How Property Owners can walk away from
sale options if the paperwork is not right
The good news for you (and the bad news for the buyer) is
that if the option document does not strictly comply with
the Conveyancing Act (NSW) then the owner can walk away from
the option and keep the property. Not only that, the owner
can keep the option fees the buyer has paid.
The Conveyancing Act compliances are: the option document
must have a full copy of the contract attached to it, with
all property searches, it must not be able to be exercised
within 42 days, must have a cooling off notice in it and
there must be a copy signed by the owner exchanged for a
copy signed by the buyer. Note: this applies in NSW only.
In a recent decision, in which I acted for the property
owner, the Supreme Court of New South Wales agreed that not
one but two options were validly rescinded because of
non-compliance with the Conveyancing Act. Not only did the
property owner keep the properties – which had increased in
value in the 3 years since the options were granted, but she
kept the payments the buyer had made in the meantime.
It goes without saying that buyer must be super-careful
to ensure that the option strictly complies with the
Conveyancing Act or risk losing the property and the option
If you would like to read my summary of the decision,
Is it fair for a vendor to rescind a
non-compliant property option and keep the payments
rentvesting or rent to own the best way to get into the
Renvesting is renting for $600 per week a home where you
want to live in Sydney or Melbourne and at the same time,
investing in a rental property where it makes sense.
Instead of paying $1,000 pw in loan repayments to buy a
$1 million apartment: