Selling a property is an important financial decision, and in New South Wales, it comes with specific legal requirements that every vendor must follow.
While real estate agents handle marketing and negotiation, the legal side of the sale must be managed by a lawyer or licensed conveyancer. From preparing the Contract for Sale to ensuring the title transfers correctly on settlement, every step has legal consequences.
This article explains the key legal steps and seller obligations when selling property in NSW, and how engaging an experienced property lawyer helps ensure a smooth, compliant transaction.
Preparing the Contract for Sale
In NSW, a residential property cannot be advertised or offered for sale until a valid Contract for Sale of Land has been prepared. This requirement arises under the Property and Stock Agents Regulation 2022 (NSW), which prohibits agents from marketing a property without a draft contract, and the Conveyancing (Sale of Land) Regulation 2022 (NSW), which sets out the documents that must be attached
A valid contract must include all prescribed disclosure documents set out in Schedule 1 of the Regulation, such as:
A current title search and deposited plan;
A Section 10.7 Planning Certificate issued by the local council;
A drainage and sewerage diagram;
Copies of any easements, covenants, restrictions or dealings affecting title.
The contract must also include zoning details, prescribed warranties, and, where relevant, a statement about GST and tenancy arrangements.
Your lawyer’s role is to prepare or review the contract, ensure all documents are attached, and confirm that its terms are legally compliant. An incomplete or defective contract can delay exchange or give a buyer the right to rescind - potentially undoing a sale even after a price has been agreed.
Vendor Disclosure Obligations
NSW law requires sellers to disclose certain information about the property before the contract is signed. These disclosure rules are designed to protect buyers and create transparency in the sale process.
If required documents or information are missing or inaccurate, the buyer may have a right to rescind the contract under the Conveyancing (Sale of Land) Regulation 2022 (NSW).
Examples of disclosure issues include:
Omitting a planning or zoning certificate;
Failing to attach an easement or covenant recorded on title;
Not disclosing unapproved structures, such as decks, extensions or pools;
Inaccurate details about boundaries, services or access.
A good property lawyer will identify and rectify any potential disclosure defects before the property is listed for sale, ensuring your contract is compliant and your risk is minimised.
Pre-Sale Considerations
Before the property goes to market, it’s wise to address any issues that could later cause delays or negotiation disputes. These may include:
Checking for outdated or unregistered dealings on the title.
Ensuring that all building works have council approval and comply with regulations.
Verifying smoke alarm and swimming pool compliance certificates where applicable.
Considering tax implications, including capital gains tax or GST on commercial property, and seeking accounting advice if needed.
Deciding whether the property will be sold with vacant possession or subject to an existing lease.
Addressing these matters early can make your property more attractive to buyers and reduce the chance of contract disputes later.
The Exchange Process
Once the buyer is satisfied with the terms of the contract, the parties proceed to exchange of contracts.
Exchange is when both buyer and seller sign identical copies of the Contract for Sale and the contracts are dated and swapped. It can occur through your solicitor, the agent, or electronically through PEXA.
From that moment:
The contract becomes legally binding.
The buyer pays a deposit (usually 10%, sometimes less by agreement).
A five-business-day cooling-off period applies unless the buyer waives it by providing a Section 66W Certificate signed by their solicitor.
The deposit is held in trust by the agent or seller’s lawyer until completion. During the cooling-off period, the buyer may withdraw — but will forfeit 0.25% of the purchase price.
A solicitor ensures that exchange occurs correctly, all signatures are valid, and the contract reflects any negotiated amendments. Mistakes here can invalidate the agreement or trigger disputes about timing or deposit entitlement.
Between Exchange and Settlement
After exchange, there’s typically a six week period before settlement. During this time, the seller’s conveyancing lawyer manages the legal and administrative steps to finalise the sale.
Their role includes:
Liaising with your lender to arrange discharge of any existing mortgage.
Preparing and verifying settlement figures and adjustments, including rates, water, and strata levies.
Uploading and coordinating settlement through PEXA, ensuring funds are transferred and the title is correctly registered in the buyer’s name.
Ensuring all conditions of the contract are met and any required certificates or releases are obtained.
Under section 66K of the Conveyancing Act 1919 (NSW), the property remains at the seller’s risk until completion. This means you should maintain your insurance policy until settlement is confirmed and the transfer is registered.
If settlement is delayed — for example, due to the buyer’s finance or bank issues — your lawyer will manage notices, extensions, or potential default procedures.
Common Issues for Sellers
Even well-prepared sales can encounter problems. Common issues include:
Missing or incorrect disclosure documents delaying exchange.
Unapproved structures or compliance issues discovered by the buyer’s inspections.
Failure to discharge mortgage in time for settlement.
Disagreements about inclusions, exclusions or chattels.
Buyer’s failure to complete on time or withdrawal during cooling-off.
A property lawyer anticipates these risks early and manages them efficiently — protecting you from financial loss, contractual penalties, or failed settlements.
Why Use a Property Lawyer
Selling a property involves more than filling out forms or signing paperwork. Every decision — from contract preparation to settlement — carries legal consequences.
While licensed conveyancers can handle straightforward sales, only a solicitor can:
Provide detailed legal advice about disclosure obligations and remedies.
Negotiate or vary complex contract terms.
Advise on tax, trust or estate implications affecting ownership.
Represent you if a dispute arises before or after settlement.
A property lawyer ensures your contract is watertight, your disclosure obligations are met, and your sale settles on time. They provide the peace of mind that comes with knowing your transaction is managed by a legal professional with full accountability.
Conclusion
Selling a property in NSW requires careful legal preparation and compliance with strict disclosure rules. A well-drafted contract and experienced lawyer are the keys to a smooth sale and a legally sound outcome.
Speak to a specialist property lawyer
Our property team includes multiple Accredited Specialists in Property Law who act for sellers across Sydney and NSW. If you’re preparing to sell your home or investment property, give us a call or submit an enquiry now to speak with one of our conveyancing lawyers.
