructions in PEXA and has eCT control after
settlement. This is usually the incoming mortgagee (if any).
ELN and ELNO

An ELNO is the party operating the ELN that is used for conducting online conveyancing transactions.
Applications to become an ELNO are made to ARNECC. The first, and major, ELNO in Australia is
PEXA. For the purposes of this practice paper, PEXA is the ELNO used in a conveyance. Sympli is
another ELNO that will become available for transfer transactions in Victoria once interoperability
issues are resolved.
Source funds and destination accounts

Source funds are the funds provided for settlement. In PEXA, source funds can only be made available
for debit by the financial institution’s bank account (as mortgagee), the Subscriber’s trust account or
the PEXA source account.
The Victorian Legal Services Board and Commissioner has determined that, for Victoria, e-
Conveyancing funds are best categorised as general trust money under the Legal Profession Uniform
Law (Legal Profession Uniform Law Application Act 2014 (Vic) Sch 1) (LPUL) and therefore they must
be placed in a general trust account. ELNO source accounts, such as the PEXA source account, are
not trust accounts and are not regulated under the LPUL: ss 136 and 137. The Victorian Legal Services
Board and Commissioner has therefore concluded that Victorian lawyers should not use ELNO source
accounts.
Workspace status
Workspace status or “workspace status indicators” refer to the bars displayed at the top of each PEXA
workspace representing the status of both lodgment and financial settlement. These assist in quickly
identifying the stage of the transaction and the steps that remain to be taken.
3 OVERVIEW OF CONVEYANCING
The following table is an overview of the steps usually taken in a conveyancing transaction by the legal
representative for the vendor or purchaser in the sale or purchase of residential land. The steps are not
to be regarded as comprehensive or as steps that are necessarily taken in the order in which they are
set out. Every sale and purchase of land can have its own problems that may require taking additional
steps or a variation of the order in which steps are taken.
The following table assumes that:
• the conveyancing transaction is conducted electronically using PEXA;
• the land is not being sold “off-the-plan” or under a “terms contract”; and
• the land does not contain a new home or a home under construction.

VENDOR PURCHASER
Obtaining instructions [The first step occurs later in this overview.]

1. Receive instructions to act for a vendor client on
the sale of a property. Confirm instructions to
complete the vendor statement with the client.
2. Provide costs disclosure and send costs

agreement for signing by the client.
3. Advise the client of steps involved in the proposed

sale.
Obtaining client authorisation and VOI

4. Obtain client authorisation by completing the
relevant Client Authorisation Form: VIC Participation
Rules Sch 4.
5. Conduct VOI for each client by the taking of

reasonable steps. For best practice, apply the
Verification of Identity Standard (set out in VIC
Participation Rules Sch 8).
Pre-contract searches and enquiries

6. Undertake title search and order property
certificates. Seek further detailed instructions from the
client about the property (including requesting copy of
any leases) to enable the preparation of the vendor
statement. For vacant residential land or land on
which there is a residence, the estate agent (or
vendor where there is no estate agent) must provide
to a purchaser a due diligence checklist from the time
the land is offered for sale.
Additional documents may be required:

• if applicable, for commercial property,
prepare due diligence documentation (for
example, confidentiality agreement, data
room conditions) and assist with the due
diligence process; and
• if applicable, prepare a request for an
expression of interest or tender. The request
may include a copy of the client’s preferred
form of contract of sale, in which case it must
also contain a vendor statement signed by
the client as vendor.
7. If the sale price of the property is over $750,000,

obtain a foreign resident capital gains withholding
(FRCGW) clearance certificate from the Australian
Taxation Office (ATO). If the vendor is a foreign
resident, inform them that at settlement the
purchaser’s lawyer will withhold 12.5% of the sale
price and forward it to the ATO in accordance with
capital gains withholding provisions.

VENDOR PURCHASER
Vendor disclosure
8. Prepare a vendor statement and submit it to the
client for review and approval. If further information is
required to finalise the statement, seek this from the
client. Once the vendor statement has been
approved, arrange for the client to sign it.
9. Complete discharge authority for signing by the

client (if not already completed by the client online).
Forward discharge authority to any outgoing
mortgagee with a request for information required to
complete the statement under Sale of Land Act
1962 (Vic) (SLA) s 27. Once the information in
support of deposit release is obtained from the
mortgagee, prepare the s 27 statement and send it to
the client for signing.
Preparing the contract

10. Prepare a contract of sale (including drafting of
any relevant special conditions) and submit it to the
client for approval. Where any further information is
required to finalise the contract, request this from the
client. Draw the client’s attention to any obligations
under the contract, including vendor warranties and
any other issues of which the client should be aware.
Obtaining instructions
1. Receive instructions to act for the purchaser
client on the purchase of a property. If the
purchaser has already signed the contract, the
estate agent will forward a copy of the signed
contract.
2. Provide costs disclosure and send costs

agreement for signing by the client.
Obtaining client authorisation and VOI

3. Obtain client authorisation by completing the
relevant Client Authorisation Form: VIC
Participation Rules Sch 4.
4. Conduct VOI for each client by the taking of

reasonable steps. For best practice, apply the
Verification of Identity Standard (set out in
VIC Participation Rules Sch 8).

VENDOR PURCHASER
Reviewing the contract
5. Review the contract and vendor statement for the
purchaser. Advise the client on:
• any special conditions in the contract;
• their rights (for example, cooling-off) and
the events and consequences of default;
and
• steps in the transaction and any
recommended actions (for example, to
effect insurance or undertake a physical
inspection).
Pre-contract searches and enquiries

6. Review the title search and other property
certificates included with the vendor statement
(if received). Advise the client of any issues of
concern.
If the purchaser is obtaining finance, request the

incoming mortgagee’s details and written
confirmation of the loan approval from the
purchaser.
If finance is not approved and the contract is

“subject to finance”, write to the vendor’s
representative requesting an extension of time for
finance approval. If the vendor refuses to grant the
extension, then seek the client’s instructions to
write to the vendor saying that the contract is at an
end (otherwise the contract becomes
unconditional).
If applicable, for commercial property, assist the

client with undertaking a due diligence of the
property and report to the client on any issues of
concern.
If applicable, review any request for an expression

of interest or tender documentation and assist the
client with assembling a tender.
Check if the vendor is a foreign resident and

whether the FRCGW regime applies.
Request a FRCGW clearance certificate from the

vendor’s representative (if the sale price of the
property is over $750,000) if not included with the
vendor statement.
Consider whether the goods and services tax

(GST) withholding provisions apply to the
transaction. If not already provided, request a GST
withholding notice from the vendor’s representative.

VENDOR PURCHASER
Seek instructions from your client about lodging a

caveat, priority notice or subscribing to the Property
Transaction Alert Service provided by LANDATA
and, if so instructed, attend to this.
7. Write to the incoming mortgagee requesting their

requirements for preparation for settlement and
attend to these.
Negotiating Negotiating
11. On receipt of any request for amendments to the 8. Advise the vendor’s representative of any
contract of sale, seek instructions from the vendor amendments required and set out proposed
and negotiate any requested amendments with the amendments.
purchaser’s representative.
9. If proposed amendments are rejected, discuss
further with the purchaser and, if so instructed, with
the vendor’s representative. Receive instructions
from the client to accept or reject final draft contract
and advise vendor’s representative of this.
Execution Execution
12. Once the contract has been signed by both 10. Once the contract terms have been negotiated
parties, request a copy of the signed contract, and (if applicable), the contract is signed by both
check any blank items were completed properly by parties. This is usually co-ordinated by the agent,
the agent and that the contract has been signed by who then sends a copy of the signed contract to the
the purchaser and vendor. Also check whether any vendor and purchaser’s representatives. Confirm
hand-marked amendments have been made and, if that any blank items in the contract were completed
so, confirm that these were initialled by both parties. properly by the agent and that the contract has
been signed by the vendor and purchaser. Also
13. If the purchaser is a company, undertake a check whether any hand-marked amendments
company search to confirm that the purchaser is a have been made and, if so, confirm that these were
registered company, and also confirm details of the initialled by both parties.
directors and secretary of the purchaser. Check that
the guarantee has been completed and executed 11. If the vendor is a company, undertake a
correctly if required. company search to confirm that the vendor is a
registered company, and also confirm details of the
directors and secretary of the vendor. Also confirm
whether there are security interests relating to the
property that need to be released at settlement.
12. If the client is nominating an additional or

substitute purchaser, prepare a nomination form for
signing by the purchaser and nominee. On return of
the nomination form, send it to the vendor’s
representative in the time required under the
contract.

VENDOR PURCHASER
Finalising the s 27 statement Reviewing and finalising the s 27 statement

14. Send the s 27 statement to the purchaser’s 13. Review the s 27 statement if received from the
representative and monitor dates so that the deposit vendor’s representative. If appropriate, write to the
can be released (28 days from service). If a signed vendor’s representative objecting to early release of
s 27 statement is received from the purchaser and the the deposit. If the information provided in the
estate agent is holding the deposit, forward a copy of statement is satisfactory, send the statement to
the signed statement to the agent confirming that they your client to sign, explaining its effect. On return of
may release the deposit (less the agent’s commission the signed s 27 statement, forward it to the vendor’s
and advertising costs) to the client. representative.
PEXA PEXA
15. Log in to PEXA. If purchaser’s lawyer has created 14, Log in to PEXA. If vendor’s lawyer has created
the workspace, accept invitation to join the the workspace, accept invitation to join the
workspace. Otherwise, create the workspace, and workspace. Otherwise, create the workspace, and
provide the required information in the workspace. provide the required information in the workspace.
16. Select who you represent and invite other 15. Select who you represent and invite other
participants to join the workspace. participants to join the workspace.
Reviewing and signing the transfer Preparing and signing the transfer and Notice of
17. Confirm details in the transfer prepared by the Acquisition
purchaser’s representative in the PEXA workspace. 16. Create the transfer in the PEXA workspace.
Once confirmed, digitally sign the transfer. The Notice of Acquisition (NOA) is created when
the transfer information is entered. Complete details
of the NOA. Once completed, digitally sign the
transfer and NOA.
Preparing the Digital Duties Form Completing and signing the Digital Duties Form
18. Prepare the State Revenue Office (SRO) Digital 17. Accept the vendor’s invitation to complete the
Duties Form by entering the contract information in SRO Digital Duties Form in Duties Online and
Duties Online to create a Transferor Statement. Invite complete relevant transferee details to create a
the purchaser’s representative to complete the Transferee Statement. Forward the Transferee
Transferee Statement, then forward the Transferor Statement to the purchaser for signing (an email
Statement to the vendor for signing (an email automatically generated by the SRO). When both
automatically generated by the SRO). parties have signed the form, land transfer duty can
be assessed in Duties Online and then stamp duty
can be verified in PEXA.
Release of security interests Release of security interests

19. Request a release of any charge over the 18. At least 21 days before settlement, send a
property from any chargee, including those holding a written request to the vendor’s representative for a
registered security interest on the Personal Property release of the property from any security interest as
Securities Register (PPSR), before or at settlement. registered on the PPSR, or any other registered
charge.

VENDOR PURCHASER
Payment of tax Payment of tax

20. If the property being sold is ‘new residential 19. Request a GST withholding notice from the
property’ or ‘potential residential land’, forward a GST vendor’s representative, if not already provided.
withholding notice to the purchaser’s representative Note the amount of GST to be forwarded to the
notifying them of the amount of GST to be withheld at ATO at settlement (withheld from the vendor’s
settlement. funds) and include as a destination financial line
item in the PEXA Financial Settlement Schedule.
20. Consider whether the FRCGW regime applies.

If it does apply and a clearance certificate has not
been received from the vendor, then withhold
12.5% of the contract price at settlement and
include as a destination financial line item in the
Financial Settlement Schedule.
Adjustments Adjustments
21. Check the statement of adjustments and 21. Prepare statement of adjustments and
settlement statement prepared by the purchaser’s settlement statement in the PEXA workspace. Send
representative and send a copy of the statement to a copy of the statement of adjustments to the client.
the client for their approval.
Confirm financial line items entered in the Financial
Request payout amount from outgoing mortgagee Settlement Schedule by the vendor’s
(if indicative payout not already received) and notify representative.
the client of this amount.
Obtain client’s account details for payment of surplus

funds in PEXA at settlement by phone or using
PEXA Key.
Populating and signing Financial Settlement Populating and signing Financial Settlement
Schedule Schedule
22. In the Financial Settlement Schedule, add as 22. In the Financial Settlement Schedule, add as
destination financial line items any council or water destination financial line items any payments to
rate payments, any payments to third parties and your third parties and your professional costs.
professional costs.
PEXA fees, LUV lodgment fees and land transfer
PEXA fees and LUV lodgment fees are automatically duty are automatically entered as destination
entered as destination financial line items. financial line items.
23. Once the Financial Settlement Schedule is 23. Once the Financial Settlement Schedule is
balanced, digitally sign it. balanced, digitally sign it. If money is to be debited
from the Subscriber’s trust account, sign as the
“trust signatory”.

VENDOR PURCHASER
Cancellation of utilities Availability of utilities

24. Advise the client to arrange a reading of gas, 24. Advise the client to set up new accounts for
electricity and water services and the cancellation of gas, electricity and water services and to connect
phone services from the settlement date. the phone services from the settlement date.
Preparing a settlement statement

25. Generate an SRO settlement statement from
the Digital Duties Form. This statement contains a
form ID and an SRO estimate of duty payable.
Pre-settlement Pre-settlement
25. Obtain any original leases from the client required 26. Send a pre-settlement letter to the client:
to be handed over at settlement. • attaching adjustments, settlement
statement, statement of account and tax
26. Prepare attornment notices or letters to the invoice; and
tenants (if any) advising of the sale of the property • advising the client to undertake a
and that rent should be paid to the purchaser after pre-settlement inspection within 7 days
settlement. before settlement.
Final searches
27. Send a pre-settlement letter to the client.
27. On the day of settlement, order a final search
and confirm there is no activity on title. PEXA also
runs an automated title activity check (TAC) on the
morning of settlement and 55 minutes before the
time of settlement.
Settlement Settlement
28. Once the workspace status is “Ready/Ready”, at 28. Once the workspace status is “Ready/Ready”,
settlement time the workspace will lock and at settlement time the workspace will lock and
settlement will commence. settlement will commence.
PEXA arranges for: PEXA arranges for:

• electronic documents to be lodged at LUV; • electronic documents to be lodged at LUV;
and and
• payment instructions to be sent and • payment instructions to be sent and
settlement money transferred, then disbursed settlement money transferred, then
to the nominated destination accounts. disbursed to the nominated destination
PEXA notifies Subscribers that settlement has been accounts.
effected. PEXA notifies Subscribers that settlement has been
effected.
29. Report to the client and the estate agent
(in writing) that settlement has been effected. After 29. Report to the client (in writing) that settlement
receipt of confirmation of settlement, the estate agent has been effected.
will release the keys to the purchaser.
Ask the client to confirm with the estate agent that
the agent has received written confirmation of
settlement before the client collects the keys from
the agent.

VENDOR PURCHASER
After settlement After settlement

30. If the property is a lot on a plan of subdivision, 30. Send attornment notices or letters to any
advise owners corporation (if any) of new owner’s tenants advising them of the change in ownership.
details within 1 month of settlement.
31. Email the Notice of Acquisition to the local
31. Send final letter to the client enclosing tax invoice, council and water authority. Any outstanding rates
trust statement, statement of adjustments and payments would have been entered as destination
settlement statement. financial line items and paid at settlement.
32. If there is no incoming mortgagee, the

purchaser’s representative attends to the payment
of land transfer duty via the SRO’s Duties Online
(DOL), otherwise the incoming mortgagee retrieves
and claims the settlement statement or ELNO
lodgment.
33. Send FRCGW amount to ATO (if relevant).
34. If the property is a lot on a plan of subdivision,

notify the owners corporation (if any) of the new
owner’s details within 1 month of settlement.
35. Send final letter to the client enclosing tax

invoice, trust statement, statement of adjustments
and settlement statement.
4 ESTATE AGENTS
4.1 Regulation of estate agents
Estate agents are regulated by the Estate Agents Act 1980 (Vic) (EAA) and regulations made under
the EAA. The EAA requires anyone in the business of selling, buying or otherwise dealing with or
disposing of land on behalf of any other person to hold an estate agent’s licence or to be employed by
a licensed estate agent as an agent’s representative.
The EAA imposes the following obligations on an estate agent:
• An estate agent may only recover commission and outgoings if there is a written authority signed
by the vendor (a copy of which must have been provided to the vendor). Commission may be a
flat rate or a percentage of the sale price, and the amount is a matter of negotiation between the
vendor and the estate agent: ss 49A and 50.
• An estate agent must advise a prospective vendor that all commission plus other outgoings are
negotiable, before the prospective vendor signs a written authority: s 49A(1)(b).
• An estate agent must, before a prospective vendor signs a written authority, disclose to the
prospective vendor if the estate agent is sharing the commission with someone other than a
licensed estate agent or agent’s representative in their agency, or a licensed estate agent they
are in partnership with: s 48. An estate agent must state an estimated selling price in a written
authority before the prospective vendor signs the authority and must not make any false
representations in relation to the estimate: ss 47A and 47B.
• When advertising a property, an estate agent must not quote or advertise a figure that is less than
the estimated selling price stated in the written authority: s 47C.
• An estate agent must not retain rebates but must pay them to the client: s 48A.

• An estate agent must not charge a vendor more for outgoings than the amount paid by the agent:
s 48B.
• An estate agent must not charge a vendor more than was authorised by the written authority:
s 50(4).
Estate agents are also bound by the rules of professional conduct set out in the Estate Agents
(Professional Conduct) Regulations 2018 (Vic). These regulations deal with the conduct of estate
agents and agents’ representatives and cover issues such as conflicts of interest, confidentiality, good
practice, dispute resolution and communication.
The general requirement set out in reg 16 provides for an estate agent or agent’s representative to
communicate to the principal (the person who engaged the estate agent) any offers made to the estate
agent/agent’s representative as soon as possible after the offer is made. Regulation 17 deals with bids
and offers at public auctions and creates an exception to the general requirement, such that an estate
agent/agent’s representative must not communicate to any person any bid or offer made after the
property has been knocked down to the successful bidder at a public auction, unless the vendor or
successful bidder at the auction refuses to sign the contract following the auction.
A vendor and purchaser can deal directly with each other without using an estate agent. However,
most vendors and purchasers deal with an estate agent. You should advise your client to deal only
with a licensed estate agent and recommend that it be verified that the agent is licensed. The Business
Licensing Authority, Victoria, keeps an online register of licensed estate agents.
Estate agents are bound by rules of professional conduct, and therefore must act ethically and
responsibly when dealing with both vendors and purchasers.
However, the relationship an estate agent has with a vendor is different from the relationship they have
with a purchaser. An estate agent is retained by the vendor and therefore is accountable, and owes a
fiduciary duty, to the vendor, not the purchaser.
An estate agent does, however, have a duty not to mislead purchasers in relation to the price of a
property. An estate agent who engages in misleading or deceptive conduct may breach Australian
Consumer Law (Competition and Consumer Act 2010 (Cth) Sch 2) (ACL) s 18, and an estate agent
who makes false or misleading representations may be liable under s 30.
A purchaser may engage an estate agent to act as a buyer’s advocate. A buyer’s advocate will usually
source properties, bid at auction and generally represent the purchaser throughout the purchasing
process in return for a fee. In this case, the estate agent acts in the capacity of the purchaser’s
representative rather than the vendor’s representative.
4.2 Authorities to sell

The EAA does not prescribe forms of authority. However, the REIV has prepared two standard forms
for use by its members – a general authority and an exclusive (or sole) authority. The REIV is an
industry association representing estate agents; in Victoria, most estate agents are members of the
REIV. Estate agents often use the forms of authority prepared by the REIV.
Under a general authority, a vendor can list with more than one estate agent and is only obliged to pay
commission to the agent who sells the property.
Under an exclusive or sole authority, a vendor engages the services of only one estate agent for a fixed
period. The written authority will end at the time specified in the written authority, or if no time is specified:
• in the case of an auction, 30 days after the date of the auction; and
• in any other case (for example, private sale), 60 days after the authority is signed by the vendor:
EAA s 54.

