14 October 2016
We have a special condition in a contract of sale which requires the purchaser to pay $350 to the vendor's solicitors for their costs in advising in relation general condition 18 whereby the purchaser nominates an additional purchaser.
Are the vendor's solicitors allowed to do this? Does the purchaser have to pay this amount?
Thank you for the question.
Section 42(3) of the Property Law Act 1958 prohibits such charges:
(3) No contract of sale relating to land shall contain a clause or condition stipulating for the payment by the purchaser to the vendor or to the legal practitioner or conveyancer of the vendor of any costs and expenses except—
(a) costs and expenses incurred by the vendor by reason of default on the part of the purchaser in respect of the observance or performance of any of the terms or conditions of the contract...
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