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ARTICLE · 22 OCTOBER 2015

What is a terms contract?

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A "terms contract" is if you let purchasers move into the property before they have paid the whole of the purchase price.

AustraliaReal Estate and Construction
Murray Thornhill
Murray Thornhill
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If you agree to sell your property to someone and then let them move into the property before they have paid the whole of the purchase price, you have what is known as a "terms contract".

Special rules apply to terms contracts under the Sale of Land Act 1970 which make these contracts particularly risky.

These are some of the risks you should be aware of if you are thinking of allowing a purchaser to move into your property before being paid the purchase price in full:

  1. If the purchaser is paying off the purchase price by instalments and then defaults, they may end up getting to stay in the property for at least 28 days rent-free which is the minimum period of notice you have to give before you can evict them.

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