Where the estate agent sells the property during the authority period, they are entitled to the
commission.
An estate agent will often urge a vendor to sign an exclusive authority with a lengthy authority period.
However, this has several disadvantages, including that a vendor will not be able to appoint another
estate agent during the period should they become dissatisfied with the agent.
4.3 Unfair contract terms

Part 2-3 of the ACL regulates unfair terms of consumer contracts. A term is unfair if it would cause a
significant imbalance in the parties’ rights and obligations under the contract, it is not reasonably
necessary to protect the legitimate interests of the party who would be advantaged by the term, and it
would cause detriment to a party if it were to be applied or relied on.
The unfair contract term protections apply to all standard form contracts where:
• the contract is for the supply of goods or services or the sale or grant of an interest in land;
• at least one of the parties is a small business (that is, employs fewer than 20 people); and
• the upfront price payable under the contract is no more than $300,000, or $1m if the contact is for
more than 12 months.
A standard form contract is typically a “take it or leave it” contract, where negotiation on the contract
terms is limited. After 9 November 2023, a person is prohibited from making a contract with an unfair
contract term. A pecuniary penalty can be imposed if a person contravenes this prohibition.
4.4 Underquoting laws

Underquoting laws in the EAA apply to the sale of residential property but not to commercial, industrial
or rural property. Estate agents and their representatives’ obligations relate to:
• estimated selling price;
• reporting comparable property sales;
• a Statement of Information for prospective buyers; and
• advertising prices, terms and symbols.
The Statement of Information is a pricing fact sheet agents must prepare for every residential property
they are engaged to sell in Victoria. It must include an indicative selling price for the property, details
of the three property sales most comparable to the property for sale, and the median house or unit
price for the suburb. The Statement of Information must be:
• displayed at all “open for inspections”;
• included with online advertising;
• given to a prospective buyer within 2 business days of a request; and
• updated if there is a change in the indicative selling price.
When marketing a property for sale, agents may advertise the price as a single figure or a range of up
to 10%. They must not use any words or symbols to qualify the price, such as “offers above”, “from”,
or ”+”.
Agents who do not comply with the underquoting laws risk a penalty of more than $33,000 and, for
more serious offences, may also lose any commission they received for the property sale.
For further information on the underquoting laws, see the Consumer Affairs Victoria website.

5 METHODS OF SALE
5.1 Overview
There are three main ways a property can be bought and sold:
• private sale – the property is advertised and offers are invited from prospective purchasers. The
sale is negotiated between the vendor and purchaser (often with the assistance of an estate
agent);
• public auction – the property is advertised for public sale at a specific place, time and date.
Prospective bidders bid and the property is sold to the highest bidder (if the vendor accepts this
bid); and
• tender – the property is advertised for sale by an “expression of interest” or tender, which are
invited from prospective purchasers by a specified date. The vendor and successful tenderer
(if any) then enter into a contract of sale.
Residential properties are most commonly sold privately or by public auction. Commercial and
industrial properties are usually sold by public auction or tender.
There are some notable differences between the private sale, public auction and tender processes,
including:
• in a private sale, the parties may negotiate the terms of the contract and may agree to make the
contract conditional (for example, subject to finance). Generally, an auction contract is
unconditional. The vendor of a property for sale by tender can exercise their discretion whether to
accept conditions proposed by a prospective purchaser;
• in a private sale or sale by tender of residential property, the purchaser generally has a cooling-off
period of 3 business days. Where a purchaser buys a property at auction, there is no cooling-off
period under SLA s 31;
• the estate agent’s commission is generally the same whether the property is sold privately, at
auction or by tender. Advertising costs are often higher when selling by auction or by tender;
• where there is an auction or a sale by tender, the property is widely advertised, and opportunities
for market feedback are created; and
• an auction sometimes results in a quicker sale.
5.2 Auctions
An auction must be conducted according to the Rules for the Conduct of Public Auctions of Land
(auction rules) (Sale of Land (Public Auctions) Regulations 2014 (Vic) (SLPAR) Schs 1–4). Schedule 5
of the SLPAR contains an information statement concerning public auctions. The SLPAR provide for
different auction rules to apply according to the number of owners of the property being sold and
whether one or more of any co-owners intend to bid at the auction. The auction rules are required to
take a particular form as set out in SLPAR reg 6(2) and (6).
Regulation 6(1) of the SLPAR provides that the auctioneer must make available for public inspection
not less than 30 minutes before the auction starts:
• the relevant auction rules;
• the Information Concerning the Conduct of Public Auctions of Land (known as the information
statement); and
• any other conditions applying to the auction: SLA s 43.
An auctioneer must also audibly state certain matters before accepting any bid at an auction: SLPAR
reg 7. These include that:

• the auction will be conducted according to the auction rules and any additional conditions made
available for public inspection;
• the auction rules prohibit an auctioneer from accepting bids or offers after the property has been
knocked down to the successful bidder;
• the auctioneer must indicate bidders, on request; and
• the law prohibits false bids, major disruptions by bidders and attempts by bidders to prevent others
from bidding and provides for fines for such prohibited conduct.
If asked to do so by another person at the auction, the auctioneer must indicate the person who made
a bid before taking another bid: reg 8.
Dummy bidding
Dummy bidding is prohibited and subject to significant penalties: SLA s 38. A dummy bid is a bid by or
on behalf of a vendor (also referred to as a vendor bid) whether or not made at the request of, or with
the knowledge of, the vendor. It does not matter whether the person making the bid is in Victoria at the
time of the bid. Evidence that a person who made a bid had the intention of benefitting the vendor is
evidence that the person made the bid on the vendor’s behalf: s 38. An auctioneer is prohibited from
knowingly accepting a dummy bid and from acknowledging the making of a bid if no bid was
made: s 39.
Certain vendor bids are permissible: SLA s 41. See SLPAR reg 7 as to the limitations on vendor
bidding.
Disruption of auction prohibited

Section 47 of the SLA makes provision for the conduct of people attending auctions. Among other
things, a person must not:
• knowingly prevent or hinder an actual or potential rival bidder from attending, participating in or
bidding at an auction;
• harass an actual or potential rival bidder so as to interfere with the rival bidder’s attendance,
participation in or bidding at an auction; and
• induce or attempt to adduce an actual or potential rival bidder not to attend, or not to bid at, an
auction.
However, these prohibitions do not preclude a person at the auction from asking, in good faith, a
reasonable number of questions about the land, the contract of sale and the conduct of the
auction: s 47(6).
Reserve
An estate agent will ask a vendor to fix a reserve price – the lowest price at which the vendor is prepared
to sell their property. If the reserve price is not reached at auction, an auctioneer will pass in the
property (withdraw the property from auction) but will open negotiations with the highest bidder (where
the highest bid is not a vendor bid).
Advertising after an auction

If a property is passed in on a vendor bid, the estate agent must not quote the amount of this last bid
when advertising or marketing the property without disclosing that it was a vendor bid: SLA s 46.
Compensation
A purchaser who has suffered any loss or damage as a result of a person’s failure to comply with the
auction requirements under the SLA is entitled to compensation from that person: SLA s 44.

An application for compensation must be lodged with the Victorian Civil and Administrative Tribunal
(VCAT) before the second anniversary of the date of the auction: s 44(2). However, if VCAT is satisfied
that the application for compensation is frivolous, vexatious or without substance, it may order that the
applicant pay:
• compensation to the vendor for any loss or damage resulting from the application: s 44(3); and
• costs in relation to the application: s 44(4).
5.3 Tenders
Often, commercial and industrial properties, and sometimes residential properties, are sold by tender.
A tender is a written offer for the purchase of the property that is capable of acceptance by the vendor.
Generally, the tendering process is as follows:
• The vendor (often through an estate agent) advertises that they are seeking an expression of
interest and intending to request tenders.
• Interested parties contact the vendor or estate agent with an expression of interest and seeking
more information. They are provided with a request for tender and supporting documentation,
including a vendor statement and contract of sale.
• The interested parties submit tenders by the specified date.
• The tenders are usually sealed and are not opened before the final date for lodging tenders has
passed.
• A tender may be either conforming (complies with the conditions of the request for tender) or
non-conforming (does not comply with the conditions of the request for tender). The request for
tender usually specifies whether the vendor has any obligation to considering non-conforming
tenders.
• The request for tender usually provides specific conditions as to acceptance of a tender. Where a
vendor accepts a tender, the vendor and successful tenderer will then enter into a contract of sale.
Requests for an expression of interest and tenders are regarded as invitations to treat, not as offers.
Consequently, the vendor is not bound to sell to the most favourable tenderer. However, this is qualified
in the following ways:
• a vendor may promise to accept the most favourable tender; or
• the vendor may be contractually obliged to follow the rules set out in the request for tender.
6 OBTAINING INSTRUCTIONS
6.1 Verification of identity
The parties to a conveyancing transaction must have their identity verified. The Registrar’s
requirements for VOI require a legal representative to take reasonable steps to verify the identity of
each of their clients before dealings can be lodged at LUV for registration. The VOI requirements also
apply to confirming the identity of mortgagors. The VOI procedures apply to individuals and
corporations. The purpose of carrying out the VOI process is to reduce the risk of identity fraud and
the registration of fraudulent land transactions.
Land Use Victoria has published guides on its website to assist in the VOI procedure. The Legal
Practitioners’ Liability Committee has also developed online guides to assist lawyers in the VOI
process.
Rule 6.5 of the ARNECC Model Participation Rules contains current VOI requirements relating to
electronic transactions. Guidance notes have also been issued to help explain the model participation
rules: Model Participation Rules Guidance Note 2.

6.2 Due diligence

It is prudent for a purchaser to conduct due diligence before buying a commercial property. The due
diligence process involves investigating all things that might be relevant to assessing the value of the
property, as well as examining any possible risks associated with purchasing the property. The
purchaser will usually engage a lawyer and other experts to undertake the due diligence.
The purchaser’s representative may negotiate with the vendor’s representative to include in the
contract of sale special conditions to address any issues of concern arising from the due diligence
process, or warranties to address any issues undetected by conducting due diligence. A vendor will
usually resist providing additional warranties and will usually exclude any liability in relation to matters
that they disclosed during the due diligence process or that the purchaser has knowledge of.
The vendor will usually engage a lawyer to assist in making full disclosure to a purchaser of all relevant
documents pertaining to the property, and generally in relation to the due diligence process.
The extent of the due diligence will be governed by the complexity of the transaction, the purchaser’s
budget and the time available for the purchaser to undertake the due diligence.
Where a purchaser is engaged in due diligence and any of the documents contain commercially
sensitive or confidential information, a vendor may require the purchaser to enter into a confidentiality
agreement with the vendor to protect the vendor against the purchaser disclosing that information.
Where a large number of documents are being made available to a purchaser and/or the documents
contain confidential information, the documents may be placed in a central location (often referred to
as a “data room”) with the purchaser being given access during a specified period. The vendor’s lawyer
will usually prepare a document (often in the form of a deed poll signed by the purchaser) regulating
access to, and use of, the data room.
Where there is vacant residential land or land on which there is a residence, the estate agent (or vendor
where there is no estate agent) must provide to a purchaser a due diligence checklist from the time the
land is offered for sale. The due diligence checklist is available on the Consumer Affairs Victoria
website. Where there is no estate agent, lawyers should inform their vendor client of the need to provide
the checklist. A purchaser has no rights where the due diligence checklist is not provided but a fine
may be imposed.
7 BUILDING ENERGY EFFICIENCY DISCLOSURE

Section 11 of the Building Energy Efficiency Disclosure Act 2010 (Cth) provides that a corporation that
owns a disclosure-affected building must not offer or continue to offer to sell the building or invite or
continue to invite offers to purchase the building unless a valid, current building energy efficiency
certificate (BEEC) for the building is registered. A disclosure-affected building is one that is used or
capable of being used as an office, and is of a kind that has been determined to be disclosure
affected: s 3.
A building (including all areas in that building) is not disclosure affected if:
• the building is a mixed use building and the total office space comprises less than 75% of the total
space by net lettable area (or gross lettable area);
• the building is either new or subject to major refurbishment and a certificate of occupancy has
either not been issued or was issued less than 2 years prior; or
• the building is held under strata title.
All other buildings are disclosure affected where the office space in the building (or area of a building)
is 1,000m2 or more.

Building owners are required to:

• obtain and register a BEEC when selling or leasing a disclosure-affected office building or area of
a building: ss 11 or 12;
• include the BEEC energy efficiency star rating for the building in any advertisement for the sale,
lease or sublease of the building or area: s 15; and
• provide information about, and access to, a disclosure-affected office if requested by a CBD
Accredited Assessor: s 18.
Tenants (including lessors and sub-lessors) have corresponding obligations in that they must:
• obtain and register a BEEC when subletting a disclosure-affected office: ss 11 and 12;
• include the BEEC energy efficiency star rating for the building in any advertisement for the
sublease of the building or area: s 15; and
• provide information about, and access to, a disclosure-affected office if requested by a CBD
Accredited Assessor: s 18.
More information about the national Commercial Building Disclosure Program is available on the
Commercial Building Disclosure Program website.
8 VENDOR STATEMENT
8.1 Overview
In addition to the minimal disclosure obligations imposed on a vendor by the common law, there are
statutory disclosure obligations on the part of a vendor: SLA s 32. A vendor is required to give a signed
statement, known as a “vendor statement”, to the purchaser before the purchaser signs the contract
of sale. A vendor cannot contract out of any s 32 disclosure requirements.
A vendor’s representative is responsible for preparing the vendor statement. Once prepared, the
vendor statement is signed by the vendor and made available to prospective purchasers, usually by
the estate agent.
8.2 Content of the vendor statement

Under SLA s 32A, the vendor statement must contain the following financial matters in respect of
the land:
• information concerning any mortgage (whether registered or unregistered), which is not to be
discharged before settlement;
• information concerning any statutory charge (whether registered or unregistered);
• information concerning the amount of rates, taxes, charges or similar outgoings affecting the land,
including any interest, and a statement that the total amount does not exceed the amount
specified: s 32A(c)(i) and (ii); and
• in the case of a terms contract, the information set out in SLA Sch 2.
Section 32B requires the vendor to provide to the purchaser of a property on which there is a residence:
• if the contract for the sale of the land does not provide for the land to remain at the risk of the
vendor until the purchaser becomes entitled to possession or receipt of rents and profits –
particulars of any policy of insurance maintained by the vendor in respect of any damage to or
destruction of the land; and
• in the case of a residence to which Building Act 1993 (Vic) (Building Act) s 137B applies that was
constructed within the preceding 6 years – particulars of any required insurance under that Act
applying to that residence.

Section 32C provides that the vendor statement must contain the following information in connection
with a property:
• a description of any easement, covenant or other similar restriction (whether registered or
unregistered) and information concerning any existing failure to comply with their terms;
• if the land is a designated bushfire prone area within the meaning of regulations made under the
Building Act, a statement that the land is in such area;
• if there is no access to the property by road, a statement that there is no such access; and
• planning information, namely;
– the applicable planning instrument;
– the applicable responsible authority;
– the zoning of the land; and
– the name of any planning overlay affecting the land.
Information concerning any notice, order, declaration, report or recommendation of a public authority
or government department or approved proposal the vendor might reasonably be expected to have
knowledge of (including any notice of intention to acquire under the Land Acquisition and
Compensation Act 1986 (Vic)) must be disclosed: SLA s 32D.
A vendor statement must contain particulars of any building permit issued under the Building Act in the
preceding 7 years in relation to a building on the land: SLA s 32E.
If the land is a lot on a plan of subdivision and is affected by an owners corporation within the meaning
of the Owners Corporations Act 2006 (Vic) (OCA), the vendor must also comply with SLA s 32F. The
vendor must either:
• attach to the vendor statement and contract of sale for each owners corporation affecting the land
a copy of the current owners corporation certificate containing the information prescribed under
OCA s 151(4)(a) and Owners Corporations Regulations 2018 (Vic) (OCR) reg 11; or
• specify in the vendor statement the information prescribed in OCA s 151(4)(a) relating to the
owners corporation; and
• attach to the vendor statement a copy of the documents prescribed under OCA s 151(4)(b),
including:
– a copy of the owners corporation rules, whether the model rules under OCA s 139 (prescribed
under reg 8 in the form of OCR Sch 2) or rules made under OCA s 138;
– the Statement of Advice and Information for Prospective Purchasers and Lot Owners
prescribed under reg 12 in the form of OCR Sch 3;
– a copy of all resolutions made at the last annual general meeting of the owners corporation;
and
– a statement advising that further information on prescribed matters can be obtained by
inspection of the owners corporation register: OCA Pt 9 Div 2.
It is essential that all this information be attached to the vendor statement. The fee prescribed for each
certificate is $150 (inclusive of GST): OCR reg 10.
The SLA does not prescribe the form the vendor statement must take, and lawyers generally prepare
their own form of the vendor statement or use the form prepared by the REIV and the LIV. The REIV/LIV
current form of vendor statement is available on the Law Institute of Victoria website.
If the owners corporation is inactive, this should be specified in the vendor statement.
A vendor statement must specify information as to whether the land is in accordance with a work-in-kind
agreement (within the meaning of Planning and Environment Act 1987 (Vic) (PEA) Pt 9B): SLA s 32G(1),
that is:

• land that is to be transferred under the agreement;

• land on which works are to be carried out under the agreement (other than Crown land); or
• land in respect of which a growth areas infrastructure contribution (GAIC) is imposed.
In the case of land for which there is a GAIC recording (within the meaning of PEA Pt 9B), the following
certificates or notices must also be attached (s 32G(2)):
(a) any certificate of release from liability to pay a growth areas infrastructure contribution imposed in
respect of the land issued under that Part;
(b) any certificate of deferral of the liability to pay the whole or part of a growth areas infrastructure
contribution imposed in respect of the land issued under that Part;
(c) any certificate of exemption from liability to pay a growth areas infrastructure contribution imposed in
respect of the land issued under that Part;
(d) any certificate of staged payment approval;
(e) any certificate of no GAIC liability relating to the land issued under that Part;
(f) any notice given under that Part providing evidence of the grant of a reduction of the whole or part of
the liability to pay a growth areas infrastructure contribution imposed in respect of the land or an
exemption from that liability;
(g) if no certificate or notice of a type specified in paragraphs (a) to (f) is provided, a GAIC certificate
relating to the land issued under that Part.
The vendor must provide disclosure of certain services that are not connected to the land, including
electricity supply, gas supply, water supply, sewerage and telephone services: s 32H.
A copy of relevant title documents must also be attached to the vendor statement: SLA s 32I. In the
case of land under the TLA, this includes a copy of the Register Search Statement and the document,
or part of the document, referred to as the diagram location in the Register Search Statement that
identifies the land and its location: s 32I(a).
8.3 Attached property certificates and title documents

Under SLA s 32, the vendor may disclose certain information about the property that is required to be
disclosed by attaching a copy of the relevant certificate issued by a public authority. The matters that
may be disclosed in this way are those concerning:
• applicable planning instruments: s 32C(d);
• rates, taxes, charges and other outgoings: s 32A(c); and
• any notice, order, declaration, report or recommendation of a public authority or government
department or approved proposal: s 32D.
In addition, information on restrictions affecting the property can be provided by attaching copies of the
relevant title documents: s 32C(a).
Once you receive instructions, you will need to prepare the vendor statement. You should undertake
the following enquires and obtain the following certificates:
• title search;
• planning certificate issued by LANDATA (a business of LUV) or by the local council;
• land information certificate from the local council;
• fire services property levy from the local council;
• water rates and encumbrances information statement from the local water authority;
• building permit information from the local council;
• certificate from VicRoads;
• land tax clearance certificate from the SRO;
• extract from Environment Protection Authority (EPA) Priority Sites Register;

• owners corporation certificate (if applicable);

• heritage certificate (if appropriate);
• Aboriginal Heritage Register certificate (if appropriate);
• GAIC certificate;
• bushfire prone area report; and
• any emergency order, building notice or building order relating to combustible cladding.
If the vendor is a corporation and the property includes a commercial building that may be disclosure
affected, you should also obtain the relevant NABERS (National Australian Built Environment Rating
System) or BEEC.
You should let your client know beforehand that you will be undertaking searches and the costs
involved.
You should also obtain detailed instructions from the client regarding the property and the sale, such
as by sending the client a questionnaire to complete. See Appendix 2 for examples in relation to
residential and commercial properties.
Once you have prepared a draft vendor statement, you should submit it to your client for review and
approval and advise your client of the consequences under the SLA of supplying false information or
failing to supply all required information.
8.4 Issues arising in respect of disclosures in a vendor statement

Some issues arising in respect of disclosures in the vendor statement are set out below. These are not
definitive, and you must consider the particular circumstances of the property when preparing the
vendor statement.
Mortgages
The vendor statement must disclose any mortgage not to be discharged at settlement: SLA s 32A(a).
“Mortgage” is defined broadly in the SLA to include a charge or lien to secure money (subject to some
limited exceptions). However, it is rare for a property to be sold subject to a mortgage, and mortgages
are usually discharged at settlement.
Statutory charges
All charges imposed under an Act affecting the property, whether they will be discharged at settlement
or not, must be disclosed: SLA s 32A(b). Examples of such charges are road construction costs,
sewerage scheme connection costs, and rates and land tax that are due but unpaid.
A deferred GAIC is also a charge on the affected land, has priority over all other encumbrances the
land is subject to, and can be recorded on title: PEA s 201SQ.
Easements, covenants, etc

Any registered or unregistered easements, covenants and other similar restrictions affecting the
property must be disclosed in the vendor statement: SLA s 32C(a).
You can find out what registered easements and covenants affect the property by ordering a title
search. If the description of the easement or covenant on title is insufficient to describe it adequately,
a copy of the document that created the easement or covenant must be attached to the vendor
statement.
Unregistered easements, covenants and similar restrictions generally can only be disclosed by your
client (the vendor). Unregistered easements may include the existence of a water, sewerage or

drainage pipe. Information about these can usually be obtained from the relevant water authority.
Unregistered restrictions may include the existence of an option to purchase the property.
Restrictive and ongoing conditions attaching to a planning permit may also constitute restrictions on
the property, particularly where the conditions affect the use of the property and will continue beyond
settlement. It is prudent to search the planning permits that currently apply to the property by requesting
copies from the local council or searching the property file at the local council’s office, and attaching
applicable planning permits to the vendor statement.
Whether a lease is a restriction on a property remains unsettled. It should, therefore, be disclosed in
the vendor statement. The preferred view is that if the property is sold subject to a lease, the lease
should not be disclosed in the vendor statement but should be attached to the contract of sale.
Particulars of any such leases must be included in the particulars of sale in the contract.
A current breach of any easement, covenant or restriction must also be disclosed.
Forest carbon rights and Forestry and Carbon Management Agreements

Part 4 of the Climate Change Act 2010 (Vic) (Climate Change Act) affects Torrens land. You should
be aware that the Climate Change Act allows for the creation of forest carbon rights and Forestry and
Carbon Management Agreements. Among its main purposes, the Act is intended to:
• provide a framework for the Victorian Government’s roles and responsibilities in response to
climate change;
• provide for a strategic response to climate change through a Climate Change Adaptation Plan;
• promote collaboration, co-operation and innovation in response to climate change; and
• promote transparency and accountability through the provision of accessible information on
climate change to the Victorian community.
The Climate Change Act provides for the creation of forest carbon rights that create an interest in the
land that can be registered, transferred, mortgaged or surrendered: Pt 4 Div 2. A forest carbon right is
created by an instrument of transfer in a form approved by the Registrar under the TLA: Climate
Change Act s 26. The existence of a registered forest carbon right would appear on a current certificate
of title or most recent Register Search Statement for the land.
Within the context of the vendor statement requirements in SLA s 32, an agreement for the transfer of
a forest carbon right does not constitute an agreement for sale of land. A vendor statement is not
required with an agreement solely to transfer a forest carbon right: s 32P.
The Climate Change Act also allows for the creation of Forestry and Carbon Management Agreements,
which do not create an interest in land but may be recorded on title: Pt 4 Div 3. If the agreement is
recorded on title, the registered proprietor’s obligations under the Forestry and Carbon Management
Agreement run with the land.
You should discuss the existence and terms of any such forest carbon right or Forestry and Carbon
Management Agreement with your client before proceeding with the sale of land contract.
For a description of how the Climate Change Act affects land registry procedures, see Land Victoria
Customer Bulletin No 130/2011.
Planning
Disclosure of planning information under SLA s 32C(d) is intended to provide the purchaser with the
basic details of the relevant planning instrument, the responsible authority, and the zoning or
reservation of the property. The vendor is not required to annex parts of the planning scheme to the
vendor statement or to explain the impact of the planning scheme on the property. Once the basic
details are disclosed, it is the purchaser’s responsibility to ascertain the effect of any planning
restrictions affecting the property.

Rates, taxes, etc

The vendor statement must include information about the rates, taxes, charges and outgoings affecting
the property (including interest on unpaid amounts) that the purchaser may become liable to pay as a
consequence of the purchase, of which the vendor would reasonably be expected to have knowledge:
SLA s 32A(c). The amount can be inserted as a maximum figure for total rates and charges applying
to the property. The more prudent approach is to attach certificates to the vendor statement, because
due and unpaid rates and land tax constitute currently existing charges over the property that must be
disclosed.
Certificates are available for council rates, water rates, land tax and GAIC. There may be other charges
or outgoings affecting the property, such as the community infrastructure levy, which may become
payable in the future, and that should be disclosed.
Any outgoings arising only because of the transfer of the property to the purchaser must be disclosed,
for example, special land tax. Part 4 Div 5 of the Land Tax Act 2005 (Vic) allows for certain properties
that have been exempt from land tax to be assessed for a one-off special land tax after a change of
ownership if the use of the property changes. If the use changes upon the sale or within 60 days of the
sale, the previous owner is liable, but if the use changes more than 60 days after the change of
ownership, the new owner is liable.
The vendor statement should also disclose if the property being sold is assessed as part of a larger
piece of land.
Notices, orders, etc

Examples of notices and orders that require disclosure (SLA s 32D) include:
• a building notice requiring works to be performed on the property;
• notification of the property being listed on the EPA Priority Sites Register or the issue of a
statement of environmental audit under the Environment Protection Act 1970 (Vic); and
• notification under the Heritage Act 1995 (Vic) that the property has been nominated for inclusion
in the Victorian Heritage Register.
Services
The vendor must provide disclosure of non-connected services: SLA s 32H.
Title
A copy of the Register Search Statement should be attached to the vendor statement. The term
“Register Search Statement” is used by LUV and is generally understood to be a title search: SLA
s 321.
If the vendor is not the registered owner of the property, evidence of the vendor’s right to sell is required.
If the land has ever been subdivided, a copy of the plan of subdivision must be attached to the vendor
statement.
If the land is a lot on a proposed plan of subdivision, a copy of the proposed plan must be attached to
the vendor statement. This will be a copy of the certified plan if the plan has been certified by the local
council, or a copy of the latest version (including any proposed amendments) of the plan if it has not
yet been certified: SLA s 32I(d).
See SLA s 32I(e) for the requirements where the land is in a staged subdivision.

8.5 Consequences of insufficient or incorrect information in a

vendor statement
Where a vendor supplies false information or fails to supply all the information specified in SLA s 32:
• the vendor is guilty of an offence: s 32L; and
• the purchaser can rescind the contract entered into on the basis of that information at any time
before the purchaser accepts title and becomes entitled to possession or to the receipt of rents or
profits: s 32K(2).
However, if a vendor has acted honestly, reasonably and ought fairly to be excused, then if the
purchaser is in substantially as good a position as if all the relevant information had been provided, the
court may determine that the purchaser is not entitled to rescind: SLA s 32K(4). Whether the vendor
has acted reasonably is determined according to an objective test: Payne v Morrison (1992) V ConvR
¶54-428; Paterson v Batrouney [2000] VSC 313; McHutchison v Asli [2017] VSC 258.
8.6 Previous contract

Under SLA s 320, the vendor is not required to give the purchaser another vendor statement where
the parties:
• have already entered into a previous contract of sale and the vendor has given the purchaser a
vendor statement; and
• enter a subsequent contract for the same land on substantially the same terms.
9 SALE INVOLVING OWNERS CORPORATION

A person must not sell land affected by an owners corporation (often referred to as a lot on a plan of
subdivision) unless the vendor or the owners corporation has a current insurance policy in accordance
with the OCA: SLA s 11. Failure to comply with this section makes the contract voidable at the option of
the purchaser before settlement.
Under the OCA, an owners corporation has an insurable interest in the land affected by the owners
corporation (s 56) and must have the following insurance:
• reinstatement and replacement insurance for all buildings on the common property: s 59;
• public liability insurance for the common property of not less than $10m (or another amount
prescribed) per claim: s 60; and
• in a multi-level development, if a building on the plan of subdivision is located above or below
common property, a reserve or a lot then the owners corporation must take out reinstatement and
replacement insurance for all buildings on each lot in the plan as well as public liability insurance
for the common property: s 61.
An owners corporation may also have additional insurance: s 62. None of these provisions or the
regulations limit a lot owner’s right to insure against destruction of or damage to their lot or interest in
the property.
For further information, see Practice Paper P303 Conveyancing of Units and Subdivided Property.
10 CONTRACT
10.1 Outline
The Instruments Act 1958 (Vic) requires a contract of sale of land to be in writing and signed by the
party against whom it is to be enforced (or a person authorised in writing to sign on that party’s behalf),

before the other party can enforce the contract: s 126. Where these requirements are not met, a
contract may still be enforceable in equity if the requirements for part performance are satisfied.
10.2 Contract of sale of land

There is no prescribed form of contract for use by lawyers. However, many lawyers use the standard
contract published by the LIV/REIV, which consists of particulars of sale and general conditions (GCs)
with provision to insert special conditions.
An estate agent can fill out the contract of sale of land, but in that case the contract must be in a form
approved by the Legal Services Board or a professional association within the meaning of the LPUL,
such as the LIV: EAA s 53A.
11 REVIEW OF THE CONTRACT

11.1 Outline
In many cases, your client will ask you to review the contract before they have signed it. Before signing,
there is an opportunity to amend the contract by inserting special conditions and striking out provisions.
You may recommend amendments to the purchaser, and where the purchaser provides instructions
you may negotiate amendments with the vendor’s lawyer. In other cases, you will receive the contract
after it has already been signed and therefore there is no opportunity to amend the contract. Where
you receive a signed contract, your review will consist of drawing issues of concern to your client’s
attention.
Matters to consider when reviewing the contract of sale are set out in the following paragraphs. You
will always need to read the contract in full and consider the individual circumstances of the
transaction.
11.2 Execution
The contract is usually signed on the front page. You should check the contract has been signed
properly by each party as set out below:
• An individual should sign and date the contract personally, print their name and state the nature
of their authority (if applicable). There is no need for a witness.
• Where a person signs the contract on another’s behalf, you should obtain a copy of the written
authority. Ideally, the authority should be given by a power of attorney. However, an authority may
be given in writing under Instruments Act 1958 (Vic) s 126.
• Where a contract is executed on a company’s behalf, it is preferable if it is signed by two directors
or a director and secretary (or where it is a single director/secretary company, by that person)
either with or without a company seal in accordance with Corporations Act 2001 (Cth) s 127.
If, however, an authorised officer signs the contract on the company’s behalf, you should seek
appropriate evidence that the signatory had appropriate authority to do so, as well as undertake a
company search to obtain details of the company’s officers so you can confirm that the contract
was executed properly.
You should check that any hand-marked amendments to the contract have been initialled by both
parties.
11.3 Cooling-off period

A purchaser of land has a cooling-off period of 3 clear business days after the purchaser has signed
the contract for the purchase of the land, except in relation to land used primarily for industrial or
commercial purposes and more than 20 hectares and used for farming: SLA s 31.

During the cooling-off period, the purchaser can terminate the contract by written notice and obtain a
refund of all money paid, except for $100 or 0.2% of the purchase price, whichever is greater. The
notice can be given either by hand delivery or by leaving it at the address of the vendor or its agent.
A cooling-off notice is permitted to be served on the vendor’s estate agent, even if the agent’s authority
has expired at the time of service: standard contract GC 27.2.
A contract SLA s 31 applies to must contain a conspicuous notice advising the purchaser of their
cooling-off rights, otherwise the purchaser may rescind the contract at any time before they become
entitled to possession of, or the receipt of rents and profits from, the property (usually settlement):
s 31(6). In the standard contract, the conspicuous notice given under s 31(6) is found under the
heading “Important Notice to Purchasers”.
The cooling-off period does not apply where (s 31(5)):
• the sale is by publicly advertised auction;
• the property is purchased within 3 clear business days before or after a publicly advertised auction;
• the purchaser has previously signed a contract with the vendor for the same property in
substantially the same terms; or
• the purchaser is an estate agent within the meaning of the EAA or a corporate body.
11.4 Vendor
You should ensure the vendor’s name is spelt correctly, in full, and matches the name of the registered
owner on the title search (unless there is other evidence of the vendor’s right to sell).
11.5 Purchaser
You should ensure the purchaser’s name is spelled correctly and in full, including their middle names,
if any.
Where there is more than one purchaser, you should ensure that, unless the purchasers intend to buy
as joint tenants or as tenants in common in equal shares, the contract specifies the intended division
of shares between the purchasers. Where a contract of sale fails to specify the division of shares
between two or more purchasers, the SRO will assume that the purchasers intended to purchase the
property as joint tenants; they will then be regarded as holding the dutiable property as tenants in
common in equal shares for the purpose of assessing duty: Duties Act Bulletin D6/04. However, if the
transfer specifies an unequal division of shares, the SRO may consider this to indicate the existence
of two distinct transfers, each liable to a separate duty assessment. This may result in double duty
being payable unless the purchasers are spouses or domestic partners, in which case the second
deemed transaction would be exempt from duty if the property was to be their principal place of
residence.
11.6 Property address and land

You should check that the property address and land have been accurately completed.
An error in the description of the land does not invalidate the sale, nor does it entitle the purchaser to
make any objection or claim for compensation or to require the vendor to amend title or pay any cost
of amending the title: standard contract GC 7.
11.7 Goods
Goods, also known as chattels, are not included in a sale unless they are expressly identified as
included in the sale (usually listed in the particulars of sale of the contract). If the purchaser expects
any goods to be included in the sale, then an accurate description should be clearly stated in the
contract. Items like the stove, hot water service, heating or air-conditioning system, dishwasher,

television aerials and floor coverings should all be listed. If items are to be excluded from the sale, this
should be specifically stated in the contract (by special condition) to avoid any doubts. Fixtures are not
usually specified in the contract as they will pass with the land.
For a commercial property, a schedule of fixtures and fittings included in the sale is usually attached
to the contract. The purchaser should read this schedule carefully and advise you whether it includes
all items that the purchaser expects to remain with the property at settlement. Where the sale is subject
to a lease or leases, any fixtures or fittings owned by a tenant will not form part of the sale. The
purchaser should obtain details of any items owned by a tenant. Lawyers for both the vendor and the
purchaser should also consider the taxation implications of the inclusion of any fixtures and fittings in
the sale. Expert advice may be required.
11.8 Payment
You should check that the purchase price, including both the deposit and the balance, is accurately
stated in the contract.
11.9 Day of sale/settlement date

The day of sale is the date by which both parties have signed the contract and the date that the last
party (usually the vendor) signs the contract.
The settlement date should be diarised. This is the date that the purchaser pays the balance of the
purchase price to the vendor in exchange for the title to the property. The settlement date should be
stated in the particulars of sale and is often referable to the day of sale (for example, 60 days after
the day of sale).
11.10 Encumbrances and leases

The purchaser buys the property subject to the encumbrances identified in the contract and the vendor
statement. You should consider these encumbrances and bring any issues of concern to your client’s
attention.
If a property is sold subject to a lease, details must be included in the particulars of sale. If you are
acting for the purchaser, you should draw your client’s attention to the fact that they take the property
subject to the lease, and identify any issues concerning the lease.
11.11 General conditions

The standard contract contains general conditions dealing with encumbrances, vendor warranties,
identity of the land, services, consents, transfer, release of security interests, builder warranty
insurance, general law land, settlement, electronic signatures, electronic settlement, payment, stake
holding, GST, loans, adjustments, time, service, nominees, liability of signatories, guarantees, notices,
inspection, terms contracts, GST withholding, FRCGW, deposit bonds, bank guarantees, pest and
building inspections, loss or damage before settlement, breach, interest and default.
Where the standard contract is used, you should consider any amendments made to the general
conditions and the implications of these amendments. Amendments may be made by hand, although
lawyers may prepare their own form of the general conditions.
The vendor warrants that the general conditions of the contract (that is, GCs 1–35) are identical to
those prescribed in the standard contract published by the LIV/REIV: GC 6.1. Any modifications to
the general conditions in the standard contract must be properly achieved by the use of special
conditions.

11.12 Special conditions

Generally, a contract of sale of residential land will not contain many special conditions. However, an
off-the-plan contract and a contract of sale of commercial land are both likely to contain many additional
special conditions, which are inserted into the contract after the particulars of sale. There is no standard
list of special conditions; lawyers typically have their own. Where you act for a vendor, you may need
to insert specific special conditions to address any unique aspects of the transaction.
Where you act for a purchaser, you should consider and advise on any special conditions, particularly
drawing any onerous special conditions to your client’s attention. Where there is an opportunity to
negotiate the contract, you may recommend changes to the special conditions.
11.13 Guarantees
A vendor may require one or more directors of the purchaser to guarantee the purchaser’s performance
of the contract if the purchaser is a proprietary limited company: standard contract GC 3. The vendor
may then specify the required form of guarantee once contracts have been exchanged.
A contract of sale, particularly of commercial land, may contain a special condition requiring a
purchaser that is a proprietary limited company to provide a personal guarantee from the directors of
the company or other appropriate persons. In that case, the form of guarantee is usually attached to
the contract of sale. The rationale behind this requirement, whether under the general condition or in
a special condition, is that a proprietary company may just be a shelf company with few assets, and
the vendor requires protection in the event of a default by the purchaser.
When acting for the vendor, you should ensure that where the purchaser is required to provide a
guarantee, it has done so and that the guarantee has been signed and completed properly. When
acting for the purchaser, you should ensure that you advise your client fully about the meaning and
effect of the guarantee before they sign it.
12 TERMS CONTRACTS
If the vendor is in a position to provide finance to the purchaser, the vendor may agree to the purchaser
paying the purchase price by an instalment plan. This is known as a “terms contract”.
Section 29A of the SLA defines a terms contract as a contract of sale of land under which the
purchaser is:
• obliged to make two or more payments (other than a deposit or final payment) to the vendor after
the execution of the contract and before they are entitled to a conveyance or transfer of the land;
or
• entitled to possession or occupation of the land or is in receipt of rents or profits before they
become entitled to a conveyance or transfer of the land.
Any payments made prior to possession or when the purchaser becomes entitled to a transfer are not
counted for the purpose of determining whether the contract is a terms contract or not: SLA s 29A(1A).
A deposit is a part of the purchase price specified in the contract as a deposit and required to be paid
within 60 days of the execution of the contract: SLA s 29(2). It can be paid in more than one amount
provided it is paid within the 60 days. Any amount paid by a purchaser as a result of a default does not
make the contract a terms contract.
The SLA provides for a number of general consequences of a contract being a terms contract:
• if the land sold is Torrens system land, the vendor must be the registered proprietor or be presently
entitled to become the registered proprietor or be empowered by an Act of Parliament to sell the
land, unless the vendor has first obtained the consent of an arbitrator or the contract is of a class
prescribed under regulation: ss 29B and 29C;

• if the purchaser is not in default under the contract, the purchaser is entitled, after acceptance of
title and before payment in full of the purchase price, to call for a transfer of the land with a
mortgage back to the vendor to secure the outstanding money: s 29H;
• the vendor is entitled to require the purchaser to take title with a mortgage back to the vendor and
other persons that the vendor requires, but the purchaser’s obligations under the mortgage must
be no more onerous than under the terms contract: s 29Q;
• if the vendor mortgages land that is the subject of a terms contract, the contract is voidable at the
option of the purchaser at any time before completion and the vendor is guilty of an offence: s 29S;
• land that is subject to a mortgage cannot be sold under a terms contract unless certain conditions
are met: s 29M; and
• a lawyer practising within 50km of Melbourne must not act for both vendor and purchaser: s 29W.
The SLA bans some types of terms contracts known as “rent to buy” contracts, which involve a
purchaser going into possession of a residential property and paying rent until settlement occurs at
some date in the future: ss 29WA–29WG. In addition, “land banking schemes” are regulated by the
SLA: ss 29WH and 29WI.
13 OFF-THE-PLAN CONTRACTS
13.1 Outline
Generally, it is not possible to sell a piece of land unless the land has, or is entitled to have, its
own separate title as at the date of the contract. The exception to this rule is where land is sold
subject to a proposed plan of subdivision (commonly referred to as an off-the-plan sale). Settlement of
an off-the-plan contract cannot take place until the plan is registered and the new title is issued.
13.2 Subdivision process

A subdivision is a two-stage process involving planning and certification. The process can be
summarised as follows (note that this is intended as a guide only):
• a licensed surveyor prepares the plan of subdivision;
• the plan is submitted to the local council with a planning application;
• the council refers the application to referral authorities (for example, water authority) for consent;
• a planning permit is issued for the subdivision;
• the plan is submitted to the council for certification. Where approval was given by referral
authorities to the plan subject to certain requirements, the council refers the plan to the referral
authorities to check on the details;
• the council certifies the plan;
• the applicant advises the council that subdivision works are complete, any conditions in the
planning permit have been complied with and the referral authority requirements have been met.
The council then issues a statement of compliance;
• the issue of a statement of compliance relating to a plan of subdivision of land in the contribution
area (as defined in s 201RC) is a GAIC event under PEA s 201RA; and
• the plan and statement of compliance are lodged in paper at LUV or online through SPEAR, which
is part of LUV. Land Use Victoria checks and registers the plan, then issues new titles.
Note that in the past there were different methods of subdivision, including company share schemes,
stratum title subdivisions, strata subdivisions and cluster subdivisions, which you may come across in
practice. For further information, see Practice Paper P303 Conveyancing of Units and Subdivided
Property.

