By Julia Reid

11 October 2017

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, 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.

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).

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.

Related Articles

View All
Leasing & Lease Disputes / Property & Development / Property & Developers

Commercial Leases – Protect your Property

At the start of a commercial or retail lease, things can often seem to a landlord to be on the up The tenant may have a...
Read More
Leasing & Lease Disputes / Property & Development / Property & Developers

Update – Residential Tenancies Act Reform

The Victorian Government has recently concluded its review of the Residential Tenancies Act 1997 (Vic) (“the...
Read More
Property & Development / Property & Developers / Real Estate Agents

Bushfire Beware!

With bushfires becoming more and more prevalent in the community, measures have been taken to reduce the devastating...
Read More
Owners Corporation / Property & Development / Owners Corporations & Strata

Apartmentites – Guest Insight #1

Owners Corporations are made up of apartment owners In this ‘Apartmentites’ blog, Tisher Liner FC Law’s Nicole...
Read More
Owners Corporation / Property & Development / Property & Developers

Important VCAT Case Update: The Grundl Assessment

New Guidance from VCAT on how Owners Corporations choose the appropriate method for raising Special Levies An important...
Read More
Construction / Litigation & Dispute Resolution / Property & Development

Domestic Building Dispute Resolution – New Regime

The days of VCAT being a first-instance negotiator in Victorian domestic building disputes are coming to an end...
Read More
Leasing & Lease Disputes / Property & Development / Property & Developers

Landlords Beware – Industrial and Warehouse premises can constitute Retail premises

The definition of what constitutes a retail premises has long been a point of contention and uncertainty for landlords...
Read More
Covenants & Easements / Property & Development / Property & Developers

Love Thy Neighbour

Restrictive covenants can often prevent a development from proceeding So, whilst that old house on a huge block may...
Read More
Adverse Possession / Property & Development

Adverse Possession- A Guide to Acquiring Land

1 What is Adverse Possession  Adverse possession is the process whereby title to another person’s real property is...
Read More
Property & Development / Real Estate Agents

Underquoting by Agents: Are you ready for 1 May?

Agents need to get prepared to ensure that they have a compliance process in place to avoid their agency or individual...
Read More
Property & Development / Property & Developers

What to look for when purchasing land

A legal review of the Contract documents will, amongst other things, identify any restrictions affecting the land,...
Read More