Disclaimer: These comments are the writer’s own and do not necessarily reflect the current opinions and policies of the Real Estate Institute of Western Australia.
REIWA has made changes to the standard contracts agents and their sales staff use when selling property by private treaty or open negotiation. The Offer and Acceptance (O & A) document used together with the Joint Form of General Conditions for the Sale of Land (General Conditions) are used on almost every occasion to form the contract between buyer and seller (the disgraced Purple Bricks don’t use them) and for good reason. The General Conditions are crafted in conjunction with the Law Society who do the bulk of the work in drafting the 20 pages of content. Hundreds of thousands of contracts have been successfully finalised using these documents in WA without incident.
The last major change to the General Conditions was back in 2011. The latest revision has been completely re-drafted although the bulk of the changes are minor re-scripts rather than major changes. Most noteworthy changes include the provision to enable buyers to return to a property to check that warranties given by the seller prior to settlement have been attended to. The 2011 General Conditions allowed the buyer one inspection within five business days prior to settlement. Occasionally, at that final inspection, the buyer would discover the seller had failed to comply with certain warranties such as make prescribed repairs to the property but with no contractual provision to re-visit the property to check if the works had been done prior to settlement. This has been fixed in the latest revision although the second final inspection is there purely to check on warranties to be performed. It is not for the purpose of looking for any other issues.
The other useful change is to enable buyers and sellers to include their email addresses on the O & A thereby permitting the service of notices (when used with the new General Conditions) by electronic means. Prior to this, parties to the contract would have to serve notices by ordinary mail, by fax (when do you last use one of these!) or by hand which was slow and cumbersome. The new form also allows for electronic conveyancing and tries to define what happens when a seller fails to comply with a warranty at settlement.
It is not uncommon for the buyer to attempt to hold up settlement on the grounds of minor faults discovered at a final inspection. The latest General Conditions now states that unless a failed warranty materially affects the use of the land, it’s not sufficient to affect settlement.
There is also no longer a need to witness a buyer and seller’s signature on the O & A as it’s not considered a Deed which allows for the use of electronic signatures making it easier for those located elsewhere to buy and sell property.
Your preferred, local REIWA member agent will be able to explain the new documents to you next time you buy or sell.
by Hayden Groves
REIA Deputy President