13.3 Plan of subdivision

The following issues should be considered when you are advising a client on a plan of subdivision:
• A plan of subdivision that creates an owners corporation will set out a schedule of lot entitlement
and liability. Lot entitlement is the share of each lot in the common property, and establishes voting
rights at general meetings of the owners corporation. Lot liability determines the proportion of the
administrative and general expenses of the owners corporation that the lot owner is obliged to
pay.
• Lots can consist of land, airspace or buildings, or any combination of these, and are defined by
their boundaries. The plan will specify the location of the boundary.
• The plan may create common property; that is, all the land on the plan except the lots. Common
property is not always specifically set out on the plan.
• The plan may create one or more owners corporation (and must create one, if there is common
property).
• The plan may expressly create easements or restrictions. The Subdivision Act 1988 (Vic)
(Subdivision Act) provides for easements to be implied on some plans of subdivision. These
implied easements relate to matters such as support, shelter, protection, passage of services,
rights of way, and light. They must be necessary for the use and enjoyment of the lot or for the
benefit of the common property but must not interfere with the reasonable use and enjoyment of
other lots or the common property.
• The Subdivision Act allows for staged subdivisions, whereby a subdivision may be developed in
a number of stages. If a plan is staged, there will be a stage number in the top line of the plan.
This can have significant consequences for a client. Staged subdivisions provide the vendor with
flexibility; for example, the vendor may create additional lots on subsequent stages or create, vary
or remove easements. Most of this can be done without obtaining the consent of the lot owners
on earlier stages.
• A council or referral authority may require the applicant for the subdivision to set aside on the plan,
a public open space and/or to pay a pay an open space contribution of up to 5% of the value of
the land on the subdivision.
• If the land is in a contribution area under PEA s 201RC, you should also advise your client in
relation to the GAIC.
Often an agreement under PEA s 173 will be entered into between a vendor and the local council and
will be registered on the title following upon registration of the plan. The agreement may be for a limited
time only or may continue indefinitely. When acting for a purchaser, great care should be taken to
determine the implications of the agreement for the client. For further information, see Practice Paper
P304 Planning and Environmental Law Practice.
13.4 Sale of Land Act requirements

Certain additional requirements apply under SLA ss 9AA–9AH and 10A–10F to off-the-plan sales, as
set out below:
• Deposit: The contract of sale must provide that the deposit be paid to a lawyer, conveyancer or
licensed estate agent acting for the vendor to be held on trust for the purchaser until the
registration of the plan of subdivision: s 9AA(1)(a). The deposit must, in fact, be paid in this
manner: s 9AA(2). The contract must also provide that the deposit not exceed 10% of the purchase
price: s 9AA(1)(b). Failure to comply with these requirements entitles the purchaser to rescind the
contract at any time before the registration of the plan of subdivision.
• Notice: An “off-the-plan” contract for the sale of a lot must contain a “conspicuous” notice to the
consumer of the following (s 9AA(1A)):

– that the purchaser may negotiate with the vendor about the amount of the deposit, up to 10%
of the purchase price;
– that a substantial amount of time may elapse between the signing of the contract of sale and
the day on which the purchaser becomes the registered proprietor of the lot; and
– that the value of the lot may change between the day on which the purchaser signs the
contract of sale and the day on which the purchaser becomes the registered proprietor of the
lot.
If the notice is not given or is not conspicuous, the purchaser will not have a right to rescind
the contract: s 9AE. However, it is an offence for any person to sell land in contravention of the
provisions of the SLA: s 16.
• Owners corporation: If an owners corporation is created under the plan of subdivision, the vendor
must effect insurance in accordance with the OCA, as if the vendor were the owners corporation
until the end of 1 month after the owners corporation’s first meeting, or if it does not meet by the
end of 6 months after the plan is registered, at the end of 6 months: s 9AAA.
• Works to the land: The vendor must disclose in the contract of sale details of works affecting the
natural surface level of the land, or any adjoining land in the same subdivision, which to the
vendor’s knowledge have been carried out on the land after certification of the plan but before the
contract date, or are at the contract date being carried out or proposed to be carried out: s 9AB(1).
Where works are to be carried out or are proposed to be carried out after the date of contract but
before the registration of the plan of subdivision, the vendor must disclose (in writing) details of the
works to the purchaser as soon as practicable after the details come to the vendor’s knowledge:
s 9AB(2) and (3).
If any works have been or are being carried out at the direction of a local council or public authority
for which the vendor was required to submit plans for, the vendor must include copies of the plans
in the contract of sale or, if the works are carried out after the contract of sale is signed, at the time
of disclosing the works to the purchaser: s 9AB(4).
If the vendor does not comply with these requirements, the purchaser may rescind the contract at
any time before the registration of the plan of subdivision: s 9AE(1).
• Amendments to plan of subdivision: The vendor must notify the purchaser of any amendments to
the plan of subdivision before registration, that are requested by the vendor or required by the
Registrar of Titles, within 14 days of that request or requirement: s 9AC(1). The purchaser may
rescind the contract within 14 days of the vendor’s notice where the amendment will materially
affect the lot they are purchasing: s 9AC(2).
• Possession: The purchaser is not entitled to possession of the lot before registration of the plan
of subdivision: s 9AD(1). However, the purchaser may have reasonable access to the lot for any
purpose connected with the proposed development or use of the lot (s 9AD(3)), or if the purchaser
takes possession in consideration for the payment of an occupation fee (s 9AD(4)). Note the effect
of terms contract provisions in the SLA in these circumstances.
• Registration of plan of subdivision: If a plan of subdivision is not registered within 18 months after
the date of the contract (or if the contract specifies another period, before the end of that specified
period), the purchaser may, at any time after that period but before the plan is registered, rescind
the contract: s 9AE(2). This does not prevent the vendor from giving itself the right to rescind the
contract in this situation; it merely gives the purchaser a statutory right to rescind which the vendor
cannot remove in the contract.
• Discrepancy as to boundary: Where there is a substantial discrepancy between the actual
boundary of the lot and the boundary of the lot shown on the plan of subdivision, and not more
than 18 months have passed since the contract was entered into, the purchaser may avoid the
sale: s 9AH.

• Amendment restricting or limiting use: A purchaser may avoid the sale at any time before
registration of the plan, if any amendment to the plan is made after the contract is entered into that
restricts or limits the use of the lot, unless the amendment results from any recommendation of a
public authority or government department. However, the contract of sale may specify that the
purchaser’s right to avoid the contract does not apply in respect of the final location of an easement
shown on a certified plan: s 10.
• Sunset clause: A sunset clause may provide for the contract to be rescinded if the relevant plan
of subdivision has not been registered, or if the occupancy permit has not been issued by the
nominated sunset date. However, a vendor cannot rescind a residential off-the-plan contract
based on a sunset clause without at least 28 days’ written notice given to the purchaser, and the
purchaser’s consent: s 10B. For the definitions of “sunset clause” and “sunset date”, see s 2.
14 SALES OF NEW HOMES

14.1 Outline
Additional disclosure and contract requirements apply to the sale of a new home (being residential
premises) by a registered building practitioner or an owner-builder. An “owner-builder” refers to a
person who is the owner of land and carries out, manages or arranges the carrying out of building work
on that land but is not in the business of building. An owner-builder does not have a builder interposed
between them and the tradespeople who carry out the work.
14.2 Builders
Section 137B of the Building Act provides that a registered building practitioner (for example, builder)
who constructs and is selling a home must meet two requirements within the “prescribed period”:
• the builder must (SLA s 32B):
– have a building defects insurance policy in accordance with Domestic Building Insurance
Ministerial Order No S98;
– provide a copy of the certificate of currency for the policy before entry into the contract of sale;
and
– include information concerning this insurance in the vendor statement; and
• the builder must provide in the contract of sale the warranties set out under Building Act s 137C,
that:
– all building work was carried out in a proper and workmanlike manner;
– all materials used were good and suitable for the purpose and that, unless otherwise stated,
were new; and
– all works were carried out in accordance with all laws and legal requirements.
There are exemptions from the first requirement for some multi-storey residential developments.
The warranties run with the land so that any subsequent purchaser has the benefit of the warranties,
until the prescribed period ends.
A contract entered into in contravention of the above requirements is voidable at the purchaser’s option
at any time before settlement.
“Prescribed period” in relation to a contract for the sale of a home is defined in s 137B(7):
prescribed period means—
(a) in relation to a contract for the sale of a building on which domestic building work has been carried
out—

(i) 6 years and 6 months (or such longer period (not exceeding 10 years) as is prescribed) after the
completion date for the construction of the building; or
(ii) if neither an occupancy permit nor a certificate of final inspection is issued or required to be issued
in respect of the construction of the building—
(A) 7 years after the date of the issue of the building permit in respect of the construction of the
building; or
(B) if a building permit is not issued or required to be issued in respect of the construction of the
building, 6 years and 6 months after the certified date of commencement for the building;
and
(b) in relation to a contract for the sale of any other building—10 years after the completion date for the
construction of that building[.]
A vendor must also provide details of any building approval issued in the last 7 years in the vendor
statement.
14.3 Owner-builders
Under Building Act s 137B, an owner-builder selling a new home within the prescribed period must:
• provide the purchaser with a copy of a condition report by a prescribed building practitioner (being
an architect, engineer or building surveyor) that is not more than 6 months old, before entry into
the contract of sale;
• have a building defects insurance policy in accordance with Domestic Building Insurance
Ministerial Order No S98 and provide a copy of the certificate of currency for the policy before
entry into the contract of sale. There are exemptions from this requirement for multi-storey
residential developments. The information concerning this insurance must also be included in the
vendor statement: SLA s 32B; and
• provide in the contract of sale the warranties set out under Building Act s 137C. Again, these
warranties run with the land so that any subsequent purchaser has the benefit of the warranties,
until the prescribed period ends.
A contract entered into in contravention of the above requirements is voidable at the purchaser’s option
at any time before settlement: Building Act s 137B(3).
A vendor must also provide details of any building approval issued in the last 7 years in the vendor
statement.
14.4 On-selling
A vendor, who has bought a property that is the subject of a defects insurance policy must provide
details of the policy in the vendor statement where they sell within 6 years of the construction of the
home: SLA s 32B. The new purchaser will receive the benefit of the policy for the balance of the period
remaining on the policy.
A vendor, when on-selling, must disclose details of building approvals in the last 7 years in the vendor
statement: s 32E.
15 PRE-SELLING HOMES UNDER CONSTRUCTION

15.1 Outline
Some homes may be sold during the course of construction (that is, pre-sold), by either developers or
registered builders. Often the sale of a home under construction is an off-the-plan sale, and so the
requirements affecting off-the-plan sales as well as those described below, apply.

15.2 Developers
Where a developer pre-sells a home, they must have entered into a major domestic building contract
with a registered builder before entering into a contract of sale with the purchaser: Building Act s 137E.
A major domestic building contract is defined under the Domestic Building Contracts Act 1995 (Vic)
(DBCA) as a contract to carry out, or to arrange or manage the carrying out, of domestic building work
in which the contract price for the work is more than $16,000: DBCA s 3(1). Domestic building work
includes the construction of a home: DBCA ss 3(1) and 5(1)(a).
Major domestic building contracts must comply with a number of requirements under the DBCA,
including that:
• a builder must be registered before entering into a major domestic building contract; and
• statutory warranties are required to be included in the contract. These warranties are similar to
those contained in Building Act s 137C and run with the land.
Provided a developer has entered into a major domestic building contract, it will not be required to
comply with the requirements under Building Act s 137B to provide insurance particulars, condition
report or contractual warranties. This is because there is an exemption where a person pre-sells a
home and the home is constructed under a major domestic building contract: s 137E. The rationale
is that where there is a major domestic building contract, there will be a registered builder who will
have insurance. Warranties are included in the major domestic building contract under the DBCA
and run with the land. A condition report is not required as the building work is undertaken by a
registered builder.
Note that a contract of sale of land on which a home is being constructed will not be a domestic building
contract if the home is constructed under a separate major domestic building contract.
15.3 Builders
If the vendor is a registered builder, Building Act s 137E provides that they must ensure that, either:
• they enter into a separate major domestic building contract with the purchaser (or has in place a
major domestic building contract between the entity that owns the land and the entity registered
as a builder); or
• the contract of sale is a major domestic building contract.
15.4 Owner-builders
Owner-builders are not permitted to pre-sell a home under construction, because an owner-builder
must provide a condition report before entry into the contract, and this cannot be done until
completion of the home: Building Act s 137B. Section 137E will not exempt an owner-builder from
this requirement as the owner-builder will not have a separate major domestic building contract with
a registered builder.
15.5 Duty – off-the-plan sales

A reduction in the land transfer duty payable under the Duties Act 2000 (Vic) (Duties Act) is available
where a vendor pre-sells a home under construction and the purchaser is purchasing the property as
their principal place of residence. Duty is assessed online, using a Digital Duties Form available from
the SRO. Duty is assessed on the purchase price, less the deemed or actual cost of construction
remaining after the day of sale, calculated using either the fixed percentage method or the alternative
method. Detailed records are required, and the vendor has significant record keeping obligations.

16 SALES OF NEW COMMERCIAL BUILDINGS

16.1 Overview
A purchaser who purchases a new commercial building, either after completion or in the course of
completion, is not entitled to the consumer warranties and benefits that apply in the case of the
purchase of a new home.
16.2 Misleading or deceptive conduct

While there are not the same consumer benefits for the purchase of a new commercial building as for
the purchase of a new home, a purchaser of a commercial building may have remedies under the ACL
for any misleading or deceptive conduct by a vendor.
16.3 Duty
A reduction in duty is available to the purchaser where a vendor pre-sells a building under construction.
As in the case of a vendor pre-selling a home under construction, duty is assessed on the purchase
price, less the deemed or actual cost of construction remaining after the day of sale.
17 DEPOSIT
The deposit is a payment by a purchaser at the commencement of a transaction to indicate that the
purchaser proposes to complete the transaction. It is usually paid at the time that the contract is signed
by the purchaser and is usually 10% of the purchase price. The deposit can be provided instead by
deposit bond or guarantee, but there may be risks for both vendor and purchaser in this situation, as
the whole of the purchase price is then payable on settlement: standard contract GC 15 or GC 16.
Under SLA s 25, any deposit received from a purchaser must be paid, within 7 days of receipt:
• to a conveyancer, an estate agent or the vendor’s lawyer; or
• into a special purpose account in the joint names of the vendor and purchaser with an authorised
deposit-taking institution in Victoria nominated by the vendor.
A contract containing provisions in contravention of these requirements is voidable at the option of the
purchaser before settlement, unless the court is satisfied under SLA s 28 that:
• the vendor has acted honestly and reasonably and ought to be excused for the contravention; and
• the purchaser is substantially in as good a position as if all relevant provisions of the SLA had
been complied with.
In practice, the deposit is usually paid to the vendor’s estate agent at the time that the purchaser signs
the contract. However, different requirements apply where the land is sold off-the-plan.
Where a deposit is held by an estate agent, a conveyancer or a lawyer, then they are required to hold
the deposit until settlement or until the deposit is released under SLA s 27. Section 27 establishes a
procedure allowing release of the deposit to the vendor before settlement where:
• the contract is not subject to any condition enuring for the benefit of the purchaser: s 27(2)(a);
• the purchaser has accepted title or may be deemed to have accepted title: s 27(2)(b); and
• the vendor has given a s 27 statement and the purchaser has given written notice that it is satisfied
that the particulars in the s 27 statement are accurate and the purchase price is sufficient to
discharge all mortgages over the property. The purchaser normally gives such notice by signing
the s 27 statement: s 27(3)–(5).
The requirement in s 27(2)(a) is broadly drafted and could be interpreted to include conditions enuring
for the benefit of the purchaser right up to settlement, such as the vendor delivering the property in the

condition sold. However, in practice, it is treated as applying to a condition precedent, such as a finance
condition.
A purchaser has 28 days from receipt of the s 27 statement to object to the release of the deposit.
If the purchaser objects, they must give reasons: s 27(6). For example, a purchaser may:
• request independent confirmation of the particulars from the outgoing mortgagee before granting
the release;
• be concerned if the particulars reveal that the balance of the purchase money payable at
settlement will not be sufficient to discharge the mortgage; or
• if there is a contractual right to make requisitions, require satisfactory answers to its requisitions
before granting the release.
If the purchaser does not give notice of objection within 28 days of receipt of the s 27 statement, the
purchaser will be deemed to have given authorisation for the release of the deposit: s 27(7).
The deposit must be released to the vendor after 28 days if all conditions of the SLA have been satisfied
and the vendor provides proof, to the purchaser’s reasonable satisfaction, that there are no debts
secured against the property or, if there are, that the total amount does not exceed 80% of the sale
price: standard contract GC 14.3. Where a purchaser is deemed by SLA s 27(7) to have given deposit
release authorisation, the purchaser is also deemed to have accepted title unless there is express prior
objection: GC 14.6.
Where a vendor knowingly or recklessly supplies false information to the purchaser regarding any
information in the s 27 statement, the vendor will be guilty of an offence and the purchaser may rescind
the contract: SLA s 27(8).
In Aurumstone Pty Ltd v Yarra Bank Developments Pty Ltd [2017] VSC 503, the Supreme Court of
Victoria decided that a purchaser may have sufficient grounds for an objection if a contingent condition,
such as finance approval or a promissory estoppel, is unsatisfied. The position as to early release of a
deposit under s 27 requires further clarification.
See Appendix 3 for an example of a s 27 statement. Although the form of that statement provides for
the vendor and purchaser to sign the statement, this is not required under SLA Sch 1. However, it is
recommended that this be done, as it will then constitute authorisation from the purchaser for release
of the deposit.
18 ACTING FOR THE VENDOR

18.1 Outline
On receiving instructions to act on the sale, you will need to:
• comply with the costs disclosure and costs agreement requirements of the LPUL;
• write to the vendor advising the steps in the transaction; and
• undertake a VOI process by carrying out reasonable steps to identify the vendor client.
18.2 Preliminary enquiries

The following preliminary enquiries should be undertaken before your client sells the property,
especially if it is a commercial property:
• Where the property is being sold subject to a lease or leases:
– check whether any lease contains any restriction on the vendor selling the property; and
– review each lease to check if there are any restrictions on the vendor disclosing the lease to
a third party. If so, the vendor will need to comply with the requirements in those provisions
before providing a prospective purchaser with a copy of that lease.

