Clauses Made Simple (3rd Edition)

Property contracts expert and practising solicitor Robert Balanda, has launched his latest industry guide - Clauses Made Simple (Third Edition) - a must-have resource for real estate professionals and legal practitioners specialising in residential and commercial property.

 

Clauses Made Simple is a compilation of 450 road tested clauses in simple English that have been used successfully by solicitors in Real Estate and Business transactions. The book has been written by a practising solicitor with over 30 years experience to assist industry professionals involved directly and indirectly in the preparation of Contracts of Sale. Contributions by specialist solicitors on Town Planning, Management Rights, Hotels and Motels make this latest edition the “go-to-guide” for property professionals.

 

This comprehensive catalogue of sample clauses is based on real life experiences and is the ideal reference guide for those involved in real estate transactions of all kinds. “Clauses Made Simple” has now become the industry standard.

 

Contents

 

Residential Land, House & Unit Sales

 

Chapter 1

 

Vendor Finance and Other Finance Matters

 

1. Seller Finance – First Mortgage                                                                                   

2. Seller Finance – Second Mortgage                                                                                   

3. Shortened Finance Clause                                                                                               

4. Subject to Seller Obtaining Finance Approval to Purchase Another Property           

5. Subject to repayment of loan monies to the Buyer                                                           

6. Seller to subsidise Purchaser’s loan repayments                                                           

7. Subsidy of Buyers others costs                                                                                   

8. Finance – evidence you applied for it                                                                                                                                                                       

Chapter 2

 

Deposits and Commission

 

1. Payment of Deposit by Instalments                                                                       

2. Payment of Deposit                                                                                                           

3. Release of Deposit to Seller                                                                                   

4. Release of Deposit to Allow Seller to Purchase Another Property                       

5. Consent Caveat                                                                                                           

6. Guarantee That Property Not Encumbered                                                                       

7. Payment of Deposit Into Interest Bearing Account                                               

8. Balance Purchase Price Paid by Lodgment of Guarantee                                               

9. Guarantee that Sale Not Caught by Sole Agency                                                           

10. Deposit Paid by Bank Guarantee to the Seller                                                           

      (No Money Held by Agent to Pay Commission)

11. Bank Guarantee in place of deposit                                                                       

12. Appointment of Agent clause                                                                                   

13. Deposit Not Enough to Cover Agent’s Commission                                               

14. Alternative clause                                                                                                            50

15. Guarantee by Seller of Accuracy of Material Supplied by Agent                          

16. Disclosure to Buyers regarding accuracy of material supplied by seller                                                                       

Chapter 3

 

Guarantees – Personal, Rental & Others

 

1. Director’s Guarantee                                                                                               

2. Seller Guarantee Rental Until Property Let                                                           

3. General Rental Guarantee                                                                                               

4. Guarantee of Authority to Sign                                                                                   

5. Financial Check of Company Providing Rental Guarantee                                   

6. No Contract Until Provision of Directors Guarantees                                               

 

Chapter 4

 

Council matters and Development Approvals

 

1. Subject to Outcome of Meeting with Council Officers and then Building            

Approval

2. Access to Site for Preliminary Site Inspection                                                           

3. Integrated Planning Act & Sustainable Planning Act                                               

4. Subject to Local Authority Consent to Use                                                           

5. Subject to Council Approval of Plans                                                                       

6. Subject to Re-Zoning                                                                                               

7. Repayment to Buyer for Costs of Plans and Town Planning Application                        

8. Transfer of the benefit of various works, plans, approvals and other matters           

to the Buyer

9. Development Approval                                                                                               

 

Chapter 5

 

Leases and Tenancies

 

1. Seller to remain as tenant after settlement                                                                        82

2. Alternative Clause                                                                                                           

3. Buyer to take possession before completion and after tenant vacates                       

4. Option to take a Lease                                                                                               

5. Annual rent and reviews of rent                                                                                   

6. Tenancy Agreement in place by settlement                                                           

7. Copy of Lease                                                                                                           

8. Seller to remain in possession after settlement under Licence (and not                        

Lease)

