A sale starts with the contract, not with the sign out the front.
We prepare the contract for sale, order the documents that must be attached to it, negotiate the terms with the purchaser’s solicitor, and carry the sale through exchange to settlement.
A sale in New South Wales does not begin with an agent or a price. It begins with a contract, because an agent cannot offer residential property for sale until one exists.
The contract comes before the marketing
Under section 63 of the Property and Stock Agents Act 2002 (NSW), an agent must not offer residential property for sale unless a copy of the proposed contract is available for inspection. In practice that makes the contract the first thing prepared rather than the last, and a vendor who instructs an agent before instructing a lawyer can spend the opening weeks of a campaign waiting on a council certificate.
Documents that must be attached
Section 52A of the Conveyancing Act 1919 (NSW) and the regulation made under it prescribe documents that must be attached to a contract for the sale of residential land before the purchaser signs it. They ordinarily include:
- a copy of the folio of the register for the land, and the plan that created the lot;
- copies of the documents creating any easement, restrictive or positive covenant, or restriction on the use of the land noted on the title;
- a planning certificate for the land issued by the council under section 10.7 of the Environmental Planning and Assessment Act 1979 (NSW);
- a diagram showing the location of the sewer lines serving the land;
- where there is a swimming pool or spa, the registration and compliance documents required under the Swimming Pools Act 1992 (NSW); and
- for a lot in a strata scheme, the registered strata plan and the by-laws in force for the scheme.
An omission is not a technicality. Where a prescribed document has not been attached, the purchaser may have a right to rescind the contract for a limited period after exchange. The certificate nobody chased at the start of the campaign is the one that can undo the sale after it is made.
Since 1 January 2025 there is no price threshold on foreign resident capital gains withholding. For contracts entered into on or after that date, a vendor who does not give the purchaser an Australian Taxation Office clearance certificate by settlement will have 15% of the price withheld and paid to the ATO, whatever the property sold for. There is no fee for the certificate, but it is not always issued quickly.
Two things to start on day one
The clearance certificate. The application goes in with your contract instructions, not the week before completion.
The mortgagee. If the property is mortgaged, the lender has to be asked to prepare a discharge, and lenders work to their own timetable. New South Wales cancelled paper certificates of title on 11 October 2021, so there is no longer a document to find in a drawer; where the land is mortgaged, the lender holds control of the right to deal on the title and its consent is part of the settlement.
Price, special conditions and exchange
Once a purchaser is found, the negotiation is not only about price. The deposit, the completion period, inclusions, access before completion and any request for a certificate under section 66W of the Conveyancing Act 1919 (NSW), which brings the purchaser’s cooling-off position to an end, are all negotiated between the two solicitors, and each of them is worth something. Exchange occurs when the two signed counterparts are exchanged and dated; the deposit is ordinarily paid at that point. From then the sale binds both parties, subject to any cooling-off period available to the purchaser.
Between exchange and settlement
The discharge authority goes to your lender. A land tax clearance certificate is obtained under the Land Tax Management Act 1956 (NSW), because unpaid land tax is a charge on the land and a purchaser will not complete without one. Council rates, water rates, strata levies and land tax are adjusted between the parties as at the completion date. Where the sale is of new residential premises or potential residential land, GST withholding can apply and the vendor has a notice obligation to the purchaser under the Taxation Administration Act 1953 (Cth). That is worth raising early on a development sale rather than at settlement.
Practically: arrange your utility disconnections at least two weeks ahead, hand over every set of keys, remotes and security fobs, and leave the property in the condition the contract requires. Settlement is conducted electronically, and where an agent holds the keys they are released once completion is confirmed.
Questions sellers ask us.
Can the agent start marketing before the contract is ready?
Not for residential property in New South Wales. Section 63 of the Property and Stock Agents Act 2002 (NSW) prevents an agent offering residential property for sale unless a copy of the proposed contract is available for inspection. That makes contract preparation the first step in a sale, not a step that runs alongside the campaign.
What happens if a required document is left out of the contract?
It is not a technicality. Where a prescribed document has not been attached to a contract for the sale of residential land, the purchaser may have a right to rescind the contract for a limited period after exchange. That is why the certificates are ordered at the start, when a delay costs time on the campaign, rather than late, when the same gap can cost the sale itself.
Do I need an ATO clearance certificate even though I am an Australian resident?
Yes, if you want the full price at settlement. For contracts entered into on or after 1 January 2025 the foreign resident capital gains withholding rules apply regardless of price — the former threshold is gone. A vendor who does not give the purchaser a clearance certificate by settlement will have 15% of the price withheld and remitted to the Australian Taxation Office. There is no fee for the certificate, so apply early.
I cannot find my certificate of title. Is that a problem?
No. New South Wales cancelled paper certificates of title on 11 October 2021, so there is no longer a paper document to produce at settlement. Where the land is mortgaged, your lender holds control of the right to deal on the title and its consent forms part of the electronic settlement. Where there is no mortgage, no lender consent is required.
What is adjusted at settlement?
Council rates, water rates, strata levies and land tax are apportioned between vendor and purchaser as at the completion date, so each party pays for the period they own the property. A land tax clearance certificate under the Land Tax Management Act 1956 (NSW) is obtained as part of that, because unpaid land tax is a charge on the land itself.
Tell us what's happened.
Tell us the address, whether it is mortgaged, and whether there is a pool or a strata lot — we can tell you what will need to be ordered and how long the certificates usually take, and you will have a costs figure in writing before any work starts.
Information on this site is general in nature and is not legal advice, and may have been overtaken by a change in the law. Contacting us does not create a solicitor–client relationship.