• Check whether any other documents being disclosed to a purchaser contain confidentiality
provisions. If so, the vendor will need to comply with the requirements in those provisions before
providing a prospective purchaser with a copy of those documents.
• Check whether the property includes a disclosure-affected building under the Building Energy
Efficiency Disclosure Act 2010 (Cth), as it may apply to any leases as well as to the sale.
18.3 Material facts

It is an offence for a vendor (or an estate agent) to knowingly conceal a material fact about land for
sale, with the intention of inducing a potential purchaser to buy the land: SLA s 12(d).
A material fact is a fact that would be important to a potential purchaser in deciding whether to buy any
land. In the context of a proposed sale of land, a material fact is one that influences a purchaser in
deciding whether to buy any land at all or to buy land only at a certain price: see Consumer Affairs
Victoria, Material Fact Guidelines, which are for all vendors and their agents when selling land.
A fact can be “material” in one of two ways:
• generally – a fact that an average, reasonably informed purchaser with a fair-minded
understanding of the property market, including the role of an estate agent, would generally regard
as material in their decision to buy land; or
• specifically – if a fact about land is known by the vendor (or the vendor’s agent, including an estate
agent) to be important to a specific purchaser, it can be material, even if other agents and
consumers would not generally consider that fact to be important or of significance to them. This
knowledge could arise, for example:
– if a particular purchaser asks a specific question about the land of the vendor or the vendor’s
agent (including their estate agent);
– where a purchaser informs the vendor/agent of their intended use of the land; and/or
– where the vendor must disclose material facts to the purchaser before the signing of the
contract of sale.
18.4 Due diligence

Usually the purchaser of a commercial property will undertake some form of due diligence in relation
to the property. You will need to assist your vendor client with making full disclosure of relevant
documents to the purchaser, including the provision of copies of all current leases, service agreements,
licences or other agreements pertaining to the property. Where any disclosed documents contain any
commercially sensitive or confidential information, you should advise your client that the purchaser
enter into a confidentiality agreement before the purchaser sights these documents.
If there is to be a data room, you may be required to prepare data room conditions.
You may also need to assist your client with requests from the purchaser for further information
concerning any information contained in or missing from the data room or disclosed during the due
diligence process.
If the client is selling vacant residential land or land on which there is a residence, you should advise
the client that the estate agent (or vendor where there is no estate agent) is required to provide to a
purchaser a due diligence checklist from the time the land is offered for sale. In practice, the vendor’s
representative will usually attach a due diligence checklist to the signed vendor statement to be
provided to the purchaser. A copy of the due diligence checklist can be found on the Consumer Affairs
Victoria website.

18.5 Tenders
If your client is selling the property by expression of interest or tender, you will usually be required to
prepare the request for tender.
The following issues should be addressed in the request for tender:
• the form that each tender is to take;
• the final date and time by which tenders must be submitted;
• the place and method of lodgment of the tender;
• whether the tenderer must pay a deposit at the time it submits the tender, as an assurance of
good faith. If the tender is accepted, then the deposit will usually form part of the deposit under
the contract of sale. If the tenderer is unsuccessful, the deposit is usually returned to the
tenderer;
• the terms and conditions to which the successful tenderer will become bound. Usually the request
for tender will contain the form of the vendor’s preferred contract of sale, and will state that the
tenderer must sign the contract of sale and provide it to the vendor with the tender;
• the criteria by which a vendor will evaluate the tenders received;
• whether the vendor has any obligation to accept any tender. Usually the request for tender will
provide that the vendor has no such obligation;
• whether the vendor is obliged or has a discretionary right to consider non-conforming tenders;
• whether a tenderer can withdraw its tender. Usually the request for tender will provide that a
tenderer cannot withdraw its tender within a specified period after it submits its tender;
• the method of acceptance of a tender by the vendor;
• whether the vendor has any obligation to comply with its tender rules. Usually the request for
tender will provide that there is no such obligation, and no such obligation is to be implied; and
• the method and time for the vendor to notify tenderers if they have been unsuccessful.
Generally the vendor provides the interested parties with a vendor statement signed by the vendor
(in duplicate) when the vendor provides them with a request for tender. This must be done where a
tenderer is requested to sign a contract of sale when submitting the tender.
18.6 Vendor statement

Once you receive instructions, you will need to prepare the vendor statement. You should undertake
the following enquires and obtain the following certificates:
• title search;
• planning certificate issued by LANDATA (a business of LUV) or by the local council;
• land information certificate from the local council;
• fire services property levy from the local council;
• water rates and encumbrances information statement from the local water authority;
• building permit information from the local council;
• certificate from VicRoads;
• land tax clearance certificate from the SRO;
• extract from EPA Priority Sites Register;
• owners corporation certificate (if applicable);
• heritage certificate (if appropriate);
• Aboriginal Heritage Register certificate (if appropriate);
• GAIC certificate;

• bushfire prone area report; and

• any emergency order, building notice or building order relating to combustible cladding.
affected, you should also obtain the relevant NABERS or BEEC.
You should let your client know beforehand that you will be undertaking searches and the costs
involved.
You should also obtain detailed instructions from the client regarding the property and the sale, such
as by sending the client a questionnaire to complete. See Appendix 2 for examples in relation to
residential and commercial properties.
Once you have prepared a draft vendor statement, you should submit it to your client for review and
approval and advise your client of the consequences under the SLA of supplying false information or
failing to supply all required information. After your client has approved the vendor statement, your
client should sign it. This can be done electronically: s 32(2).
18.7 Title search

Immediately after you receive instructions from a client, you should obtain a copy of the Register
Search Statement. To order the search you can enter the unique volume and folio number used to
identify the title. Alternatively, you can use the address or a lot/plan reference or the owner’s name to
initiate a search.
The Registrar of Titles is responsible for managing land titles in Victoria. Land Use Victoria is the key
agency responsible for land administration, land information and registration of land titles under the
Torrens system, general law titles and the status of Crown land. Searches are made online through
LANDATA or through a broker. Land Information produces a certificate of title containing an extract of
the information on a folio as at the date of production. The certificate of title is held by the vendor (or
the mortgagee, where there is a mortgage over the property) for safekeeping and returned to LUV the
next time a dealing is lodged for registration.
A search of title provides:
• a copy of any relevant instrument (for example, a transfer of land creating a covenant or a creation
of easement); and
• a computer search statement (called a Register Search Statement) and copy of the relevant plan,
containing:
– the volume and folio reference;
– the registered owner’s full name and the manner of holding (sole owner, joint tenants or
tenants in common);
– a description of the land (lot and plan numbers);
– registered encumbrances affecting the land (such as mortgages, restrictive covenants and
easements);
– any GAIC recording affecting the land;
– any forest carbon rights, or registered Forest and Carbon Management Agreement affecting
the land;
– an outline of the survey plan of the land;
– the street address of the property;
– dealing activity in the previous 125 days showing dealings (for example, transfers, mortgages
or caveats) affecting the title that have been registered in that time or have been lodged but
are not yet registered;
– a warning if other folios have an interest in the land;

– advice as to whether the folio is affected by an owners corporation; and

– for e-Conveyancing – advice as to whether an administrative notice has been lodged that
affects the folio.
18.8 Contract of sale

The vendor’s representative is required to draft the contract of sale with appropriate special conditions.
The general conditions in the standard contract are often sufficient for the sale of residential property,
but you will need to add specific special conditions to address any unique aspects of a commercial
transaction.
Special conditions that often apply to the sale of commercial property include those dealing with:
• the investment of the deposit;
• the disclosure of any documents and exclusion of the vendor’s liability for issues arising under
those documents;
• environmental matters;
• the condition and value of any plant and equipment included in the sale;
• the exclusion of any goods or fixtures not included in the sale and specifying who will be
responsible for removing and making good any damage caused by the removal of those goods or
fixtures;
• if the sale is subject to a lease or leases, the lease or leases;
• if there are service agreements in relation to the property, the agreements;
• if the purchaser is or may be a foreign person, Foreign Investment Review Board (FIRB) approval;
• the purchaser’s admission that the property was purchased as a result of its own enquiries and is
not relying on any representation by the vendor (other than the vendor warranties in GC 6) or the
estate agent and that all the terms of the contract are set out in the contract;
• an increase of the penalty interest rate under GC 33; and
• the damages that the vendor can claim from the purchaser if the purchaser breaches the contract
in addition to GCs 32 and 35.
Where there is an off-the-plan sale, additional special conditions will be required.
Following the preparation of a draft contract, you should submit it to your client for review and approval.
Once approved, you should send at least two copies of the contract (with the annexed signed vendor
statement) and two signed vendor statements to the estate agent (if there is one).
There are different processes applicable to signing the contract depending on the nature of the sale:
• If sold privately, the estate agent will take the vendor statement (in duplicate) and the contract
(in duplicate) to the purchaser for signing, and then take the contract to the vendor for
countersigning.
• If sold at auction, the purchaser will sign the vendor statement (in duplicate) and the contract
(in duplicate) immediately after the auction, and then the vendor will countersign the contract.
• If sold by tender, the vendor statement (in duplicate) and contract (in duplicate) will normally be
attached to each request for tender.
The contract may be signed electronically: standard contract GC 1. “Electronic signature” is defined in
the standard contract as a digital signature or a visual representation of a person’s handwritten
signature, placed on a physical or electronic copy of the standard contract by electronic means. Where
the contract is electronically signed by or on behalf of a party, the party warrants and agrees that the
signature identifies the party and indicates that they intend to be bound by the signature: GC 1.3. The
contract may be electronically signed in any number or counterparts which together constitute one
document, and the exchange of such counterparts by email or other electronic means may be agreed

in writing: GCs 1.4 and 1.5. Each party must, upon request, promptly deliver a physical signed
counterpart of the contract: GC 1.6. Failure to comply with this request does not affect the validity of
the contract.
If a purchaser requests amendments to a contract of sale, these must be referred to your client for
instructions.
It is important that the estate agent ensures the purchaser signs the vendor statement before the
purchaser signs the contract, to comply with SLA s 32.
Once the documents have been signed, each party should receive one original contract signed by
each, and one original vendor statement signed by each. You should request a copy of the signed
contract from your client or the estate agent, and check it has been properly completed and executed.
Where the purchaser is required to provide a third-party guarantee, you should ensure the guarantee
(that may be annexed to the contract) has been completed and signed properly.
A licensed estate agent acting for the vendor must ensure that the due diligence checklist is made
available to any prospective purchaser from the time the land is offered for sale. The due diligence
checklist must be in the form approved by the Director of Consumer Affairs: SLA s 33.
18.9 Goods and services tax

You should consider whether the sale of the property will be subject to GST. If so, it is important to
check the relevant box in the standard contract so that the provisions of GC 19 apply and the client
can recover GST. If the particulars of sale do not contain the words “plus GST” and there is no GST
recovery clause in a special condition, the purchase price will be taken to include any GST and the
vendor will not be entitled to recover GST from the purchaser. The sale of residential premises that are
not new is input taxed and not liable to GST.
GST applies to the sale of commercial and commercial residential premises and the sale of new
residential premises or potential residential land where the characteristics of a “taxable supply” are
satisfied. To be a taxable supply there must be a supply for consideration in the course or furtherance
of an enterprise carried out by the supplier that is connected with Australia and the supplier is registered
or required to be registered for GST; however the supply is not a taxable supply to the extent it is
GST free or input taxed: A New Tax System (Goods and Services Tax) Act 1999 (Cth) s 9-5. Where
GST applies, in certain circumstances the vendor may apply the margin scheme, but only if the “margin
scheme” box is ticked in the particulars of sale. See Practice Paper T103 Goods and Services Tax for
further information.
18.10 GST withholding

Purchasers of new residential premises or potential residential land are required to withhold GST from
the purchase price at settlement. The GST withholding amount (ordinarily 1/11th of the contract price
unless the margin scheme applies) may be deducted from the balance of the purchase price due to
the vendor at settlement. The purchaser is responsible for paying to the Commissioner of Taxation the
GST withholding amount under GC 25.7 of the standard contract as well as paying any penalties or
interest on account of non-payment or late payment under GC 25.1.
Payment may be made through an ELN or the purchaser may provide to the vendor a bank cheque
payable to the Commissioner at settlement under GC 25.9. However, as the purchaser is liable to pay
the GST withholding amount if the vendor fails to do so, it is recommended that payment be made
directly to the Commissioner.
The standard contract contains vendor warranties regarding the GST withholding notice which the
vendor must provide to the purchaser before making a supply under Taxation Administration Act
1953 (Cth) s 14-255.

The time for giving the GST withholding notice is fixed to at least 14 days before the due date of
settlement: GC 25.3. The vendor must provide all information the purchaser requires to confirm the
accuracy of the notice. General condition 25.10 reinforces the parties’ duty to reasonably co-operate
in order to complete the transaction. Notably, a party must provide the other party with information the
other party requires to decide if an amount is required to be paid or to comply with the purchaser’s
obligation to pay the amount in accordance with Taxation Administration Act 1953 (Cth) s 14-250. See
Appendix 4 for an example of a GST withholding notice.
18.11 Foreign resident capital gains withholding regime

The FRCGW regime is designed to collect capital gains tax from foreign residents where the sale price
of a property exceeds $750,000. Vendors must provide a FRCGW clearance certificate, whether or not
they are a foreign resident. If the vendor does not provide the clearance certificate, they will be deemed
be a foreign resident and the purchaser’s lawyer will be required to withhold 12.5% of the contract price
at settlement and remit the funds to the ATO.
See Practice Paper T102 Capital Gains Tax for further information on capital gains tax.
18.12 Windfall gains tax

From 1 July 2023, land that is subject to rezoning resulting in a value uplift to the land of more than
$100,000 will, with some exemptions, be subject to the new windfall gains tax (WGT) under the Windfall
Gains Tax and State Taxation and Other Acts Further Amendment Act 2021 (Vic). The tax relates to
contracts entered into after 15 May 2021 and commercial decisions made now. The landowner at the
date of rezoning is liable to pay the tax. Windfall gains tax is applied to the “value uplift”, that is, the
increase in the land’s capital improved value resulting from the rezoning. The tax applies at a rate of
62.5% on an uplift of more than $100,000 but less than $500,000 and will apply at 50% to the total
uplift for uplifts greater than $500,000. Liability to pay WGT is incurred when the rezoning occurs but
can be deferred (with interest) for up to 30 years. Lawyers must advise clients involved in transactions
that WGT provisions may apply to that dutiable transactions may end the deferral of payment of WGT,
notably the sale of land.
18.13 Deposit
In matters where you are not holding the deposit in your practice’s trust account, confirm that the
purchaser has paid the deposit to the vendor’s estate agent.
If no condition is enuring for the benefit of the purchaser, as the vendor’s representative you should
send a signed s 27 statement (deposit release statement) to the purchaser’s representative as soon
as possible after the contract is signed. To complete the s 27 statement, you need to write to the
vendor’s mortgagee to request the information required as early as possible once you receive
instructions to act on the sale. Once you complete the statement based on the information provided by
the vendor’s mortgagee, you should submit it to your client for signing and return to you, and then send
it to the purchaser’s representative.
If the purchaser does not object to the particulars contained in the s 27 statement within 28 days of receipt
of the statement, the deposit may be released to the vendor. It is prudent for the vendor’s lawyer to write
to the purchaser’s lawyer just before the end of the 28-day period (if the vendor’s lawyer has not received
the signed s 27 statement back by then) about the return of the statement and release of the deposit.
Once you receive the signed s 27 statement (or the deposit is deemed to be released), if you are
holding the deposit you should release it to the client. If an estate agent is holding the deposit, you
should send a copy of the signed s 27 statement to the estate agent, who will then release the deposit
to the client, subject to the deduction of any commission and other costs due to them. An estate agent
may retain the commission and any auction expenses they are entitled to from the deposit: SLA s 27(9).

18.14 Foreign Investment Review Board

There are general prohibitions on foreign persons buying Australian real estate without approval from
the FIRB under the Foreign Acquisitions and Takeovers Act 1975 (Cth). However, it is permissible for
a foreign person to enter into a contract that is conditional following FIRB approval. If there is any
chance that a foreign person may seek to purchase a vendor’s property, a vendor’s lawyer will often
include relevant special conditions in the contract.
18.15 Service agreements

Where the property is being sold subject to service agreements with a term extending beyond
settlement, you should review each agreement to check whether the vendor is entitled to terminate,
assign or novate those agreements. You should then advise the vendor of the best approach to take
in relation to those agreements.
Normally, the contract of sale will also contain a special condition addressing the following:
• which service agreements (if any) will be terminated before settlement;
• whether the vendor will be assigning or novating any service agreements that the vendor will not
be terminating before settlement (or if neither is possible, whether the vendor will hold their interest
under the agreement on trust for the purchaser); and
• the obligations of the respective parties concerning compliance with the service agreements, and
possibly also an indemnity from the purchaser to the vendor for losses arising from the purchaser’s
failure to comply with the service agreements.
18.16 Off-the-plan sales

When acting for a vendor selling land off-the-plan, you should:
• advise your client of their obligations under the SLA;
• consider using Law Institute of Victoria, Sale of Property Off the Plan – Additional Contract
Provisions (2023);
• ensure the contract of sale contains a special condition addressing the requirements under the
SLA in relation to the disclosure of works affecting the natural surface level of the lot or adjoining
land in the subdivision;
• ensure that your client effects appropriate insurance cover for any owners corporation created by
the plan;
• ensure that a residential off-the-plan contract contains a specific statement about the client’s right
to terminate under a sunset clause;
• consider including the following additional special conditions in the contract of sale:
– a right for the vendor to vary the plan before registration (however, if the variation is material,
the purchaser may avoid the contract);
– a provision that the purchaser’s right to avoid the contract for an amendment to the plan
restricting or limiting their use of a lot does not apply in respect of the final location of an
easement shown on the certified plan;
– provisions addressing the method of adjustment of rates, particularly where a separate
assessment has not yet been completed by the rating authorities;
– a prohibition on the purchaser lodging a caveat before registration of the plan. The lot being
purchased will not yet have a separate title and a caveat affecting the parent title may delay
registration of the plan of subdivision; and
– rights of entry by the vendor to complete the subdivision after settlement (if necessary);

• where the vendor is a builder, ensure they comply with the requirements in the SLA and Building
Act, including:
– providing the required warranties in the contract of sale;
– attaching a copy of the certificate of currency for the builder’s defects insurance policy to the
vendor statement; and
– disclosing building permits issued in the last 7 years in the vendor statement;
• where the vendor is an owner-builder, ensure they comply with the requirements in the SLA and
Building Act, including:
– providing the required warranties in the contract of sale;
– attaching a copy of the certificate of currency for the owner-builder’s defects insurance policy
and the condition report to the vendor statement; and
– disclosing building permits issued in the last 7 years in the vendor statement;
• where the sale involves a home under construction, ensure that:
– where the vendor is a developer, they have entered into a major domestic building contract
with a registered builder;
– where the vendor is a registered builder, there is a separate major domestic building contract
in relation to the construction of the home, or the contract of sale constitutes the major
domestic building contract;
– the contract of sale includes flexibility in relation to the completion of the works and variations
to the works; and
– the contract of sale includes access rights for works to adjoining lots; and
• where the off-the-plan sale involves the construction of a building or a new building other than a
home, ensure the contract of sale includes flexibility in relation to the completion of the works and
variations to the works and access rights for works to adjoining lots.
18.17 Vacant possession or tenancy

If the property is sold subject to a tenancy or tenancies then the “subject to lease” check box must be
ticked. Details of the lease should also be included in the particulars of sale.
You should undertake preliminary enquiries concerning the leases. You should also check whether
any lease requires the tenant to provide any security (such as a bank guarantee or security deposit)
and if so, confirm with the client whether they are holding the security and its amount.
You should attach a copy of the lease to the contract of sale.
You will also need to consider including special conditions in the contract to deal with the following
issues concerning the lease:
• exclusion from the sale of any tenants’ property;
• admission by the purchaser that the purchaser made their own enquiries in relation to the lease
or leases;
• the vendor’s rights and obligations in relation to the lease or leases until settlement;
• the purchaser’s rights and obligations in relation to the lease or leases from settlement and
appropriate indemnities (if applicable);
• if appropriate, limitations on the vendor’s liability in relation to matters under the lease or leases;
• the vendor’s responsibilities in relation to the preparation and delivery of notices of attornment,
the delivery of the original leases and the assignment and/or delivery of any lease security; and
• adjustment of tenancy payments.

