By Jonathan Tisher

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 a member of our Property Team to discuss your requirements as a purchaser.

Related Articles

View All
Commercial Law / Commercial Contracts & Agreements / Property & Development

Commercial and Industrial Property Tax Reform – What does it actually mean?

The reform will implement change progressively from 1 July 2024 and will look like this: This reform presents an...
Read More
Property & Development / Developments / Real Estate Agents

Property Law Changes – Land tax adjustments, vacant residential tax & windfall gains tax

A prohibition on the ability of a Vendor to pass on land tax liability assessment against a property The current...
Read More
Commercial Contracts & Agreements / Leasing & Lease Disputes / Property & Development

Exercising Options

If a lease is a retail lease, the provisions of the Retail Leases Act (Vic) (2003) will govern the exercise of option...
Read More
Construction / Owners Corporations / Planning

Occupancy permits – the ticking clock in defective building work

Where multiple occupancy permits are issued in relation to a building permit, which permit is the operative permit for...
Read More
Commercial Law / Property & Development / Developments

2023-2024 State Budget Recap

Acquisitions of Commercial and Industrial Properties From 1 July 2024, Land transfer duty (stamp duty) on commercial...
Read More
Adverse Possession / Commercial Law / Family Law

2024 Best Lawyers list out now

Tisher Liner FC Law are proud to announce that this year three of our Principals have been selected by their peers for...
Read More
Property & Development / Planning

The 1, 2, 3 of Property Law Reminders for NY2023

In so reflecting, reflecting on one’s property matters (current or proposed for the future) is also a worthwhile...
Read More
Planning / Property & Development / Construction

Section 9AC of the Sale of Land Act – What does ‘materially affect’ mean?

Throughout the registration period, a Plan of Subdivision may undergo many amendments from the proposed Plan which was...
Read More
Property & Development / Leasing & Lease Disputes / Real Estate Agents

CTRS protections has ended. What do you do now when a tenant defaults?

What can landlords do if a tenant breaches the lease If a tenant is in breach of a lease, the landlord may charge...
Read More
Property & Development

Early deposits. Your FAQ’s answered

This blog explores what is required in order for a Vendor to obtain their deposit prior to settlement and what a...
Read More
Property & Development / Real Estate Agents

Stamp Duty is now payable on late settlement and default penalty interest

The dutiable value of a property is the value in which stamp duty is determined to be due and payable at settlement by...
Read More
Property & Development / Commercial Contracts & Agreements

Market rent reviews under the Retail Leases Act 2003: Applying to the VSBC for the appointment of a Specialist Retail Valuer under the Act

In Part 1 of our blog series, we explored market rent reviews generally This is Part 2 of our 2 part blog series, in...
Read More