In Western Australia, residential property sales are conducted using the standard REIWA Contract for Sale of Land. This document outlines the rights and obligations of both buyer and seller from acceptance of offer to settlement. Understanding it — and having the right conditions in place — protects you throughout the transaction.
What the Contract Contains
The REIWA standard contract covers the essential details of the transaction including the parties, property, price, deposit, settlement date, and conditions. Key sections include:
- The Offer and Acceptance (O&A) — the binding front page summarising the key terms
- General conditions — standard terms covering settlement, possession, and risk
- Special conditions — specific terms added by the parties (e.g., subject to finance, building inspection)
- Chattels and fixtures — items included in or excluded from the sale
- Settlement date and time — when legal ownership transfers
Common Special Conditions
Special conditions protect the buyer's interests. They suspend the contract being unconditional until certain criteria are met. The most common are:
- Subject to finance — the buyer has a set period to obtain formal finance approval. If finance is not approved, the buyer can terminate with their deposit returned.
- Subject to building and pest inspection — the buyer may terminate if a defect is found within the specified period.
- Subject to sale of buyer's property — the sale proceeds only if the buyer sells their own home first.
- Subject to title search — allows the buyer time to inspect the property's title for encumbrances.
Deposit and its Protection
The deposit (typically 5–10% of the purchase price) is held in a trust account by the selling agent or settlement agent. It is not released to the seller until settlement. If a condition is not met and the contract is terminated legitimately, the deposit is returned to the buyer. If the buyer defaults on an unconditional contract, the seller may retain the deposit.
Risk and Insurance
Under the standard REIWA contract, risk passes to the buyer on the contract date (not settlement). This means you should arrange building insurance from the day your offer is accepted. Don't leave this to settlement day.
Settlement
Settlement typically occurs 30–60 days after the contract becomes unconditional. At settlement, your settlement agent arranges payment of the balance purchase price to the seller and registration of the transfer at Landgate. On the settlement date, you are entitled to keys and possession of the property.
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Frequently Asked Questions
Yes. Settlement date is agreed between buyer and seller in the contract. Standard WA settlement periods are 30–60 days, but you can negotiate shorter or longer periods to suit both parties. Discuss your timing needs clearly with your agent.
Once a contract is signed by both parties, it is legally binding. If a seller attempts to withdraw from an unconditional contract, the buyer may take legal action to force the sale (specific performance) or claim damages. This is rare but does occur.
While not legally required in WA, having your settlement agent or a property lawyer review the contract — especially special conditions — is strongly recommended for high-value or complex transactions.
