Commonly included in property sale and purchase agreements, a solicitor’s approval clause usually means that the agreement depends on your lawyer being satisfied with the contract terms. Here’s what you need to know about solicitor’s approval clauses.
When would I see a solicitor’s approval clause?
A solicitor’s approval clause is commonly included in property sale and purchase agreements. While the exact wording may vary, it usually means the agreement depends on your lawyer being satisfied with the title, form and content.
When can the solicitor’s approval clause be used?
It’s important to note that the solicitor’s approval clause can’t be used to back out of the agreement, just because you’ve changed your mind. The courts have said it can only be used to cancel if there is a genuine legal issue with the conveyancing aspects of the property purchase.
What are ‘conveyancing aspects’?
‘Conveyancing aspects’ can include legal problems. For example, you could cancel the contract using the solicitor’s approval clause if the seller doesn’t legally own the property or isn’t allowed to sell it. There must be a problem that can prevent the transfer of the property or another technical issue with the title, such as the nature and extent of an easement.
Due diligence clause vs solicitor’s approval clause
If you’re thinking about buying a property and are unsure about any part of the agreement or what a particular clause means, it’s safer to include a well-drafted due diligence clause rather than relying on a solicitor’s approval clause.
A due diligence clause is more of a “cover all” clause which means if you find anything wrong with the property outside of just the legal problems, you can cancel the agreement. We recommend that you send the draft sale and purchase agreement to your property lawyer (i.e. us) for review before you sign anything.
Seek legal advice early
When buying or selling your property, we recommend you consult your solicitor (us) about the necessary clauses to include in the agreement, before signing anything.
If you do not get legal advice before signing, and include a solicitors approval clause instead, be aware that this clause cannot be used simply to cancel the agreement because you’ve changed your mind or your circumstances have changed.
Send the draft agreement to your solicitor for review before signing anything. We can provide you with advice on a much wider range of issues and help you to avoid any problems further down the track if something does go wrong.