 

 

Chapter 6

 

House and Land Packages

 

Builder’s House and Land Package                                                                                   

 

Chapter 7

 

Sale of Unregistered Land

 

1. Sale of Vacant Unregistered Land                                                                                   

2. Subject to Registration – Alternative Clause                                                           

3. Sale of vacant unregistered land contain on a Plan of Survey of five blocks           

or less

 

 

 

 

 

Chapter 8

 

Sale by Deceased Estate

 

1. Sale by Executor Where Deceased Has Made a Will

2. Sale by Administrator (Where Deceased Dies Without a Will)

3. Subject to Registration of Record of Death

4. Variation of Clause “Subject to Registration of Record of Death”

 

Chapter 9

 

Inspection, Building Covenants and Building Maters

 

1. Guarantee that House Constructed by a Registered Builder

2. House Constructed by Owner Builder

3. Inspection for Termites

4. Subject to Building Inspection

5. Inspection for Termites and Pests

6. Maintenance of Property

7. Maintenance of Appliances

8. Alternative Clause

9. State of Property on settlement

10. Building on the lands and development of the lands

11. Inspection of the Property

12. Right to construct a pool prior to settlement

13. Subject to Buyer satisfying itself that it can build five units on a block

14. Building Covenants

15. Seller to carry out building work

16. Seller to carry out building work before settlement and monies to be retained

17. Notice issued under the Building Act

18. Delivery of Council Approval Plans

 

Chapter 10

 

Trades

 

1. Simultaneous Settlement Clause

2. Part of Price to be Paid by Transfer of Car

 

Chapter 11

 

Mortgage Sales

 

1. Capacity of Seller

2. Mortgages, Caveats or Writs

3. Release of Mortgage

4. Terms of Contract

5. Property Purchased As Is

6. Mistakes, errors and survey

7. Dividing Fences

8. Buyers Enquires and Investigations

9. Entire Agreement

 

Chapter 12

 

Units and Body Corporate Matters

 

1. Failure to Operate Body Corporate

2. Seller to Provide Figures

3. Taking Possession of Unit Prior to Completion (Sale Off the Plan)

4. Use of Car Space

5. Exclusive Use Rights

6. Standard of Construction and Fittings in a New Property

7. Certificate of Classification

8. Voting Rights of Developer in New Body Corporate

9. Depreciation Schedule for Taxation Purposes

10. Advanced Booking

11. Body Corporate Inspection Search

12. Security for Body Corporate Liability

12A. Alternate Clause for Security for Body Corporate Liability

13. Committee Approval for Renovations

14. Approval of Family Pet

 

Chapter 13

 

Surveys, Soil Tests & Investigations

 

1. Due Diligence

2. Access to Site to Carry Out Tests and Investigations

3. Encroachment

4. Survey and Inspection

5. Soil Test

6. Flooding

7. Right to conduct a survey but with limited rights

8. Right to conduct legal due diligence – but with contract not subject to it

9. Environmental Check

10. Fire Safety

 

Chapter 14

 

Buying Units “Off the Plan”

 

1. Building defects

2. Additional works

3. State of Unit and Scheme

4. Additional Special Conditions for unit “on sale” contract

5. Representation on Views

6. A twist to protection yourself regarding the quality of the unit

 

 

Chapter 15

 

General Clauses

 

