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Many first home buyers include a solicitor’s approval condition in their contracts, believing it offers protection and flexibility. Real estate agents love to push this as a solution so the buyer can sign the agreement over the weekend.
Unfortunately, this condition is very problematic. Often a solicitor can only refuse the contract on narrow, legal grounds—leaving buyers exposed to non-legal risks that can trap them in unfavourable deals. How do you avoid getting stuck in a contract due to a misunderstood solicitor's approval condition?
Solicitor’s approval conditions focus strictly on legal issues like title defects or conveyancing problems (the ability to transfer title to the next person).
Buyers often assume that these conditions allow them to walk away from the contract for a broader range of reasons, such as a change in financial circumstances or finding a better deal. Unfortunately, this is not the case.
Consequence:
If you’re relying on a solicitor’s approval to exit a contract, you could find yourself locked into a deal despite non-legal concerns.
Solicitors are legally bound to only refuse approval based on actual conveyancing issues. Trying to manipulate this condition for non-conveyancing reasons can backfire.
Consequence:
This could result in penalties or the seller suing the purchaser for specific performance i.e. forcing the Court to require them to complete the purchase.
Buyers are often pressured by real estate agents to include a solicitor’s approval condition in the sale agreement.
In essence, this clause can be a trap! Buyers often realise, only after signing, that they should have sought legal advice beforehand. While a solicitor’s approval allows your solicitor to intervene, their ability to protect you is limited – it's like having them fight for you, but with their hands tied behind their back.
We appreciate buying property often requires urgent attention and it is difficult (impossible) to get a hold of a solicitor over the weekend. This means we need to find a way to make sure the buyer can get the property under contract while also protecting them in full.
A more effective way to protect yourself is by including a due diligence condition in the contract, which offers much broader protection. This condition allows the buyer to back out of the deal for any reason, including title issues, financing concerns, or even personal preference.
The due diligence clause gives the buyer complete flexibility and is entirely at their discretion. If the buyer decides the deal isn’t satisfactory for any reason, they can walk away—without needing to justify their decision or face potential legal disputes.
Here’s what a strong due diligence clause looks like:
“This offer is conditional upon the Purchaser completing within ten (10) Working days from the date of this Agreement a due diligence investigation of the Property on the terms and conditions satisfactory to the Purchaser in all respects, including without limitation title, compliance with the local council, and other authority requirements, the raising of finance, and any other matter which the Purchaser in their sole discretion may decide to investigate.
The Vendor undertakes and agrees to allow the Purchaser and its consultants full access to the Property for the purposes of the due diligence investigation and to provide the Purchaser with any information held relating to the Property relevant to the due diligence investigation.
This clause is inserted for the sole benefit of the Purchaser, and the Purchaser may waive it by giving written notice to the Vendor. Satisfaction of this clause will be at the sole discretion of the Purchaser, and if this clause is not satisfied, the Purchaser will not be obliged to disclose any reason for non-satisfaction, and any deposit paid must immediately be refunded in full.”