If there is no lease, you should advise your client of their obligation to provide vacant possession on
the settlement date.
18.18 Outgoing mortgagee

You should write to the vendor’s mortgagee advising them of the sale and the settlement date,
providing them with your client’s written consent to the release of information (if you have not already),
attaching a completed discharge authority signed by your purchaser client (if not completed online)
and requesting the payout figure for settlement. The mortgagee will need sufficient time to prepare all
relevant documentation required for settlement, for example, a discharge of mortgage or release of
any security interest over the property.
19 ACTING FOR THE PURCHASER

19.1 Outline
Once you receive instructions to act on the purchase you will need to:
• comply with the costs disclosure and costs agreement requirements under the LPUL;
• undertake a VOI process for your purchaser client; and
• write to the purchaser advising as to the steps in the transaction.
Where your client has the benefit of the cooling-off period, you should also explain to them their rights
during this period.
19.2 Defects
There are two types of defects that may affect a property:
• defects relating to title, which will be either:
– patent – meaning the defect is capable of discovery by inspection of the property or the title
(for example, if the property encroaches on adjoining land); or
– latent – meaning a defect that cannot be discovered by a reasonable inspection of the
property or the title (for example, an unregistered easement); and
• defects relating to the quality of the property.
Patent title defects

A purchaser will generally have no claim against a vendor in relation to patent title defects. Interests
registered on title can be identified by undertaking a title search.
You should also advise your client to undertake a physical inspection of the property to check that the
measurements of the property accord with those in the certificate of title, by checking:
• the dimensions of the property on the ground; and
• that the distance between the connecting point (the nearest street corner or some other permanent
starting point) and the start of the property shown on the title plan is the same as the distance on
the ground.
A purchaser has no right to make any objection or claim for compensation from the vendor if there
is a discrepancy between the dimensions of the property on the title and the actual dimensions of
the property: standard contract GC 7. However, a purchaser may be entitled to avoid the contract
under general equitable principles if the error in description as compared to the property actually
occupied by the vendor is so materially significant as to alter the nature of the property sold. In some
circumstances, a purchaser may also have a claim under the ACL if the vendor has engaged in
misleading or deceptive conduct.

Latent title defects

At common law a vendor must disclose latent title defects. This obligation formed the basis of the
disclosure obligations under SLA s 32.
A purchaser may have a claim against a vendor in relation to latent title defects if they are not disclosed
in the vendor statement. A purchaser may also have a claim under the ACL if the vendor has engaged
in misleading or deceptive conduct.
Defects relating to quality

The vendor statement does not address defects relating to the quality of the property. However, note
the material facts provisions inserted in SLA s 12.
In the absence of agreement between the parties, or of misrepresentation or fraud on the part of the
vendor, the vendor is not liable for defects in quality. The basic rule that applies is “buyer beware”
(caveat emptor). Once the purchaser has signed an unconditional contract, the vendor is only obliged
to deliver the property in the condition in which it was sold (with all defects that existed at that time).
It is rare for a residential contract to contain warranties by the vendor in relation to quality, and it is
generally difficult for a purchaser to establish misrepresentation or fraud.
Claims may arise in the context of a sale of a commercial building. In the case of misrepresentation, a
purchaser may have additional claims and remedies under the ACL, which prohibit a supplier from
engaging in conduct that is misleading or deceptive in trade or commerce.
The purchaser’s representative will usually order property certificate searches after the contract is
signed, but these statutory enquiries will generally not identify defects relating to quality.
It is important that where your client comes to you before they purchase the property, you advise your
client to inspect the property closely, and suggest they consider:
• engaging a building inspector, surveyor or architect to provide a condition report before your client
enters into the contract; or
• negotiating with the vendor that the contract be conditional on the receipt of such a report within
a stated time, and that the report does not identify material defects.
19.3 Due diligence

Usually a purchaser will undertake a due diligence of a commercial property, which helps to overcome
difficulties the purchaser may otherwise face under the doctrine of caveat emptor. You will normally
assist with this process by reviewing all legal documents disclosed by the vendor to the purchaser, and
identifying any issues of concern, usually by providing a due diligence report.
Where a property is being sold subject to a lease, you should review the terms of each lease and
identify any risks or liabilities arising under each lease that may affect your client if they purchase the
property. It is common for a purchaser’s lawyer to prepare a lease review form in relation to each lease,
to assist in the review and to attach it to the due diligence report to help the purchaser identify the key
terms of the lease. An example of such a form is contained in Appendix 5.
You should also review the service agreements applying to the property and prepare a review form in
relation to each agreement. See Appendix 6 for an example of a service agreement review form.
You may need to prepare other appropriate forms to assist with the review of other documents
disclosed.
The purchaser may engage financial advisers to consider financial and taxation issues pertaining to
the property. The purchaser may also engage consultants to investigate the property and prepare
appropriate reports on the property, such as a building report, planning report, survey of the land and
valuation. Where the vendor already has reports on these issues, the purchaser may seek to have the

vendor assign the benefit of those reports to the purchaser. Where there are no such reports, you may
recommend that your purchaser client obtain them, particularly where the due diligence identifies
possible risks in these areas.
If the purchaser is purchasing vacant residential land or land on which there is a residence, the estate
agent (or vendor where there is no estate agent) should provide the purchaser with a due diligence
checklist from the time the land is offered for sale. The purchaser has no rights where the due diligence
checklist is not provided, but a fine may be imposed.
19.4 Property enquiries

It is common to undertake the enquiries and/or obtain the property information certificates necessary
for preparing the vendor statement as part of the due diligence process.
Additional searches may be required, depending on the type and location of the property or if you are
aware of any specific issues relating to the property.
Title search
You should perform a new title search (Register Search Statement):
• to confirm the vendor is the registered owner (unless there is other evidence of the vendor’s power
to sell the property);
• for any easements or other restrictions affecting the property and the terms of those easements
or restrictions, and advise the client accordingly;
• for any mortgages and caveats affecting the property, which will need to be released at or before
settlement;
• for any GAIC recording – the transfer cannot be registered until the GAIC has been paid.
• for any forest carbon rights, or registered Forest and Carbon Management Agreement;
• for any other folios that have an interest in the land; and
• for any owners corporation that affects the land.
You should send a copy of the title search to the client and request confirmation that the title relates to
the property they intend to acquire. You should also advise the purchaser to check that the
measurements and boundaries on the plan reflect the actual measurements and boundaries of the
property.
It is possible to subscribe to the LANDATA Property Transaction Alert Service in respect of the title.
PEXA also runs a TAC with LUV which notifies workspace subscribers by email of any new activity on
title. It is prudent practice and good risk management to seek instructions from your client to lodge a
caveat.
Company search
Where the vendor is a company, you should carry out a company search with the Australian Securities
and Investments Commission to confirm the vendor is a registered company.
Security interest
As it is the purchaser’s obligation to notify the vendor of these interests requiring release, you should
search the PPSR for any such registered interests: GC 11.
Planning certificate
The planning certificate will provide you with information concerning the planning scheme, zones
and overlays, reservations and proposals applying to the property. However, you will need to check
the applicable planning scheme to confirm that the current use of the property complies with the

scheme. If a permit is required for the current use, you should check that one has been issued. If the
client intends to change the use of the property or redevelop the property, you must advise them of
the requirements under the planning scheme in relation to that change of use or redevelopment.
Land information certificate

The land information certificate will provide you with the following information:
• the valuation of the property;
• the rates and charges for the applicable year;
• outstanding or potential liability for certain costs and other money;
• any orders and notices made under the Local Government Act 1989 (Vic) or a local law of the
council;
• the flood level (if any) specified by the council; and
• fire services property levy made under the Fire Services Property Levy Act 2012 (Vic).
Water information statement

The water rates and encumbrances certificate will provide you with the following information:
• the rates and charges (for example, for sewerage, drainage, parks) in respect of the property
including any outstanding amounts;
• any encumbrances that would not be disclosed by a title search; and
• any works required to be carried out and any notices, resolutions or agreements.
Property services plan

The property services plan will identify water, sewerage and drainage service connections to the
property and associated easements.
Building regulation statement

The building regulation statement will provide you with information concerning building permits,
certificates of final inspection and occupancy permits issued in the preceding 10 years and any current
notices under the Building Act.
You should check that either certificates of final inspection or an occupancy permit have issued in
respect of each building permit or confirm that they were not required. You should also advise your
client if the certificate discloses any notices under the Building Act and the consequences.
Certificate from VicRoads

The certificate from VicRoads will alert you to whether there is any approved proposal by VicRoads
requiring any part of the property.
Bushfire prone area report

A bushfire prone area report will alert you to whether the property is in a bushfire prone area within the
meaning of regulations made under the Building Act.
Land tax clearance certificate

The land tax clearance certificate will identify the unimproved value of the land for the current year and
the land tax (if any) assessed on the land. This will be relevant for the purposes of adjustments.

Certificate from Heritage Victoria

The certificate from Heritage Victoria will identify if:
• the property is included in or is being considered for inclusion in the Heritage Register or there is
a current application for the inclusion of the property in the Heritage Register;
• the property is included in the Heritage Inventory as a place of potential archaeological
significance;
• the property is included in the World Heritage Environs Area;
• there is an interim protection order in force in respect of the property;
• there is a repair order for the carrying out of works in force in respect of the property; or
• there is an order of the Supreme Court in force to remedy or restrain a breach of the Heritage Act
1995 (Vic).
If you believe that the property may have any heritage significance, you must advise your client
accordingly.
Certificate from the Environment Protection Authority

A certificate issued by the EPA will identify whether the property is listed on the EPA Priority
(Contaminated) Sites Register. However, note that the register only lists sites for which the EPA has
conclusive evidence that soil contamination presents a risk to human health or the environment, and
so the fact that the property is not listed on the Register is not evidence that the property is free from
contamination. If there is any concern that the property may be contaminated, you should advise your
client to engage an environmental consultant to undertake an investigation of the property.
Aboriginal Cultural Heritage Register Certificate

The Victorian Aboriginal Cultural Heritage Register holds information about:
• cultural heritage permits;
• approved cultural heritage management plans;
• cultural heritage audits and stop orders;
• declarations; and
• cultural heritage agreements.
As the Register contains culturally sensitive information, access is limited. Further information is
available under the Aboriginal Affairs section on the Victoria Department of Premier and Cabinet
website.
Owners corporation certificate

The information that must be provided in an owners corporation certificate for each owners corporation
(if any) affecting the property is extensive and is prescribed in OCA s 151(4)(a) and OCR reg 11. The
vendor must attach a copy of the current owners corporation certificate to the vendor statement:
SLA s 32F(1)(a)(i)(B). The certificate must be accompanied by the documents prescribed under OCA
s 151(4)(b), including the statement prescribed under OCR reg 12: SLA s 32F(1)(a)(ii). The form of
statement, the Statement of Advice and Information for Prospective Purchasers and Lot Owners, is
OCR Sch 3.
If the owners corporation is inactive, this must be specified in the vendor statement: SLA s 32F(1)(b).
GAIC certificate
If a GAIC liability applies to the land, the Registrar of Titles will record the liability on the land register.
The SRO is responsible for collecting GAIC and for issuing relevant certificates and notices, pursuant

to the Taxation Administration Act 1997 (Vic). The SRO may issue a GAIC Certificate that will show
the amount of GAIC due and unpaid, deferred GAIC or the potential amount of GAIC, as at the time
the certificate issued.
Other forms of certificates include Certificate of no GAIC liability, Certificate of Exemption, Certificate
of Deferral, Certificate of Staged Payment Approval, and Certificate of Release. Where there is a GAIC
recording for land, certain certificates or notices must be attached to the vendor statement: SLA
s 32G(2). For further information, see the GAIC section of the State Revenue Office website.
Building Energy Efficiency Certificate

affected, after the transition period has concluded you should also apply for a BEEC.
19.5 Tenders
Where a vendor is selling a property by tender, you may be asked by your client to review the request for
tender and assist with the compilation of a tender. You should ensure the client understands the tender
conditions and complies with those conditions (unless your client decides to lodge a non-conforming
tender). If the request for tender requires tenderers to sign a contract of sale upon the submission of a
tender, you should review the vendor statement and contract of sale and draw any issues of concern to
your client’s attention. If your client decides to lodge a non-conforming tender, advise your client of any
vendor’s obligations to consider a non-conforming tender under the tender conditions.
19.6 Vendor statement

You should carefully review the vendor statement and explain to your client any issues of concern, as
well as undertake a current title search.
If the vendor statement includes current certificates, the purchaser can rely on the information in the
certificates. However, the vendor may have simply completed the statement from their own knowledge
and records, without attaching certificates. In these instances, to ensure that this information is correct
and to supplement the vendor’s information and certificates, you should recommend to the client that you
obtain appropriate certificates and advise them of the costs involved with obtaining these certificates.
Where appropriate, you should also recommend that either you or your client make enquiries of the
local council concerning any planning or building issues in respect of the property. For example:
• if the purchaser is intending to renovate the property, they will need to consider what planning and
building restrictions may apply; or
• if there have been works to the property in the last 7 years, the permits and certificates of final
inspection for those works should be checked.
19.7 Contract of sale

Carefully review the contract of sale and draw any issues of concern to your client’s attention. Where
there is an opportunity to negotiate changes to the contract, you should recommend to your client any
changes to any unacceptable conditions in the contract or the inclusion of any appropriate additional
special conditions.
A purchaser of a residential property may have the benefit of a cooling-off period under the contract,
but a purchaser of a commercial property will not.
You should confirm whether the vendor is a foreign resident and if the FRCGW provisions apply.
If the vendor is a foreign resident, the property is valued at $750,000 or more and the transaction is not
an excluded one under Taxation Administration Act 1953 (Cth) Sch 1 s 14-215(1), then the purchaser is

required to withhold 12.5% of the purchase price and pay it to the ATO on account of the vendor’s capital
gains tax obligations.
Where the vendor is not a foreign resident and the contract price for the property exceeds $750,000,
a clearance certificate should be provided by the vendor to the purchaser’s lawyer to avoid the
application of the withholding regime as all vendors are deemed to be foreign residents unless they
can prove otherwise.
19.8 Owners corporation

If the property is a lot on a plan of subdivision with an owners corporation or corporations affecting the
land, you must advise your client of:
• the lot entitlement and liability applying to the lot;
• the location of the common property;
• any owners corporation charges; and
• the owners corporation rules.
This information is usually obtained from the plan of subdivision and the basic search report, as well
as from the owners corporation certificate in the vendor statement. Basic search reports also provide:
• information about the land affected by the owners corporation;
• any limitations on the owners corporation;
• the postal address for service of notices; and
• any notations on the plan.
Premium reports also provide folio references and the name and details of the manager of the owners
corporation.
You should not need to obtain an owners corporation certificate as the vendor is required to provide
this in the vendor statement.
You should ensure that the owners corporation has the appropriate insurance. You will normally be
able to confirm this from the owners corporation certificate. However, it is also prudent to obtain a
certificate of currency from the owners corporation insurer.
19.9 Finance
You should ascertain from your client whether they will be providing the funds required for settlement
or whether they will be borrowing from a lender either in whole or to supplement their own funds. It is
uncommon for a contract for the sale of a commercial property to be subject to finance.
If the contract is subject to loan, then the particulars of sale in the standard contract under “Loan”
relating to the details of the loan will need to be completed. You should advise your client of the need
to keep in close contact with their lender to ensure the loan approval is given by the due date and that
the lender is ready to advance the required amount on the settlement date. You should also advise
your client of their obligations in relation to obtaining the loan: standard contract GC 20.
If a contract is not subject to loan and your client is borrowing money for the purchase, it is prudent for
your client to obtain approval of the loan from the lender before entering into the contract.
You should request from your client the lender’s details and the amount of the loan. If the funds being
provided by the lender for settlement are less than the amount required for settlement, it is important
that your client understands that they will have to supplement these funds and provide you with the
balance for settlement in the appropriate form by the settlement date. You should also ensure that your
client understands that in addition to the contract price there will be further costs involved for the
purchase, including duty and registration fees and amounts for adjustments.

A purchaser of residential property may be eligible to receive a First Home Owner Grant. Further
information on this grant is available from the State Revenue Office website.
Your client may be selling another property (or may have already sold it and be awaiting settlement)
and may be relying on those funds before they can settle on the property purchased. In these
circumstances, if you are not acting on the earlier sale, you should seek information concerning the
matter and its progress, and obtain authority from your client to make any necessary inquiries of the
lawyer acting for your client in connection with the sale.
Where the purchaser wishes to simultaneously settle the sale of another property and the purchase of
the new property, you must ensure careful co-ordination and organisation in relation to pre-settlement
matters.
19.10 Nomination
A purchaser may nominate an additional or a substitute purchaser to take the whole or part of the title
to the land. Such a nomination has two key consequences, in that:
• the nominee, rather than the purchaser, is the transferee of the land; and
• the nomination may affect the liability of the original purchaser to pay duty.
Process of nomination
A vendor who signs a transfer to a person other than the purchaser must be satisfied that the
substituted party has been validly nominated. General condition 4 of the standard contract enables
the purchaser to nominate; however, it clarifies that a nomination does not substitute the nominee
as “purchaser” but allows the nominee to be an additional or replacement “transferee”. The named
purchaser remains personally liable for the due performance of all the purchaser’s obligations under
the contract after the nomination. No time frame is specified in the standard contract for the
nomination.
Where a contract contains additional or replacement special conditions in relation to nomination these
will need to be checked to ensure your client complies with them. For example, the vendor may require
a purchaser nominating a nominee that is a proprietary company to procure the directors of the
nominee company to provide the vendor with a guarantee.
There is no prescribed form of nomination and lawyers usually prepare their own forms. See
Appendix 7 for an example of a nomination form. A nomination does not require a new contract unless
the contract between the vendor and original purchaser requires a new contract to be entered into as
part of the nomination process.
The nominee’s information must be entered into the Digital Duties Form to calculate land transfer duty
payable at settlement.
If the nominated purchaser wishes to apply for a First Home Owner Grant, the SRO may require
additional supporting evidence with the application.
Duty on sub-sale
Where a vendor enters into a contract to sell or transfer property to a purchaser (the first purchaser),
but a person other than the first purchaser obtains the right to have the property transferred to them
(the subsequent purchaser, or transferee), this may be a sub-sale: Duties Act Pt 4A Div 2. There will
be separate duty payable on the sale of the property from the vendor to the first purchaser, as well as
on the transfer of the property from the first purchaser to the subsequent purchaser, if:
• the subsequent purchaser (or an associate) gives or agrees to give additional consideration in
order to obtain the transfer right. Additional consideration is any consideration exceeding the

consideration that the first purchaser had agreed to give the vendor but does not include
reimbursement of excluded costs such as legal and other fees: s 32B; or
• after the contract of sale is entered into but before the property is transferred, land development
occurs in relation to the property. Land development includes preparation of a plan of subdivision,
applying for or obtaining a planning or building permit or developing or changing the property in
any other way that would lead to enhancement of its value: s 32I.
There may also be separate duty payable in relation to certain transfers resulting from options: s 32P.
19.11 Leases
Where the property is sold subject to a lease, it is important that your client understands that they take
the property subject to the lease and will not receive vacant possession at settlement. You should review
the terms of such leases and advise your client accordingly. You should also check whether any tenant
has granted any security under any lease and confirm the vendor is holding that security and how your
client will obtain the benefit of that security (this is usually addressed in the contract of sale).
Where possible, you may also seek the inclusion of warranties in relation to matters that you are not
able to resolve or detect through your own enquiries. Note that the purchaser indemnifies the vendor
against all obligations under the lease that are to be performed by the landlord after settlement:
standard contract GC 5.2.
19.12 Service agreements

Where the property is sold subject to a service agreement, you should review the terms of each service
agreement, check how the contract of sale addresses the treatment of such service agreements, and
advise your client of the consequences.
19.13 Insurance
The vendor carries the risk of loss and damage to the property until settlement: standard contract
GC 31. In the case of residential sales, it is uncommon for the vendor to reverse the situation by
deleting or amending this general condition, but if it is amended or deleted then insurance details must
be provided in the vendor statement.
A purchaser may rely on any insurance held by the vendor in respect of any damage to or destruction
of any part of the land during the period between the making of the contract and settlement: SLA s 35.
However, there may be a number of limitations on the effectiveness of the right of indemnity under a
vendor’s policy of insurance.
Where a house is so damaged as to be unfit for occupation before settlement, the purchaser may
rescind the contract of sale by notice to the vendor within 14 days of the purchaser becoming aware
of the damage: SLA s 34. However, this section will not cover partial damage where a house is still fit
for occupation.
You should advise your client that, in all the circumstances where risk passes to the purchaser from
the date of contract, it is essential they obtain their own insurance cover for damage to the property
from the date that they sign the contract.
19.14 Caveat
You should seek instructions from your client whether they wish to lodge a caveat to protect their
interest in the land. Caveats must be lodged electronically. A caveat gives anyone searching the title
notice of a purchaser’s interest in the land.
A caveat does not give the caveator an interest in land; it merely gives the caveator the right to notice
from the Registrar of Titles of the lodgment of any dealing affecting the land.

