“That ‘fine print’ nearly cost me everything”
How one Sydney buyer almost lost $50,000 over a sunset clause they didn’t even know existed.
When he agreed to buy a new apartment off the plan in eastern Sydney, he thought he was locked in for a solid deal. But six months later, the developer exercised a “sunset clause” and rescinded the contract. He had already paid a deposit, arranged a home loan, and emotionally committed. He was scrambling and seriously out of pocket trying to force a renegotiation.
This kind of horror story is not rare. In the fast-moving Sydney market, contracts govern when a buyer can back out, how deposits are held, who pays for defects, and even how risk passes. One typo or missing clause can turn your dream into a legal nightmare.
If you’re buying property in Sydney, whether a house, strata unit or off-the-plan development, here are common contract mistakes buyers make, and how to avoid them.
Legal Framing: Contracts are (almost) everything
A contract for sale is more than a formality. It governs your rights, obligations, risks and remedies from exchange through to settlement and beyond. In NSW, the Conveyancing Act 1919 (NSW) and associated regulations impose statutory rules such as cooling-off, rescission, and sunset clauses that interact with your contract terms.
Even more: under NSW law, “caveat emptor” or buyer beware principles apply, meaning you can’t necessarily rely on the seller to fix defects after settlement unless those issues were disclosed or contractually protected.
Thus, a mistake in the contract doesn’t just cost you money. It can lock you into a worse property, leave you exposed to unexpected repairs, or deprive you of your deposit with little recourse.
Top 7 Contract Mistakes Sydney Buyers Must Avoid
1. Failing to insert protective special conditions
Why it’s risky: The standard contract may favour the vendor. Absent special conditions, you may lose rights to back out if, for example, finance falls through, title isn’t clean, or building and pest reports uncover hidden issues.
Tip: Always negotiate and insert conditions such as
- Finance approval condition subject to obtaining loan
- Building and pest inspection condition or an allowance to withdraw if serious defects are found
- Title or encumbrance condition satisfying title searches, easements, caveats
- Sunset extension rights especially for off-the-plan contracts
- Settlement delay conditions or extension rights if statutory or council delays arise
2. Not understanding or underestimating sunset clauses
Why it’s risky: A sunset clause allows the developer to terminate your contract if construction isn’t finished by a certain date. Developers sometimes exploit these to remarket at higher prices.
Tip:
Insist on a deadline extension right or a capital gain-sharing mechanism.
Ensure you get a clause requiring the developer to give notice before they can rescind.
Seek legal advice early when buying off the plan as the timing risks are real.
3. Ignoring cooling-off rights or unconditional provisions
Why it’s risky: In a private treaty sale, NSW law gives buyers a three-business-day cooling-off period subject to a termination penalty. But some contracts may include clauses that waive your cooling-off right which means once you sign, you’re fully committed.
Tip:
Always check the cooling-off clause in the contract.
Avoid auctions unless you understand there is no cooling-off after the hammer falls.
Insist that your cooling-off rights are preserved unless you consciously waive them, understanding the risk.
4. Overlooking title, easement and planning encumbrances
Why it’s risky: Contracts sometimes carry burdens such as easements, covenants, rights of way, or restrictions on use. Worse, some lots may have boundary uncertainties or unregistered claims.
Tip:
Ask for full title searches, plan drawings, zoning documents, and council records.
Check whether there are special planning overlays such as heritage, flood, or bushfire or development proposals nearby.
Confirm all documents are attached to the contract and your solicitor reviews them early.
5. Misallocating risk of defects and dilapidations
Why it’s risky: Unless the contract addresses it, defects or damage discovered post-settlement may become your problem. Sellers may disclaim “as is” condition. Combined with caveat emptor, that can shift hidden costs to you.
Tip:
Obtain a building and pest inspection during your conditional period.
Insert a defect liability period or require the vendor to remediate before settlement.
Ask for warranties or certifications for electrical, plumbing, and structural compliance.
6. Hidden costs or ambiguous payment obligations
Why it’s risky: Contracts can hide obligations. For example, you may be paying for administration fees, adjustments for rates, levies, legal or settlement fees, or underground service relocations. Ambiguous wording may leave you footing unexpected bills.
Tip:
Insist on an itemised list of vendor contributions, adjustments, and who bears which costs.
Clarify the adjustments clause.
Read every clause about reimbursements, apportionments and outgoings.
7. Poor drafting, ambiguous or inconsistent terms
Why it’s risky: Ambiguities invite interpretation disputes later. Conflicting clauses or unclear definitions can hand surprise outcomes.
Tip:
Use plain, precise language.
Check definitions for key terms like completion, settlement, or practical completion.
Ensure clause cross-references are correct.
Ask your solicitor to highlight any inconsistencies or unclear terms.
Strategic Insights and Mistakes You Don’t See
Don’t delay legal review
A late review may mean too little time to negotiate changes before exchange. Always send the contract to your property lawyer or conveyancer before you commit.
Beware underquoting in agency listings
Many sellers in Sydney advertise artificially low guide prices to bait in buyers, then escalate in auction or negotiations. If a listing seems too good to be true, ask your solicitor to check comparables and demand transparency from the agent.
Account for unknown unknowns
Expect and buffer for cost blowouts such as unexpected remediation, infrastructure levies, heritage constraints, or delayed approvals. A strong contract may include a buffer or exit option if things go wrong.
Have exit strategies
Even with your best due diligence, things change. Make sure your contract gives you options such as extension rights, penalty caps, or mutual termination in certain triggers.
Deal with strata overhang early
If buying in a strata scheme, ask to see minutes, sinking fund projections, upcoming major works and special levies. If the contract hides those as future risk, that’s trouble.
How Green & Associates Can Help
At Green & Associates, we specialise in property law and conveyancing in Sydney. Our approach is:
- Proactive contract review that dissects the vendor’s contract for hidden traps
- Risk mapping to identify title, zoning or defect risks before they become costly
- Plain-English advice with clear implications and options
- Post-exchange support for contract-related disputes up to settlement
If you’re about to sign a contract, don’t do it blind. We offer a fixed-fee contract review appointment. Let us make sure your path to ownership is smart, safe and secure.