1. Work to be carried out before settlement

2. Subject to procuring a Contract of Sale for another property

3. Subject to settlement of the sale of another property

4. Early settlement clause

5. Instalment contract

6. Sale of property where the seller is not yet the registered owner

7. Subject to the Seller procuring other contracts

8. Subject to another contract on the same property not proceeding

9. Property Affected by Resumption

10. Manufacturer’s Warranties

11. Offer to Purchase

12. Taking Possession Prior to Settlement

13. Solicitors Approval

14. Carpet Clean

15. Foreign Investment Review Board Approval

16. Facsimile Copies of Contract

17. Right of Sellers to Make a Contract Unconditional if they Secure a Better Offer (Alternative One)

18. Right of Sellers to Make a Contract Unconditional if they Receive a Better Offer (Alternative Two)

19. Counterpart Condition

20. Confidentiality Clause

21. Alternative Confidentiality Clause

22. Subject to Outcome of Family Court Proceedings

23a. Subject to Purchaser Satisfying Itself Regarding the Terms of the Easement

23b. Access Easement

24. No-Representation Clause

25. Purchaser purchases the property “as is”

26. Fitting the Security Screens and Vertical Blinds

27. Land Tax

28. Sale by Receiver

29. Fixtures and Fittings Sold “As Is”

30. Limitation of Sellers Liability Where Seller is a Trust

31. Grease Traps and Septic Systems

32. Cleaning of House

33. Nominee

34. Access by the Buyer for marketing for sale or rental

35. Agreement to do and Sign Whatever is Necessary to Achieve Purpose of the Contract

36. Severance Clause

37. Disclaimer

38. Keep Lands Clear

39. Buyer Accepts Fences “As Is”

40. Body Corporate Levies Payable by Developer

41. The Savoy Clause

42. Responsibility for abandoned items

43. Force Majeure

44. Right of first refusal (from a Developer)

45. Right of first refusal (from others)

46. Power of Attorney

47. Trustee Warranties

48. Insurance

49. Death or Insolvency of Buyer

50. Risk

51. Good Faith

52. Interpretation

53. Marina Berths

54. Sellers right to terminate

55. Subject to valuation

56. An alternative approach to the valuation

57. Internet Connection

58. Possession under Licence

59. Passing of Defects Liability of Builder to Buyer

60. How watertight are sole agencies

 

 

Commercial and Business Contracts

 

Chapter 16

 

Deposits and Commission

 

1. Payment of Deposit by Instalments

2. Delayed Payment of Deposit

3. Payment of Deposit Into Interest Bearing Account

4. Desposit Not Enough to Cover Commission

5. Commission Payable on Sale of Freehold Property on Which Leasehold Business Operates

6. Guarantee by Seller of accuracy of material supplied by agent

7. Disclosure to Buyers regarding accuracy of materials supplied by Seller

 

Chapter 17

 

Leases and Licences

 

1. Payout of Lease

2. Purchaser to be satisfied with the Terms of Existing Lease (alternative clause to Standard Condition)

3. Contract Subject to Purchaser Being Satisfied With Terms  of Leases and  Other Service Contracts

4. Grant of New Lease (alternative to Standard Condition)

5. Grant of new Lease

6. Guarantee by Vendor that Lease is Registered

7. Lease Terms to be Approved  by Purchaser if Vendor Delivers Signed Copy of Lease

8. New Lessee to Replace Bond

9. Purchaser Satisfied with Terms of Lease

10. Licensing of Software

11. Transfer of Lease by a company associatied with the Vendor

12. Subject to Lease Back

13. Purchaser to Execute Deed to Covenant to Protect Lease

14. Rent Review

15. Seller to arrange for Lease to be varied

16. Release of outgoing Tenants and Guarantors under Lease

17. Release of Seller and Guarantors under plant and equipment Lease

18. Annual rent and reviews of rent

19. Tenancy Agreement

20. Copy of Lease

21. Grant of Food Licence

 

Chapter 18

 

Stock, Plant and Equipment

 

1. Acknowledge that Certain Items Not Included in Sale

2. Maintain Plant in Good Working Order

3. Maintain Stock Where Sale is “Walk In, Walk Out”

4. Maintenance of Stock to a Minimum Value

5. Stock to Exclude Second Hand or Used Goods

6. Fixtures and Fittings Sold With All Faults

7. List of Plant and Equipment to be Supplied by Vendor

8. Evidence to Supplied that Vendor is Owner of Plant

9. Payout of the PABX

 

Chapter 19

 

Motels

 

1. Property Adversely Affected

2. Forward Bookings

3. Referral Group

4. Deed of Consent / Right of Entry

5. FIRB Approval

6. Managament of the Business

7. Occupanices

8. Right of First Refusal

 

