By Julia Reid

11 October 2017

Alternative Purchasers

When purchasers enter into contracts of sale to purchase property and/or land, they rarely imagine that they will not be able or willing to complete the contract of sale and take possession of their new property.

However, it is possible to nominate alternative purchasers. For a variety of reasons, it can be practical or necessary to nominate a “nominee purchaser” to complete a contract of sale. This may be to avoid personal liability for the obligations set out in the contract of sale, because it is no longer practical for the purchaser to complete the contract of sale, or because another person has offered to complete the contract for a higher price than set out in the Contract.

What to be mindful of

Purchasers considering assigning their obligations under a contract of sale need to be mindful of a number of things when making a decision as to whether to assign the contract of sale to a nominee, for example:

  1. Whether the contract of sale allows nominations, and in what time frame? For example, it is common for contracts of sale to have a special condition which prohibits nomination more than 10 days prior to settlement;
  2. What documentation needs to be executed in order to validly nominate a nominee purchaser? For example, in addition to a standard nomination form, a deed of nomination or a separate contract of sale may need to be entered into in order to formalise any special conditions which have been agreed to; and
  3. Will the nomination attract payment of double stamp duty? This may be relevant where the purchaser is make a profit from the on-sale of the property, or where the land has been developed after the contract of sale was entered into and prior to the nomination (including submitting an application for a planning permit).

Recommendations

We recommend that purchasers obtain legal advice about whether nominating an alternative purchaser under a contract of sale is the right move for them, and how the nomination can best be documented to protect their interests.

 

Contact Julia Reid or a member of our Property Team to discuss your requirements as a purchaser.

Related Articles

View All
Business Law / Construction / Employment Law

September 2018 Newsletter

September 2018 Newsletter See the full newsletter here Welcome TLFC Law are pleased to welcome Min Seetoh to the...
Read More
Property & Development / Real Estate Agents

Unprofessional estate agents need not read this.

Apart from re-arranging some sections, estate agents have additional obligations of professional conduct They include:...
Read More
Property & Development / Litigation & Dispute Resolution

Subpoenas: think twice before pushing the button

In a recent decision of the Supreme Court of Victoria, Brady Queen Pty Ltd and 280 Queen Street Pty Ltd & Anor (No...
Read More
Business Law / Property & Development / Developments

Tisher Liner FC Law finalists in the Australian Law Awards 2018

The 18th annual Australian Law Awards, in partnership with UNSW Law, recognises the outstanding contribution of...
Read More
Litigation & Dispute Resolution / Property & Development / Developments

Rules of Thumb for Purchasing a Property

Good advice is only going to benefit you if you take advantage of it This applies whatever your purpose for the...
Read More
Property & Development / Developments / Owners Corporations & Strata

Landlords – Make sure you get paid!

So what are the tips to get paid Make sure your lease is valid Has there been a renewal since the lease was entered...
Read More
Real Estate Agents / Property & Development

ESTATE AGENT UPDATE – Agents breathe a sigh of relief

A recent case in the Victorian Court of Appeal in Advisory Services Pty Ltd v Augustin held that certain rebate...
Read More
Property & Development / Developments / Real Estate Agents

Developers – Are you ready for 1 July 2018? New GST withholding regime for residential property transactions

From 1 July 2018, the new GST withholding regime requires purchasers of new residential premises or potential...
Read More
Owners Corporation / Property & Development / Owners Corporations & Strata

Considering renovating your apartment? Have you checked you legally own it?

Our population is growing and the construction of higher-density housing is booming Considering renovating If you opt...
Read More
Construction / Property & Development / Construction

Nafsika Palbas Wins Lawyers Weekly 30 Under 30

Entrants for the award were required to demonstrate strong performance in their areas of expertise in conjunction with...
Read More
Owners Corporation / Owners Corporations & Strata / Health & Aged Care

Owners Corporations & Retirement Villages in Victoria

People in Victoria over 55 years of age and who have retired from full time employment, may be eligible to purchase a...
Read More
Australia-Israel Legal Advice / Charities & Not-for-Profit / Technology and Start Ups

TLFC – Award Finalist for Law Firm of the Year (Medium Category)

Tisher Liner FC are proud to be nominated as an award finalist in the 14th annual Victorian Legal Awards Medium Law...
Read More