It is common for a purchaser of commercial property to lodge a caveat. It is also prudent practice and
good risk management when acting for a purchaser of residential property to recommend to your client
that a caveat be lodged to protect their interest between the date of contract and the date of settlement,
particularly if there is a long settlement period or the contract is a terms contract.
A caveat lodged by or on behalf of a purchaser under a contract of sale will lapse automatically on
registration of the transfer of the land to that purchaser/caveator and no withdrawal of caveat will be
required: TLA s 90(5) and (6). However, if the original purchaser has nominated an additional or
substitute purchaser and the transferee differs from the caveator, then a withdrawal of caveat will be
required to enable registration of the transfer.
19.15 Off-the-plan purchases

When acting for a purchaser buying off-the-plan, you should:
• explain the plan of subdivision to the purchaser and point out:
– any easements or restrictive covenants created or implied by the plan;
– any public open space contribution; and
– whether it is a staged subdivision;
• explain to your client their rights under the SLA;
• where you are able to negotiate the contract, seek to:
– ensure that settlement is at least 14 days after the vendor provides the purchaser with
written notification of the registration of the plan, as provided in the particulars of sale in the
standard contract. This will put the onus on the vendor to keep track of the progress of the
plan and allow enough time for you and the incoming mortgagee to attend to pre-settlement
matters;
– exclude or limit any right of the vendor to terminate the contract if the plan is not registered
by a specified date;
– ensure that the period before which the purchaser can terminate the contract if the plan is not
registered is not too lengthy. Under the SLA, the period is 18 months unless specified
otherwise;
– impose obligations on the vendor to procure registration of the plan of subdivision; and
– limit any rights on the part of the vendor to amend the plan of subdivision;
• obtain a copy of the planning permit for the subdivision (it may be included in the vendor statement)
and check if there are any ongoing conditions. If possible, you should also include a provision in
the contract that requires the vendor to comply with any conditions that may apply after settlement;
• where there is an owners corporation, check that the vendor has effected insurance in accordance
with the requirements under the OCA and Subdivision Act and provided the requisite information
in the vendor statement under the Subdivision Act;
• where the purchase involves a new home, ensure:
– the vendor has complied with their statutory obligations;
– there is a certificate of currency for the building defects insurance and not just a letter of
eligibility from the insurer; and
– there is an inspection report attached to the vendor statement or the contract and that the
report complies with the Building Act, if the vendor is an owner-builder. You should also
consider this report and draw the purchaser’s attention to any defects noted in the report;
• where the purchase involves a home under construction, check there is a separate major domestic
building contract with a registered builder and review its terms. Where you are able to negotiate
the contract, try to ensure that:

– settlement is conditional on the completion of the home and the issue of a certificate of
occupancy. There should be a right of rescission on the part of the purchaser if this does not
occur by a specified date, in addition to conditions dealing with registration of the plan of
subdivision;
– the contract includes a process to be followed to determine when the home is complete (that
is, final inspection by the purchaser, receipt of certificate of occupancy, architect’s certificate);
– there are detailed plans and schedules of finishes and inclusions in the contract. The contract
should provide that:
• the vendor must cause the home to be constructed in accordance with those plans and
schedules;
• the vendor has limited rights to make variations; and
• where possible, the purchaser has rights to request certain variations;
– there are obligations on the part of the vendor to remedy or procure the builder to remedy any
defects within a specified time after notification by the purchaser; and
– the vendor assigns the benefit of any warranties for fittings, fixtures or equipment to or holds
them on trust for the purchaser; and
• where the purchase involves the construction of a building or a new building other than a home
and you are able to negotiate the contract, try to ensure that:
– settlement is conditional on the completion of the building and the issue of a certificate of
occupancy. There should be a right of rescission on the part of the purchaser if this does not
occur by a specified date, in addition to conditions dealing with registration of the plan of
subdivision;
– the contract includes a process to be followed to determine when the building is complete
(that is, final inspection by the purchaser, receipt of certificate of occupancy, architect’s
certificate);
– there are detailed plans and schedules of finishes and inclusions in the contract. The contract
should provide that:
• the vendor must cause the building to be constructed in accordance with those plans and
schedules;
• the vendor has limited rights to make variations; and
• where possible, the purchaser has rights to request certain variations;
– there are obligations on the part of the vendor to remedy or procure the builder to remedy any
defects within a specified time after notification by the purchaser;
– the vendor assigns the benefit of any warranties for fittings, fixtures or equipment to or holds
them on trust for the purchaser; and
– settlement is conditional on the vendor discharging any GAIC liability at the vendor’s expense.
You should also advise your client of any ongoing rights the vendor will continue to have after
settlement (for example, voting at owners corporation meetings).
19.16 Deposit
The vendor is likely to seek a release of the deposit by requesting the purchaser to sign a s 27
statement. You should check any s 27 statement provided to your client to ensure that it is acceptable,
including that:
• the balance of the purchase price will be sufficient to pay out the vendor’s loan;
• there are no caveats of concern on title; and
• the contract is unconditional.

It is advisable to ask for independent verification of any amounts owing on the property as provided by
a letter from the mortgagee.
If GC 14.3 of the standard contract applies to the sale, you should check whether the total amount of
any debts secured against the property does not exceed 80% of the sale price.
If your client has any objections to the release of the deposit, you should let the vendor’s lawyers know
within 28 days of your client receiving the statement. Otherwise, the purchaser will be deemed to have
authorised the release of the deposit and to have accepted title.
20 PREPARING FOR SETTLEMENT

20.1 Registration with an electronic lodgment network
Each party to a conveyancing transaction must be represented by a Subscriber so that the transaction
can proceed electronically.
To become a Subscriber, you must:
• agree to the PEXA Participation Agreement;
• agree to the Digital Certificate Subscriber Agreement; and
• undergo a VOI by PEXA.
Once you become a Subscriber, PEXA will confirm your status and provide a username. You must log
into the PEXA website, or alternatively through your sponsor (such as an information broker or practice
management software provider), and set up a Subscriber profile.
You must set up the system by selecting three different levels of access within PEXA:
• Subscriber Manager;
• Subscriber Administrator (nominated by the Subscriber Manager); and
• User.
20.2 Obtaining client authorisation and verification of identity

To be represented by a Subscriber, each client (the vendor and the purchaser) must complete the
requisite form of client authorisation, which can be found in VIC Participation Rules Sch 4. A client
authorisation enables the client to authorise a Subscriber to do one or more things on the party’s behalf
in connection with the transaction, including to act on their behalf and/or to digitally sign on their behalf.
Note that a client authorisation is not required for caveats, priority notices, extensions and withdrawals
of priority notices, but is required for all other transactions taking place electronically. For further
information on client authorisations, see VIC Participation Rules r 6.3.
Each Subscriber must complete a VOI of each of their clients by:
• applying the Verification of Identity Standard (set out in VIC Participation Rules Sch 8); or
• taking reasonable steps or using the services of an identity agent who takes reasonable steps to
verify the identity of the clients.
It is best practice to refer to the Verification of Identity Standard. If the Standard is properly carried out
it will be deemed to constitute reasonable steps.
For further information on the VOI process, see Model Participation Rules Guidance Note 2 –
Verification of Identity.
20.3 Creating and populating the workspace

Subscribers and Users can log in to PEXA using their account details and complete the two-step
access verification. In the Dashboard, either party can set up a workspace in PEXA.

The following information must be provided in the workspace:

• the jurisdiction in which the property is located;
• the Subscriber’s role in the transaction (for example, proprietor on title (vendor), incoming
proprietor (purchaser), incoming mortgagee (purchaser’s lender) or mortgagee on title (vendor’s
lender));
• land title information;
• matter number;
• workgroup information; and
• settlement date and time.
Subscribers or Users must select whom they represent, either the proprietor on title (vendor) or the
incoming proprietor (purchaser). They should also invite other participants to join the workspace. For
example, if the incoming proprietor (purchaser) is borrowing money to purchase the property and
securing the loan against the land, then they will invite the incoming mortgagee (purchaser’s lender).
If there is an existing mortgage already on the certificate of title, then the proprietor on title (vendor)
will invite the mortgagee on title (vendor’s lender).
The elodgment status will be identified as “In Preparation” when the workspace has been created and
edits are required.
20.4 Adjustments
The parties have the option of using the adjustments calculator provided by PEXA. In practice,
adjustments are usually calculated by the purchaser’s representative, using conveyancing software,
then confirmed by the vendor’s representative.
The vendor is liable for all periodic outgoings, such as rates and taxes in respect of the property, up to
and including the day of settlement: standard contract GC 23. The purchaser is responsible for these
amounts from the day after settlement to the end of the ratings period. Similarly, the vendor is entitled
to any rent and other income received in respect of the property up to and including the day of
settlement.
The amounts for rates, taxes and other outgoings, as well as rent and other income, are adjusted at
the date of settlement. Also adjusted are other payments a party is responsible for, such as the vendor
having to pay for any outstanding GAIC and for the registration fees on any discharge of mortgage or
release of registered security interest: GC 11. The purchaser’s lawyer will need to contact the relevant
authorities to confirm any rates outstanding before preparing the statement.
A statement of adjustments and settlement statement are generally prepared for the purpose of making
adjustments.
If the vendor has not paid rates, taxes or other outgoings or GAIC before settlement, often the full
amount of those costs are deducted from the amount due to the vendor at settlement. The purchaser
then directs the amounts payable to the authorities or owners corporation manager.
The contract may relate to the sale of part of a larger property and the property in the contract may not
yet be separately rated. This is often the case in off-the-plan sales. Usually, the contract specifies how
adjustments are to be made in these circumstances and they are calculated on an area or lot basis,
often by the vendor’s representative.
As adjustments are linked to actual possession, if settlement is delayed, adjustments should be
recalculated to take effect on the day that settlement actually takes place.
The FRCGW regime and GST withholding regime must also be considered, as funds may be required
to be withheld from the vendor and paid to the ATO at settlement.
See Appendix 8 for an example of a statement of adjustments and settlement statement.

Land tax
There are special considerations relating to the adjustment of land tax. Land tax is not payable on
residential property where it is the principal place of residence, and therefore does not often arise in
the context of residential conveyances. However, where the property is an investment property, it will
be applicable. There are also special considerations relating to adjustments where the property is
leased.
Land tax is assessed on the unimproved value of land owned by a person as at 31 December of the
year preceding the year of assessment (excluding exempt land). However, no land tax is payable if the
unimproved value of the land is less than $250,000. If the vendor owns more than one piece of land
then the value of all land owned is aggregated and the land tax liability is allocated over all the land.
Land tax rates are available on the State Revenue Office website. However, GC 23 provides for land
tax to be adjusted on a single holding basis. Therefore, if GC 23 applies, the purchaser’s lawyer should
calculate adjustments as if the property were the only property owned by the vendor and apportion that
amount between the vendor and purchaser accordingly.
If the vendor has not paid the full amount of land tax to the SRO for the calendar year, then the full
amount of the land tax is usually deducted from the amount due to the vendor at settlement and
forwarded to the SRO.
Adjustments where the property is sold subject to a tenancy

There are also special considerations relating to adjustments where the property is sold subject to a
tenancy. The contract of sale may contain a special condition addressing the method of adjustments,
and so the contract should be checked before making any such adjustments.
The vendor is entitled to the rent in respect of the property up to and including the settlement date, and
the purchaser is entitled to the rent from then onwards: standard contract GC 23. If the rent is paid up
to and including the date of settlement, no adjustment will be necessary; however, an adjustment will
be needed if the rent has been paid beyond the date of settlement. The purchaser is entitled to receive
the rent directly from the tenant for the period after settlement. A notice of attornment should be
obtained from the vendor or the vendor’s representative directing the tenant to pay post-settlement
rent to the purchaser. If the tenant is in arrears as at the settlement date, there will be no adjustment.
In the absence of a special condition in the contract, the vendor is not entitled to call upon the purchaser
to pre-pay rental that the purchaser may receive at some later time. A suitable special condition may
require the purchaser to authorise the vendor to take action against the tenant in the purchaser’s name
in respect of any arrears of rent.
A lease will also usually provide for the vendor/landlord to recover rates from the tenant. If the tenant
is responsible for such costs and they are paid, no adjustment is required. If the tenant is responsible
for such costs but they are in arrears then, in the absence of a special condition in the contract, the
purchaser will usually require the vendor to pay the rates, which are adjusted on a rates-paid basis.
If the tenant has paid a security deposit, it is common to adjust that amount between the vendor and
the purchaser.
20.5 Settlement money and the Financial Settlement Schedule

Before settlement, the financial settlement screens in the workspace are updated and balanced by
each party’s representative. There are two main components of the PEXA Financial Settlement
Schedule:
• Source funds: These are the funds that are made available for settlement and are entered in PEXA
as source financial line items. These funds come from the purchaser and, if there is one, the
incoming mortgagee. In PEXA, source funds can only be made available for debit by the financial

institution’s bank account (as mortgagee), the Subscriber’s trust account or the PEXA source
account.
There is no facility in PEXA that allows source funds to be debited from any other bank account.
Therefore, where a purchaser wishes to pay the balance of the settlement funds in cash, they must
deposit the funds into the Subscriber’s trust account. Where a purchaser deposits funds into the
Subscriber’s trust account, the law practice is given authority to disburse these funds in PEXA pursuant
to the purchaser’s instructions. This represents power money, such that only persons in the law
practice given express power may exercise the authority and digitally sign the Financial Settlement
Schedule in PEXA on the purchaser’s behalf. The law practice must keep appropriate records.
Only Users who are signatories to the Subscriber’s trust account are able to hold the permission of
“Signer – Trust Account” and therefore able to authorise the withdrawal of funds from the
Subscriber’s trust account. The authorisation of a trust account instruction must be digitally signed
in PEXA.
• Destination accounts: These are the financial accounts the source funds will be transferred to
at settlement and are entered as destination financial line items. Destination financial line items
are the funds to which the settlement money is disbursed. Unlike source funds, payments in
PEXA can be made to any Australian bank account or BPAY facility. Council, water rates and
other third-party disbursements (including legal fees) can be added as destination financial line
items. PEXA fees and LUV fees are automatically entered as destination line items.
Where there is a surplus of funds from the sale proceeds, the balance is payable to the vendor.
The Subscriber verifies the vendor’s bank account details (by phone) and enters the account details
as the destination financial line item before digitally signing the Financial Settlement Schedule.
The source funds and destination accounts must balance in order for the Financial Settlement
Schedule to be digitally signed and the settlement to proceed.
Once the DOL identifier is entered into PEXA, land transfer duty that has been assessed in DOL will
be verified and is also automatically entered as a destination financial line item payable to the SRO.
The day before, or on the day of, settlement, the outgoing mortgagee and incoming mortgagee each
confirm the payout and payment amounts.
The incoming mortgagee will add their funds available for settlement as a source line item. Where the
purchaser is providing equity, the purchaser’s lawyer will insert that amount as a source line item and
verify that the funds for the equity are available.
Where the purchaser pays by cash, the client will deposit money into the Subscriber’s trust account.
The Subscriber must verify once the funds have cleared.
If money is to be debited from the Subscriber’s trust account, the purchaser’s lawyer must digitally sign
as the “trust signatory”. Each party must authorise the Financial Settlement Schedule by digitally
signing the Financial Settlement Statement confirming that funds are available for settlement. Once
this is done, the “Financial Settlement” indicator will change the status to “Ready”.
20.6 Transfer
The purchaser’s lawyer is responsible for preparing the transfer of land in the PEXA workspace at least
7 days before the date of settlement: standard contract GC 10. The vendor’s representative checks
the details of the transfer and digitally signs on the vendor’s behalf in the workspace. The purchaser’s
representative then digitally signs the transfer on the purchaser’s behalf.
20.7 Notice of acquisition

The purchaser’s lawyer should prepare and sign in PEXA a notice of acquisition by the settlement date.
Under the Local Government (General) Regulations 2004 (Vic), a purchaser is required to lodge a

notice of acquisition of an interest in land within 1 month of acquisition with the local council. A copy of
the notice is also sent to the water authority to enable it to update its records.
20.8 Other notices

The vendor’s lawyer usually prepares attornment notices; that is, letters or notices to the tenants of the
property, advising them of the sale and directing them to pay rent to the purchaser or the purchaser’s
agent after settlement. The vendor’s lawyer usually delivers these notices at settlement to the
purchaser’s lawyer, who will then send them to the respective tenants after settlement.
If the land is a lot affected by an owners corporation, both vendor and purchaser are required to notify
the owners corporation of the new owner’s name and address within 1 month of completion of the
contract (settlement): OCA s 134.
20.9 Digital Duties Form

The vendor must promptly initiate the Digital Duties Form in respect of the transaction, and both parties
must co-operate to complete it as soon as possible: standard contract GC 10.2. All parties’
representatives must be registered to use DOL. The Digital Duties Form is prepared in DOL.
The vendor’s lawyer creates the form in DOL and completes all contract-related information to create
the transferor statement, which in turn pre-populates part of the purchaser’s transferee statement. The
vendor’s lawyer then invites the purchaser’s lawyer to enter the purchaser’s information. It is
recommended that the form be completed by the vendor’s lawyers at least 10 days before settlement
to allow the purchaser’s lawyer sufficient time to complete the remainder of the form. Once complete,
lawyers for each party invite the vendor and the purchaser to sign the online form.
Once the form is complete and the parties have signed, an SRO settlement statement can be
generated by the purchaser’s lawyer. This statement contains a form ID and an estimate of the duty
payable. The form ID should be entered into the PEXA workspace and the amount of duty will
automatically be entered as a destination financial line item payable to the SRO in the Financial
Settlement Schedule.
20.10 Priority notice

A priority notice is a notification of an intended dealing with land. A priority notice acts as an alert to
interested parties of pending transactions and will temporarily prevent the registration of any other
dealings or instruments over a specified folio. A priority notice will not prevent the recording of an
instrument that is not registered, including caveats.
A priority notice will extend to all instrument types and will protect the interests of parties to an intended
instrument or transaction from the time the priority notice is lodged until that instrument or transaction is
lodged. Details in the priority notice must be accurate and match details in the intended instrument. Priority
notices must be lodged electronically via an ELN on behalf of a registered proprietor or an incoming party.
The notice will expire when either:
• the dealing referred to in it is registered;
• it has been 60 days since it was lodged;
• it is withdrawn; or
• a court orders its removal.
If a priority notice needs to be withdrawn and a new one lodged, the intended dealing will lose priority
over any dealings that have been lodged after it. It is therefore important that you ensure the priority
notice is correct.
For further information on priority notices, see the Land Use Victoria website.

20.11 Satisfying mortgagees’ requirements

The vendor’s lawyer completes the discharge authority for signing by the vendor (unless it is completed
online) and should ensure that any outgoing mortgagee is ready to proceed to settlement. The vendor’s
lawyer will also need to obtain the payout figure from the outgoing mortgagee before they can complete
the Financial Settlement Schedule for settlement and should also confirm the payout figure with the
vendor.
The vendor’s lawyer should ensure that if there is any security interest over the property, that the
chargee or security holder will provide a release in respect of the property by settlement. Often a
chargee or security holder will be the same as the mortgagee, and so will hand over the release with
the discharge of mortgage.
If the purchaser is borrowing money for the purchase of the property, the purchaser’s lawyer must
comply with the incoming mortgagee’s requirements and should confirm these requirements with
the incoming mortgagee as soon as possible. An incoming mortgagee will often require a copy of the
contract of sale. To avoid any delays to settlement, the purchaser’s lawyer should check that the
purchaser has attended to the incoming mortgagee’s other requirements, such as signing the mortgage
documentation. Incoming mortgagees have their own timing requirements for provision of these details.
Where the purchaser is supplementing the funds provided by the incoming mortgagee, or funding the
purchase of the property themself, the purchaser’s lawyer must arrange for the purchaser to deposit
the required funds into the practice’s trust account in sufficient time to be clear for electronic funds
transfer at settlement.
A discharge of mortgage must be created in PEXA by the outgoing mortgagee and lodged
electronically.
20.12 Original documents

The vendor’s lawyer should obtain from the vendor any other original documents required for
settlement (for example, any original leases and bank guarantees). The contract of sale will normally
specify any original documents that the vendor is required to deliver at settlement.
20.13 Title activity checks

As PEXA is integrated with LUV, it automatically performs routine TACs while the workspace remains
open and at increasing intervals leading up to the settlement time. A TAC is an automated check
between PEXA and LUV for any activity on a land title in the workspace. The TAC can return either a
negative result (indicating no activity) or a positive result (indicating activity).
Where a TAC returns positive, PEXA will immediately notify by email all parties in the workspace if a
new dealing or other activity has occurred on the title.
20.14 Pre-settlement inspection

The purchaser and/or another person authorised by the purchaser has a right to inspect the property
at any reasonable time during the 7 days preceding and including the settlement day: standard contract
GC 29. You should recommend your purchaser client carry out this inspection to ensure that the
property is in the same condition as at the date of the contract and to check the condition and presence
of any goods included in the sale.

20.15 Pre-settlement letter

In most circumstances, the vendor’s lawyer writes a pre-settlement letter to the vendor that:
• sets out the date and tentative time for settlement;
• sets out the proposed settlement figures and provides a copy of the statement of adjustments and
settlement statement;
• advises of the amount required to pay out the outgoing mortgagee or chargee (if applicable);
• confirms instructions regarding the balance of the purchase price;
• advises the client to arrange a final water, gas and electricity readings and to disconnect the
telephone from the settlement date;
• confirms that vacant possession is required (if applicable); and
• gives details for handing over keys and possession (if an estate agent is not involved).
The purchaser’s lawyer usually writes a pre-settlement letter to the purchaser that:
• sets out the date and tentative time for settlement;
• sets out the proposed settlement figures and provides a copy of the statement of adjustments and
settlement statement;
• requests the purchaser to ensure that they have sufficient funds readily available for any amounts
not being provided by a financier at settlement;
• outlines what the rates position will be after settlement;
• advises the purchaser to carry out a pre-settlement inspection of the property;
• advises the purchaser to set up new gas and electricity accounts and to connect the telephone
from the settlement date;
• if there is no incoming mortgagee, confirms where the eCT will be held; and
• confirms where any original documents will be held.
20.16 Final search

The purchaser’s lawyer should carry out a final (title) search as close as possible to the time of
settlement to confirm that there are no new dealings (for example, caveats) affecting the property since
the original search. The final search will identify dealings lodged in the previous 125 days.
If the final search or the TAC in PEXA discloses activity on title then settlement must be delayed until
clear title can be given.
21 SETTLEMENT
21.1 Date of settlement
The date of settlement is the date specified in the particulars of sale in the contract. If the contract
provides for a specified period from the day of sale (for example, 60 days from the day of sale), then
counting begins on the day after the day of sale. If the date for performing any action, including
settlement, falls on a Saturday, Sunday or bank holiday, then time is extended until the next business
day: standard contract GC 26.2.
Time is of the essence of the contract: GC 26.1. It is of the essence as to the day, rather than as to the
hour. If the parties agree to settle at a particular time on the settlement date, and one party fails to
settle at that time, then that failure constitutes a breach of contract, although there should be no penalty
if settlement is still conducted at any later time that same day. In PEXA, if the workspace is not
Ready/Ready at the scheduled settlement time, the settlement time in the workspace will rollover to
the next half-hour until the end of the business day.

21.2 Electronic settlement

Once all parties have completed any outstanding tasks, the workspace indicators change the status to
“Ready-Ready”. At the nominated settlement time, the workspace will lock and proceed to settlement.
In respect of documentation, the lodgment status will change from “Ready” (all documents have been
signed and verified), to “Lodging” (lodging with LUV), to “Lodged”, then to “Complete”.
At the same time, in respect of financial settlement, the status will change to “Settling”.
PEXA sends payment instructions and, simultaneously, settlement money is transferred by electronic
funds transfer from the nominated source account (trust account or PEXA source account) into a
holding account of the Reserve Bank of Australia. The status will change to “Settled” (financial
settlement is complete), to “Disbursing” (money is disbursed to the nominated destination accounts),
then to “Disbursed”.
The Subscribers are then notified by PEXA that settlement has occurred.
22 AFTER SETTLEMENT
22.1 Reporting to the client
It is usual for lawyers to call their clients and any estate agents immediately after settlement to confirm
that settlement has occurred. The vendor’s estate agent usually holds the keys for the property and
will release the keys to the purchaser once the vendor’s lawyer has confirmed to the agent in writing
that settlement has occurred.
A vendor’s lawyer will usually write to the vendor:
• confirming that settlement occurred;
• advising of the total amount received on settlement and where the funds were deposited;
• confirming any advice given before settlement; and
• enclosing a bill for the matter.
A purchaser’s lawyer will usually write to the purchaser:
• confirming that settlement occurred;
• advising of the total amount paid on settlement and the source of those funds;
• confirming where any original documents (such as leases, bank guarantees) will be held;
• confirming the notices of acquisition have been sent to the relevant authorities;
• confirming the purchaser’s liabilities regarding the payment of rates;
• confirming any advice given before settlement; and
• enclosing a bill for the matter.
22.2 Land transfer duty

Land transfer duty (colloquially called stamp duty) is calculated on the dutiable value of the transaction.
The dutiable value is the greater of:
• the market value of the property and goods transferred with the property; or
• the consideration (price paid) including any GST.
Whether or not they are included in the contract, goods sold or transferred with the property will be
aggregated by the SRO if they are considered to be substantially part of the one transaction.
The rates of duty applicable must be checked at the relevant time (Duties Act Pt 3) and are available
on the State Revenue Office website.

Assessment of land transfer duty is completed in DOL. The Digital Duties Form is linked online to the
electronic transaction.
22.3 Other matters

The purchaser’s lawyer should send a copy of the notice of acquisition to the local council and water
authority.
The vendor’s lawyer should send any attornment notices to the respective tenants, and notify the
owners corporation (if any) of the new owner’s name and address.
23 CONCLUSION
Every conveyancing transaction is unique and may present its own issues. As lawyer for either the
vendor or the purchaser, you must be prepared to advise on and address issues and problems that may
arise during the course of each particular matter. In doing so, you should always consider the terms of
the contract, the relevant legislation, case law and developments in technology, which will govern the
parties’ respective rights and obligations, conveyancing practice and the professional responsibilities of
a lawyer.

APPENDICES
APPENDIX 1 – CLIENT AUTHORISATION FORM

APPENDIX 2 – PROPERTY QUESTIONNAIRE FOR VENDOR –

RESIDENTIAL AND COMMERCIAL
RESIDENTIAL PROPERTY
1. Please provide the contact details of the estate agent handling the sale.
2. Is the property affected by any mortgages or charges? Are there any mortgages or charges that will not be
released on settlement?
3. Please provide the contact details of the mortgagee (if applicable).
4. What goods are included in the sale?
5. Are there any fixtures or fittings excluded from the sale, and if so, provide details?
6. Where is the certificate of title or the computerised title located? (If there is a mortgagee, the mortgagee will
normally hold the title.)
7. If the vendor is not the registered owner of the land, please provide evidence of the vendor’s power to sell
the property.
8. Does the property have the benefit of any unregistered easements in respect of neighbouring land?
9. Is the property held under trust? If so, please provide a copy of the trust deed.
10. Is the property affected by any covenant, restriction, public right of way or other third-party rights such as
adverse possession?
11. Have the terms of all easements, covenants or restrictions affecting the property been complied with?
12. Have any easements been built over? If so, was consent granted?
13. Is there access to the property by road?
14. Are there any disputes regarding boundaries or fences?
15. Are there any encroachments onto or from any neighbouring land?
16. Are there any leases or licences over the property? If so, please provide copies.
17. If the property is tenanted, is the property to be sold with vacant possession or subject to the tenancy?
18. Have the conditions of all planning permits been complied with?
19. Have all required approvals and certificates been issued for the construction of the property? Please provide
copies of building permits, certificates of final inspection and any certificate of occupancy.
20. Please provide details of water/sewerage, gas, electricity and telephone services to the property and the
service provider. Are any services available but not supplied? If the service is not of the standard level
available in the locality, please provide details.
21. Is the property registered by Heritage Victoria or the Australian Heritage Commission?
22. Are there any notices, orders, declarations, reports, recommendations or approved proposals of a public
authority or government department in respect of the property?
23. Where there is an owners corporation, please provide details of:
• insurance held by the owners corporation;
• owners corporation fees and charges;
• expenditure by the owners corporation that may result in an increased liability of owner of the property;
• the manager of the owners corporation
24. Have any works have been conducted on the property in the preceding 7 years and if so:
• Were building permits obtained?
• Were the works carried out by a registered builder?
• Please provide insurance details for the works (whether by the registered builder or the owner builder).
• Is there a certificate of occupancy for the property and if so, please provide a copy?
• Is there a building defects report (in the case of an owner-builder), and if so, please provide a copy?
25. Is there a swimming pool on the property? If so, when was it constructed and what barrier surrounds it?
26. Is the sale subject to GST? [You may need to advise your client on this issue.]

27. Are you foreign residents for foreign resident capital gains withholding tax purposes? [You may need to
advise your client on this issue.]
28. Is the property new residential land? [You may need to advise your client on GST withholding.]
29. Has the land been recently rezoned? [You may need to advise your client on WGT.]
30. [Where the contract does not provide for the property to remain at the vendor’s risk until settlement] Please
provide details of any insurance by the vendor in respect of damage to or destruction of the property.
COMMERCIAL PROPERTY
1. Please provide the contact details of the estate agent handling the sale.
2. Is the property affected by any mortgages or charges? Are there any mortgages or charges that will not be
released on settlement?
3. Please provide the contact details of the mortgagee (if applicable).
4. What chattels are included in the sale?
5. Are there any fixtures or fittings excluded from the sale, and if so, provide details?
6. Where is the certificate of title located? (If there is a mortgagee, the mortgagee will normally hold the title.)
7. If the vendor is not the registered owner of the land, please provide evidence of the vendor’s power to sell
the property.
8. Does the property have the benefit of any unregistered easements in respect of neighbouring land?
9. Is the property held under trust? If so, please provide a copy of the trust deed.
10. Is the property affected by any covenant, restriction, public right of way or other third-party rights such as
adverse possession?
11. Have the terms of all easements, covenants or restrictions affecting the property been complied with?
12. Have any easements been built over? If so, was consent granted?
13. Is there access to the property by road?
14. Are there any disputes regarding boundaries or fences?
15. Are there any encroachments onto or from any neighbouring land?
16. Please provide copies of any current agreements for lease, leases, licences, or other agreements pertaining
to the property, including correspondence varying any such documents. If there is a tenancy schedule
detailing this information, please provide a copy.
17. Please provide a copy of any disclosure statements provided to tenants under the Retail Leases Act
2003 (Vic) or any earlier Acts.
18. Please provide details of rent recovered from every tenant. If there is a rental schedule detailing this
information, please provide a copy.
19. Do you recover GST from all tenants?
20. Are any rent reviews in progress?
21. Please provide details of outgoings recovered from every tenant. If there is an outgoings schedule detailing
this information, please provide a copy.
22. Have all securities and guarantees required under the leases and licences been received? If there is a
schedule of securities and guarantees, please provide a copy.
23. If there is an asset register identifying fit-out and plant and equipment owned by the landlord and by the
respective tenants, please provide a copy. If no such register exists, please provide details of ownership of
fit out and plant and equipment located within each tenancy.
24. Are you aware of any breaches by the landlord or the tenant/licensee of any lease or licence?
25. Please provide details of any disputes with any tenant or licensee.
26. Have you consented to any assignments, subleases or sublicences?
27. Have any tenants expressed rights to rent abatement or lease termination?
28. Is any tenant using its premises for any purpose other than the permitted use described in the relevant
lease?
29. Please provide copies of any service agreements in relation to the property.

30. Have the conditions of all planning permits been complied with?
31. Have all required approvals and certificates been issued for the construction of the property? Please provide
copies of building permits, certificates of final inspection and any certificate of occupancy?
32. Please provide details of water/sewerage, gas, electricity and telephone services to the property and the
service provider. Are any services available but not supplied? If the service is not of the standard level
available in the locality, please provide details.
33. Is the property registered by Heritage Victoria or the Australian Heritage Commission?
34. Are there any notices, orders, declarations, reports, recommendations or approved proposals of a public
authority or government department in respect of the property?
35. Where there is an owners corporation, please provide details of:
• insurance held by the owners corporation;
• owners corporation fees and charges;
• expenditure by the owners corporation that may result in an increased liability of owner of the property;
• the manager of the owners corporation.
36. Is the sale subject to GST and if so, is it intended to be sold as a going concern? [You may need to advise
your client on this issue]
37. [Where the contract does not provide for the property to remain at the vendor’s risk until settlement] Please
provide details of any insurance by the vendor in respect of damage to or destruction of the property.
38. Is the property contaminated or an actual or likely source of pollution?

APPENDIX 3 – SECTION 27 STATEMENT
Deposit Statement to the Purchaser of Real Estate Under Section 27 of The Sale of Land Act 1962
Vendor:
Property:
Estate agent or solicitor holding deposit (Stakeholder):
Section 27(3)
The vendor gives the purchaser the following particulars of all mortgages or caveats over the above property as
at this date:
The amount secured by the mortgage is: [#]
The mortgage [does not provide for further advances by the mortgagee] [provides for further advances as
follows [#]
The rate of interest presently payable under the mortgage is [#]
Subject to compliance with the terms and conditions of the mortgage the amount secured by the mortgage is to
be repaid by [#]
Instalments under the mortgage must be made as follows: Amount of [#] at [#] intervals
The vendor [is not in default under the mortgage] [is in default under the mortgage in the following respects: #]
At the date of giving these particulars, the amount required to discharge the mortgage is [#]
The mortgagee’s name and address are as follows: [#]
[To be completed if the contract is a terms contract and the consideration is to be satisfied in part by the purchaser
assuming the obligations of the mortgagor] – the mortgagee [has/has not] consented to the purchaser assuming
the mortgagor’s obligations under the mortgage.
Particulars of any caveat lodged under the Transfer of Land Act 1958: [#]
Dated:
............................................
Vendor
Section 27(4)
The Purchaser acknowledges being satisfied:
that the particulars given above are accurate; and
that the particulars identified in paragraphs (a) to [(h)/(i)] above indicate that the purchase price is sufficient to
discharge all mortgages over the property.
and authorises the Stakeholder to release the deposit moneys to the vendor in the vendor’s own right or as the
vendor directs.
Dated:
............................................
Purchaser

APPENDIX 4 – GST WITHHOLDING NOTICE
To:
Purchaser/recipient: ___________________________________________
Property address: ___________________________________________
______________________________
Lot no.:_______ Plan of subdivision: ____________
[Cross out whichever is not applicable]
The Purchaser/recipient is not required to make a payment under section 14-250 of Schedule 1 of the
Taxation Administration Act 1953 (Cwlth) in relation to the supply of the above property.
OR
The Purchaser/recipient is required to make a payment of the amount under section 14-250 of Schedule
1 of the Taxation Administration Act 1953 (Cwlth) as follows in relation to the supply of the above property:
Withholding amount: $______________
The purchaser/recipient will be required to pay the withholding amount on or before the day of settlement,
namely: _____________________________
Vendor/supplier ABN: ___________________________________________
From: Vendor/supplier: ___________________________________
Dated: __/__/20__
Signed by or on behalf of the vendor/supplier:__________________________

APPENDIX 5 – LEASE REVIEW FORM
Date
Premises
Lease
• Executed
Landlord
Tenant
Guarantor
Commencement Date
Termination Date
Term
Option Period
Initial Rent
Review Dates and Type of Review
Security
GST
Outgoings
Permitted Use
Assignment/Subletting

Restriction on Change of Control
Tenant’s Repair Obligations
Tenant’s Right to Make Alterations to the

Premises
Tenant’s Make Good/Reinstatement Obligations
Release/Indemnities
Positive Landlord Covenants (including any fitout

obligations)
Insurance
Damage & Destruction

• Rent Abatement
• Termination Rights
• Obligation to Reinstate
Early Termination Rights
Forfeiture
Incentives
Miscellaneous/Unusual/Missing Provisions
Retail Tenancies Legislation
Issues

APPENDIX 6 – SERVICE AGREEMENT REVIEW FORM
Description of Agreement
Parties to Agreement
Services Provided Under Agreement
Term
Option Period
Service Fee
Termination Rights
Rights to Assign/Novate

APPENDIX 7 – NOMINATION FORM
Relating to a contract between:
Vendor: #
Purchaser: #
concerning:
Property: #
Nominee: #
The Purchaser nominates the Nominee as an additional purchaser to take a transfer or conveyance together with
the Purchaser and directs the Vendor to apply the deposit as the deposit payable by both purchasers.
The Purchaser and the Nominee acknowledge that they are jointly and severally liable for the due performance
of the obligations of the Purchaser under the contract and payment of any expenses resulting from this nomination
(including land transfer duty).
Dated:
Signature of the Purchaser:
........................
Signature of the Nominee:
........................

APPENDIX 8 – STATEMENT OF ADJUSTMENTS AND SETTLEMENT

STATEMENT
Residential Property
PROPERTY:
STATEMENT OF ADJUSTMENTS AS AT [insert date]

Vendor Purchaser
$ $
Municipal Rates
Annual charge – $[#]
[Treated as] Paid for period – [#] to [#]
Purchaser allows [ ]/365 days
Water Rates
Quarterly fixed service charge
Purchaser allows [ ]/# days
Quarterly drainage charge
Purchaser allows [ ]/# days
Parks annual charge
Purchaser allows days [ ]/365 days
Vendor allows registration fee on Discharge

of Mortgage

Amount allowed by purchaser
Less amount allowed by vendor
TOTAL AMOUNT ALLOWED BY PURCHASER
SETTLEMENT STATEMENT
Purchase Price
Less deposit paid
Plus adjustments
TOTAL
Payments required $
[City Council]
[Water authority]
Balance

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PRACTICE PAPER P302

Sale and Purchase of Land

© 2023 The College of Law Limited

© The College of Law Limited 3

11.4 Vendor ................................................................................................................................ 35

4 © The College of Law Limited

18.6 Vendor statement ................................................................................................................ 47

© The College of Law Limited 5

20.8 Other notices ....................................................................................................................... 69

6 © The College of Law Limited

ARNECC Australian Registrars’ National Electronic Conveyancing Council

ATO Australian Taxation Office

BEEC building energy efficiency certificate

Building Act Building Act 1993 (Vic)

Climate Change Act Climate Change Act 2010 (Vic)

DBCA Domestic Building Contracts Act 1995 (Vic)

DOL Duties Online (State Revenue Office, Victoria)

Duties Act Duties Act 2000 (Vic)

EAA Estate Agents Act 1980 (Vic)

ECNL Electronic Conveyancing National Law

e-Conveyancing electronic conveyancing

eCT electronic Certificate of Title

ELN electronic lodgment network

ELNO electronic lodgment network operator

EPA Environment Protection Authority

FRCGW foreign resident capital gains withholding

GAIC growth areas infrastructure contribution

GST goods and services tax

LIV Law Institute of Victoria

LUV Land Use Victoria

NABERS National Australian Built Environment Rating System

© The College of Law Limited 7

OCA Owners Corporations Act 2006 (Vic)

OCR Owners Corporations Regulations 2018 (Vic)

PEA Planning and Environment Act 1987 (Vic)

PEXA Property Exchange Australia Ltd

PPSR Personal Property Securities Register

REIV Real Estate Institute of Victoria Ltd

SLA Sale of Land Act 1962 (Vic)

SLPAR Sale of Land (Public Auctions) Regulations 2014 (Vic)

SRO State Revenue Office

Subdivision Act Subdivision Act 1988 (Vic)

TAC title activity check

TLA Transfer of Land Act 1958 (Vic)

VIC Participation Rules Participation Rules determined by the Registrar of Titles

VOI verification of identity

WGT windfall gains tax

8 © The College of Law Limited

© The College of Law Limited 9

1.2 Torrens system

1.3 Paper conveyances

10 © The College of Law Limited

• a transfer of lease interest, survivorship or transmission application;

2 OVERVIEW OF ELECTRONIC CONVEYANCING

2.2 Key concepts

Electronic certificate of title

© The College of Law Limited 11

ELN and ELNO