Chapter 20

 

Hotels

 

1. Transfer of Liquor Licence

2. Gaming Machine Licnce

3.  Detached Bottleshop

4. Completion and Settlement

5. Warranties

6. Guest Contracts

7. Jackpots

8. TAB

9. Keno

10. Designated Outdoor Smoking Area

 

Chapter 21

 

Liquor Licence

 

1. Subject to Search of Licence

2. Subject to Transfer of Licence

 

Chapter 22

 

Employees of Business

 

1. Employment of Manager After Settlement

2. Introduction of Staff to Purchaser Once Finance Approved

3. Vendor to Promote Purchaser to employees

4. Vendor to supply details of employees

5. Contracts with Sub Contractors (Drivers)

6. Engagement of Staff

 

Chapter 23

 

Solicitor’s Approval

 

1. Approval of Purchaser’s Solicitor

2. Approval of Vendors Solicitors

 

Chapter 24

 

Franchise Matters

 

1. Approval of Franchise Agreement

2. Subject to Franchisor’s Consent to transfer of Franchise

3. Subject to Franchisor’s consent to appointment of Purchaser as Franchisee

4. Purchaser to enter into new Agreement with Franchisor

5. Release of Vendor from current Franchise Agreements

 

Chapter 25

 

Council & Government Matters

 

1. Lawfulness of the Business

2. Purchaser acquires the business “as is”

3. Vendor Warrants only that there are no Unsatisfied Requisitions up to the Date of the Contract

4. Chair Licences and other Government approvals

Chapter 26

 

Mangaement Rights

 

1. Body Corporate Approval of Pet

2. Vendor to Put Certain Motion to Body Corporate in General Meeting

3. Subject to Body Corporate Approval of Motions in General Meeting

4. Extension of Restraint of Trade

5. Verification of Likely Profit of Business

6. Subject to Purchaser Verifying Details of Furniture Package

7. Tuition and Marketing Advice to be Provided by the Vendor

8. Contemporaneous of Completion

9. Stock in Shop Included in the Sale

10. Employees of the Business

11. Accuracy of Figures, Records, and Information

12. Vendor to the Transfer Management of Units Owned by It

13. Due Diligence

14. Subject to Lender’s Due Diligence

15. Confidentiality

16. Purchaser to be Satisfied with the Terms of Powers of Attorney Granted to the Developer

17. Purchaser to be Satisfied with Terms of Rental Guarantee

18. Guarantee that Office on Title

19. Lease Backs

20. Wholesaler/Airline Program

21. GST Existing Complexes

22. Forward Booking of Investment Units

23. Profitability of Meal Service

24. Calculation of Purchase Price

25. Multiple Body Corporate

26. Grant of new Caretaking and Letting Agreement

27. Income Verification

28. Placement by Committee to item on Agenda to next AGM Grant of new Agreements.

29. Units owned by current Manager

30. Failure to obtain Body Corporate consent to the Assignment of the Caretaking Agreement and the Letting Agreement

31. Purchaser’s meeting with the Body Corporate

32. Extension of Agreements

 

Chapter 27

 

Buying Management Rights Business “Off the Plan”

 

The Lure of Buying Management Rights Off the Plan

General Comments

1. Commencement of Continuous Construction

2. Name of the Complex

3. Staged Developments

4. Equipment to be Provided to the Manager

5. Signage

6. Storage and Office Areas

7. New Manager to be Introduced as the Sole Letting Agent

8. Furniture Packages

9. Access to the Property

10. Number of Units in the letting Pool

10.a. The Buyer’s Position

10.b. The Developer’s Position

11. Capital Compensation

12. Income Compensation

13. Additional Clauses for Contract to buy Agreements off the Plan

14. Units Unsold Owned by Developer

15. Rental Guarantees

16. Settlement Date

17. Standard of the Units and Fittings

18. Accommodation Module

19. Managers Salary

20. Plans and Details of the Manufactures and Tradesmen

21. Office and Reception on Title

22. Garbage and Access by Garbage Contractors

23. Shop & Kiosk

24. Buying units in your own complex

25. Lot Entitlements

26. Security

27. GST on the sale of Management Rights ‘Off the Plan’

28. Managed Investment Act

29. State of unit and scheme

30. Cleanliness of unit of condition of scheme

31. Standard of fixtures and fittings

32. Staged Development

33. Units fit for occupancy

34. Retention Amount

 

