The standard Victorian Contract of Sale covers the basic terms of your property purchase. But it's the special conditions — the additional clauses added to the contract — that often determine whether you're protected or exposed. Understanding which conditions to include, and how they work, is essential for every buyer.
What are special conditions?
Special conditions are additional clauses inserted into the Contract of Sale that modify or add to the standard terms. They can protect either the buyer or the vendor, and they are negotiated between the parties before the contract is signed.
In Victoria, the standard form contract is the Law Institute of Victoria / Real Estate Institute of Victoria (LIV/REIV) form. The pre-printed conditions cover the basics, but the special conditions section is where the real negotiation happens.
Essential buyer protections
Subject to finance
This is the most common and arguably most important special condition for buyers. It makes the contract conditional on you obtaining formal loan approval within a specified timeframe (typically 14 to 21 days).
If your finance is not approved within the deadline, you can terminate the contract and receive a full refund of your deposit. Without this condition, you are committed to the purchase regardless of whether your bank approves the loan — and if you cannot complete, the vendor can keep your deposit and sue for damages.
Important: Pre-approval is not the same as formal approval. Pre-approval is a conditional indication; formal approval requires a full property valuation and credit assessment. Never rely on pre-approval alone.
Subject to building and pest inspection
This condition allows you to arrange a building inspection after signing the contract and to terminate if the report reveals significant defects. Typically, the condition gives you 7 to 14 days to complete the inspection.
The clause should define what constitutes a defect that allows you to exit — for example, structural defects estimated to cost more than a specified amount (often $5,000 to $10,000) to repair.
Subject to solicitor's approval
This condition gives your solicitor a specified period (usually 3 to 5 days) to review the contract and Section 32 and either approve or reject the contract. It is particularly useful when you sign a contract quickly (for example, at an open inspection) and haven't had time for a full solicitor review.
Conditions that protect your interests
Sunset clause
A sunset clause sets a deadline by which certain conditions must be met, or the contract can be terminated. They are most common in off-the-plan purchases where the property may not be completed for 12 to 36 months.
Following amendments to the Sale of Land Act 1962in 2019, vendors can no longer use sunset clauses to walk away from off-the-plan contracts simply because property values have risen. A vendor must now obtain either the buyer's written consent or a Supreme Court order to end a contract under a sunset clause. This is an important buyer protection.
Early deposit release
Some vendors request early release of the deposit (before settlement) to fund ongoing construction or other purposes. This carries significant risk for buyers — if the vendor becomes insolvent, you may lose your deposit. If the vendor insists on early deposit release, your solicitor should negotiate protections such as a bank guarantee or deposit bond.
Vacant possession
Unless the property is being sold as a tenanted investment, the contract should specify vacant possession on settlement. This means the property must be empty and free of any occupants, the vendor's belongings, and rubbish.
Conditions to watch out for
- Nomination clause:Allows the buyer to nominate another person or entity to complete the purchase. While legitimate for structuring purposes, it can also be used to “flip” the contract.
- Section 27 waiver: A clause that waives your cooling-off rights. This should only be considered after thorough solicitor review.
- Time of the essence:If settlement dates are stated as “time of the essence,” there is no room for delay without the other party gaining immediate rights to terminate.
Auction purchases: No special conditions
If you buy at auction, you generally cannot include any special conditions — the contract is signed “as is.” This means no subject-to-finance, no subject-to-building-inspection, and no cooling-off period. This is why thorough pre-auction preparation is essential.
Get your conditions right before signing
Special conditions can protect you from financial disaster or lock you into an unfavourable deal. Always have your solicitor review and draft special conditions before you sign. Start with a Pre Contract Review at precontractreview.com to identify the key issues in your contract that may need special conditions — then take those findings to your solicitor for advice.