When is a land contract considered unconditional?
In Australian house and land sales—especially in the greenfield sector—a land contract is considered unconditional when all conditions in the contract have been satisfied, waived, or fulfilled, meaning there are no further contingencies that would allow either party to withdraw without penalty.
Common Conditions in a Land Contract
- Finance Clause
- The buyer has a set timeframe (e.g., 14 or 21 days) to obtain formal loan approval.
Once formal finance approval is received, the finance condition is satisfied.
Due Diligence Clause (if applicable)
- This allows the buyer to conduct research (e.g., soil tests, legal checks) and withdraw if unsatisfied.
Once the due diligence period expires or is waived, the condition is considered satisfied.
Other Special Conditions
- These may include subject-to-sale clauses, council approvals, or satisfactory land registration (if selling unregistered land).
- These must also be fulfilled or waived.
When Is It Officially "Unconditional"?
A land contract becomes unconditional when the buyer:
- Provides written notice that all conditions (especially finance) are satisfied, or
- Fails to terminate the contract within the allowed timeframes (conditions lapse), and the seller deems the contract to be binding.
Once unconditional, the buyer:
- Is legally obligated to settle, and
- Risks losing the deposit or facing legal action if they fail to proceed.
Key Point for Off-the-Plan (Unregistered Land) Sales
- Even though the land is unregistered and the settlement may be months away, the contract can still become unconditional once all the buyer’s conditions are met (e.g., finance approval), even if the land is not yet ready for settlement.