Chapter 28

 

Video Stores

 

1. Documentation and confidential Information

2. Order of new release videos

3. Late hire penalties

4. Sale of videos by vendor

5. Rebates by video suppliers

6. Vendor to supply list of titles and numbers of videos and games

7. Transfer of licence for software

 

Chapter 29

 

Sale of Real Estate / Rent Roll Business

 

1. Sale to include all computer software, books and records.

2. Transfer of rent roll

3. Forwarding of new management agreement and letter of introduction

4. Commission on sales made before contract date

5. Purchaser to advise agents and solicitors of sales

6. Introduction of Buyer to owners and Commission

7. Rental Commissions

8. Rental Bonds

9. Indemnity – Mutual

10. Transfer of additional rental properties

11. Surety account

12. Rent roll list (properties excluded)

 

Chapter 30

 

Newsagencies & Sub Newsagencies

 

1. Publishers

2. Golden Casket

3. Training Course

4. Gold Lotto

5. Bill Express

 

Chapter 31

 

Restraint of Trade

 

1. Extension to Restraint of Trade Clause

2. Restraint of Trade Not to Apply to Certain Matters

3. Restraint of Trade from People Other than the Vendor

 

Chapter 32

 

1. GST and Business Sales

 

General Comments

1. Sale of Business as a Going Concern

2. Sale of Commercial Property Where the Sale is Part of the Sale of a Going Concern

3. Sale to be GST Inclusive

4. Sale to be GST Exclusive

5. Sale of the Business Where the Sale is Not the Sale of a Going Concern

 

2. GST and Real Property

 

General Comments

1. Sale of Commercial Real Estate

2. The Margin Scheme

3. Residential Premises

4. Dispute Resolution

5. Management Rights

6. Some Practical Comments about GST

Chapter 33

 

Service Stations

 

1. Service Station

2. Fuel Tanks

3. Environmental Protection Act

4. Acknowledgment regarding storage of petroleum products

5. Environmental Protection Act – Limitation of Seller’s Rights

 

Chapter 34

 

General Clauses

 

1. Subject to Sale of Another Property

2. Early Settlement Clause

3. Inspection of Business

4. Offer to Purchase

5 Executing Facsimile Copy of Contract

6. Counterpart Condition

7. Part of Price to be Paid by Transfer of Car

8. Subject to Right to Import

9. Transfer of P.O. Box

10. Subject to Check of Books and Records

11. Transfer of Advertisments to Purchaser

12. Right of First Refusal

13. Cancellation of Vendor’s advertising from completion

14. Adjustment of monies paid in advance for advertising

15. Back up Contract

16. Vendor acting in Trustee Capacity

17. Guarantees by Directors of Company Vendor

18. Vendor to deliver statement of written down value of plant and equipment

19. Sale of gymnasium

20. Chemist shops

21. Entire Agreement

22. Child Care Centre

23. Confidentiality Agreement by Potetial Buyer

24. Confidential Information Disclosed During a Trial of the Business

25. Work in Progress

26. Consultancy by Vendor following settlement

27. Due Diligence

28. Vendor Company to Change Name

28.a. Change of Corporate Name

29. Vendor consents to use business name

30. Suppliers – Continuity of supply

31. Signage

32. Accuracy of profile supplied by broker

33. Grant of Second Hand Dealer’s Licence

34. Asbestos

35. Trustee Warranties

36. Right of refusal to buy freehold upon which business operated

37. Insurance

38. Seller’s right to terminate

39. No Litigation

40. Management of the Business

41. Requisition and Retentions

42. Satisfaction by Buyer of stock level and stock merchantability

43. Plant equipment & appliances to be in good working order

44. Privacy Act

45. Your last move