Special Conditions in Property Contracts: What You Need to Know

While every Australian property contract includes standard printed conditions, it is the special conditions (also called additional conditions or particular conditions) that are tailored to the specific transaction. Special conditions are negotiated between the buyer and seller and can significantly affect your rights, obligations, and level of protection.

Understanding common special conditions, knowing which ones to request, and recognising those that disadvantage you is essential for every property buyer.

Common Special Conditions

Subject to Finance

A subject to finance condition makes the contract conditional on the buyer obtaining formal loan approval from a lender within a specified timeframe (typically 14 to 21 days). If the buyer cannot obtain finance approval within this period, they can terminate the contract and receive a full refund of the deposit. Read our detailed guide to the subject to finance clause for a complete breakdown.

Key points:

• Specify the loan amount, lender, and approval deadline clearly
• The buyer must make genuine efforts to obtain finance (not just let the deadline pass)
• If finance is approved, the condition is satisfied and cannot be relied upon later
• Some vendors may refuse this condition in competitive markets — waiving it is risky if you depend on a mortgage

Subject to Building and Pest Inspection

This building and pest clause allows the buyer to arrange a professional building and pest inspection within a specified period (typically 7 to 14 days). If the inspection reveals defects that the buyer considers unsatisfactory, they can terminate the contract or negotiate repairs or a price reduction.

Key points:

• Define what constitutes "unsatisfactory" — some conditions use the buyer's sole discretion, others require the defects to be "major structural"
• The broader the definition, the more protection the buyer has
• Arrange the inspection as early as possible to avoid missing the deadline
• Keep the full report — it may be relevant for insurance or future renovations

Subject to Sale of Existing Property

This condition makes the purchase conditional on the buyer selling their current property within a specified timeframe. It protects buyers who need the proceeds from an existing sale to fund the new purchase.

Key points:

• Vendors are often reluctant to accept this condition as it introduces uncertainty
• The vendor may include a "kick-out" clause, allowing them to accept another offer and give you a short period (typically 48-72 hours) to waive the condition or terminate
• Ensure the timeframe is realistic for selling your property

Sunset Clause

A sunset clause sets a final deadline by which settlement must occur. If settlement has not occurred by this date, either or both parties may have the right to terminate the contract. Sunset clauses are most common in off-the-plan purchases, where the development may take months or years to complete.

Key points:

• Check whether the sunset clause allows the vendor to terminate — this is a significant red flag in off-the-plan contracts
• NSW and VIC have legislative protections requiring court or tribunal approval for vendor-initiated sunset terminations
• The sunset date should be reasonable given the nature of the transaction

Early Access or Pre-Settlement Occupation

An early access condition allows the buyer to enter the property before settlement for specific purposes, such as taking measurements, arranging renovations, or moving in early. Less commonly, it may allow the vendor to remain in occupation after settlement (a licence to occupy).

Key points:

• Early access does not transfer ownership — risk and insurance obligations must be clearly allocated
• If the buyer moves in before settlement and the sale falls through, complications arise
• Any early access should be documented with clear terms about liability, insurance, and the scope of permitted activities

Nominee Clause

A nominee clause allows the buyer to nominate a different person or entity to complete the purchase before settlement. This is commonly used when a buyer intends to purchase through a trust, company, or self-managed super fund (SMSF) but signs the initial contract in their personal name.

Key points:

• Check whether stamp duty implications apply to the nomination (in some states, a nomination triggers double stamp duty)
• The nominee must be identified before settlement
• Some vendors restrict or refuse nominee clauses to prevent contract flipping

Deposit Bond or Guarantee

Instead of paying a cash deposit, the buyer provides a deposit bond or bank guarantee for the deposit amount. This allows buyers to preserve their cash until settlement while still securing the property.

Key points:

• Not all vendors accept deposit bonds — it must be agreed as a special condition
• Deposit bonds have an expiry date that must extend beyond the settlement date
• If the buyer defaults, the vendor can call on the bond to recover the deposit

Repairs or Works to Be Completed

If the building inspection identifies defects, or if the vendor has agreed to complete certain works before settlement, this should be documented as a special condition. The condition should specify exactly what work is required, the standard to which it must be completed, who pays for it, and the deadline.

Inclusions and Exclusions

While the standard contract lists general inclusions (fixtures and fittings), a special condition can specify additional items to be included (such as furniture, appliances, or outdoor equipment) or excluded from the sale. If the vendor showed the property with specific items you want included, list them explicitly.

How Special Conditions Vary by State

Related Guides

• Property Contract Red Flags — Warning signs to watch for in any Australian property contract.
• How to Read a Property Contract — Step-by-step guide to understanding every section of an Australian property contract.
• Property Due Diligence Checklist — The complete checklist for investigating a property before purchase.
• First Home Buyer Guide — Complete guide to buying your first home in Australia.