June 9, 2006

You Will be Bound

Posted in contracts, real estate at 6:11 am by thelawthoughts

I noticed that when I made an offer on a flat the other day, the real estate agent told me it had to be in writing for the vendor to accept it. No problems, I thought, send me over your forms and I will write in my offer.

Problem was, I suffered a shock like those detailed here by The Australian Real Estate Blog. Instead of some form with a space for my 'in writing offer', I got the front page of the contract note. Further, it had the subject to finance clause deleted. The agent expected me to sign the contract note, fax it back, and be contractually bound if the Vendor 'accepted' the offer and signed.

Apparently this happens all the time. I was expected to sign a contract, which I was not given the opportunity to read, without the protection of a back out clause should I not like it. Not only that, they would not submit my offer to the vendor unless it was by way of the contract note. In other words, I had no opportunity to buy the flat unless I was willing to sign a contract which I was not allowed to read.

My solicitior said this was common practice and that I couldn't do anything about it. What a ludicrous situation this is, where the Vendor could have any contractual term it wanted in the Special Conditions to the standard form contract note, and my signature would be on the front. If you won't take this chance, you can't buy the property! 

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