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AI4Convey
Hi Alex,
Thanks for sending us the contract for 1 ABC Street, Melbourne. We've read both parts — the contract itself and the seller's Section 32 statement — and here's what's in it that's worth going through with a conveyancer before you sign.
What We Found
- 4 Red Flags — clauses that could cost you money or shift risk onto you
- 12 Special Conditions — extra terms added to the standard contract
- 11/12 Standard Disclosures Confirmed — see checklist below
🚩 Red Flags to Discuss with the Conveyancer
Standard protections deleted High
The contract deletes General Conditions 31.4, 31.5 and 31.6. These are the clauses that would let you hold back part of the purchase money at settlement over damage or defects.
Found in: Particulars of Sale, page 7
Forfeiture can exceed deposit High
If you default, the seller can forfeit the greater of 10% of the price or the deposit, whether it has been paid or not. The price is blank, so the figure cannot be worked out.
Found in: Particulars of Sale, page 7
Late settlement costs are uncapped High
If you fail to complete by 4pm on the settlement date, you must pay the seller's losses such as bridging finance costs, mortgage interest, accommodation and legal costs. These amounts are not capped.
Found in: Particulars of Sale, page 8
Asbestos in outdoor toilet disclosed High
The seller's statement says the outdoor toilet contains asbestos. The contract also says you cannot claim for defects, so this would be your responsibility.
Found in: Vendor's Statement, Material Facts Disclosure section, page 28
📋 Non-standard Special Conditions to Discuss
Special Condition 1 — Planning restrictions accepted
You buy the land subject to planning restrictions and controls that apply under the planning scheme.
Special Condition 3 — Warranties
You accept that nothing said by the seller or the seller's agent was meant to be relied on, and that you have not relied on it. The contract is the whole agreement between you and the seller.
Special Condition 4 — Director's Guarantee
If you are buying through a company, the person who signs the contract for the company must also sign the attached guarantee. You must give the seller a guarantee signed by every other director within seven days of the day of sale.
Special Condition 5 — Improvements
You buy the buildings and items sold with the property as inspected. The seller does not promise they are in good condition or meet building rules. You cannot ask the seller to fix or pay for any defect or non-compliance.
Special Condition 7 — Foreign Investment Review Board
You promise you have not broken the foreign investment approval rules by signing this contract, and that you have any required approvals. If that promise is untrue, you are in default and must cover the seller's losses. These promises continue after settlement.
Special Condition 10 — Excluded Settlement Dates
If settlement has not happened by 18 December 2024, the settlement date is set for 14 January 2025. Neither side can issue a default notice between 19 December 2024 and 14 January 2025.
These are the ones most likely to affect you, on top of those in the red flags above. The contract has 4 more (2, 8, 11, 12) that are standard or administrative — your conveyancer can take you through them.
✅ Vendor's Statement Checklist
Before you buy, the seller has to tell you 12 things about the property — who owns it, what's registered on the title, the rates, the planning rules, and so on. We looked for all 12. 11 of 12 were confirmed.
Confirmed: Title & encumbrances, Registered proprietor & mortgage, Planning scheme & overlays, Road access, Services connected, Outgoings, Notices & orders, Bushfire-prone status, Owners Corporation details (N/A), Leases & tenancies, Statutory due diligence warning
Ask your conveyancer to check: Building permits (last 7 years) — referred to, but a copy wasn't detected in your upload
This doesn't always mean something is missing. It might be elsewhere in the contract, or in a format our software couldn't read.
Recommended Next Step
Your next step is to speak to Jordan Hale at Hale Conveyancing, a licensed conveyancer who can go through every point above with you before you sign, or before the contract becomes unconditional.
Jordan has already been sent this report, so you can call or just reply to this email without having to explain anything first.
Jordan Hale
Hale Conveyancing
AI4Convey does not charge you. If you go ahead with the conveyancer copied into this email, they may pay us a referral fee. It does not change what you pay them, and your report was written before any conveyancer was chosen.
Important — Please Read
This report was put together automatically by software — not by a lawyer or conveyancer, and nobody has checked it by hand. It's general information, not legal advice, and we can't promise it's complete or correct. Please have a licensed conveyancer read your full contract before you sign or settle.
AI4Convey Team
support@ai4convey.com.au
P.S. — for your conveyancer
Alex, this part is written for Jordan, who is copied on this email. These are points our software suggests looking at — it's for a professional to weigh up, not advice to you.
1. Forfeiture can exceed deposit
The contract says if the buyer defaults, the seller can claim the greater of 10% of the price or the deposit, even if unpaid. The price is blank in the particulars, so the exposure cannot be quantified. Worth confirming the price and how this compares to the deposit paid under the contract.
Particulars of Sale, page 7
2. Standard loss or damage protections deleted
General Conditions 31.4, 31.5 and 31.6 are deleted. These would let the buyer hold back part of the purchase money at settlement over damage or defects. Consider whether the seller will accept reinstatement, or whether the buyer can otherwise protect themselves, for example through a pre-settlement inspection.
Particulars of Sale, page 7
3. Late settlement costs are uncapped
If settlement does not happen by 4.00 pm on the settlement date, the seller can claim losses including bridging finance, mortgage interest, accommodation, legal costs and penalties from a delayed purchase. These amounts are not capped. Consider whether the clause should include a cap or a liquidated damages figure.
Particulars of Sale, page 8
4. Asbestos disclosed in outdoor toilet
The vendor's statement discloses asbestos in the outdoor toilet. Special Condition 5 states the buyer accepts the buildings as inspected and cannot claim for defects. Consider whether obtaining an asbestos assessment or clearance certificate is appropriate, and whether the contract should address removal.
Vendor's Statement, Material Facts Disclosure section, page 28
5. Early deposit release treated as title acceptance
Special Condition 6 provides that if the deposit is released to the seller under Section 27, the buyer is treated as accepting title unless title objections have already been raised. This could limit the buyer's ability to raise title issues later. Worth confirming the sequence of deposit release and title examination.
6. Settlement date shift and default notice moratorium
Special Condition 10 automatically sets settlement for 14 January 2025 if not completed by 18 December 2024, and neither party can issue a default notice between those dates. Worth checking this against the contract date and any finance or settlement conditions.
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