September 2025 update to the Real Estate Institute of Victoria (REIV) / Law Institute of Victoria (LIV) Contract of Sale of Land

The REIV/LIV Contract of Sale of Land (‘LIV Contract’) has been updated, effective from September 2025. The 2025 edition of the LIV Contract (‘Updated LIV Contract’), contains amended general conditions, contract execution clauses, and amendments to the particulars of sale. Solicitors acting in property transactions should familiarise themselves with these changes.

Discussed below are details of some of the key changes to the Updated LIV Contract, when compared to the previous January 2024 edition of the LIV Contract (‘Old LIV Contract’) and some helpful suggestions to manage these changes.

The Updated LIV Contract now contains multiple and separate contract execution clauses that are formatted differently to facilitate multiple signatories.

Recommendations

Solicitors should always check that the contract of sale of land has been correctly signed by all parties, particularly where a party is a corporate entity or a person is signing as an attorney on behalf of a party.

Where the land being sold is ‘off the plan’, the settlement date has been extended from 14 days in the Old LIV Contract, to 21 days after the vendor gives notice in writing to the purchaser of registration of the plan of subdivision.

In the Updated LIV Contract, a vendor can require all directors to sign a guarantee, where the purchaser is a proprietary limited company.

General condition 12 of the Updated LIV Contract is now titled ‘Domestic Building Insurance’. The amended general condition 12 confirms that this general condition only applies to domestic building insurance provided by a registered builder under a major domestic building contract. In addition, it reduces the notice period from 21 days to 14 days before settlement.

General conditions in the Old LIV Contract dealing with an early release of the deposit under section 27 of the Sale of Land Act 1962 (Vic) (‘Sale of Land Act’), have been removed from the Updated LIV Contract. The Updated LIV Contract does not contain any contract provisions dealing with the release of a deposit under section 27 of the Sale of Land Act.

Recommendations

In light of the GLP Batesford Holdings Pty Ltd v 68 Bridge Road Land Pty Ltd [2022] VSC 614 and 68 Bridge Road Land Pty Ltd v GLP Batesford Holdings Pty Ltd [2023] VSCA 325 cases, it is recommended that solicitors do not include any special conditions dealing with the early release of the deposit in a contract of sale of land. For more information on this issue, solicitors should refer to LPLC’s article - Early release of a deposit is a statutory not contractual right.

Under new general condition 17.3, the Updated LIV Contract widens the range of settlement times to reflect the broader settlement times permitted by the electronic lodgement network operator (for example PEXA), but general condition 17.2 retains the 10.00am to 4.00pm settlement times for paper transactions.

General condition 21.2(a) in the Updated LIV Contract has amended the defined person who can provide a building report from a ‘building practitioner’ or an architect to:

• a ‘registered building surveyor’,
• a ‘registered building inspector’,
• a ‘registered domestic builder’ or
• an architect.

In addition, the defined person preparing the building report must do so in accordance with Australian Standard AS 4349.1-2007 (‘Australian Building Report Standard’) and only a ‘major defect’ will give the purchaser a right to terminate.

Recommendations

If the Updated LIV Contract is used, and the sale is subject to a building report, solicitors should advise their client (and confirm in writing):

• which defined persons can provide the building report,
• that the building report must be prepared in accordance with the Australian Building Report Standard,
• What kind of defect may permit a purchaser to terminate the contract of sale in accordance with general condition 21, and
• that the purchaser must strictly comply with all of the requirements under general condition 21.

Strict compliance with general condition 21 of the Updated LIV Contract is important, as a failure to comply may impact the purchaser’s termination rights, even if a current major defect is identified in a structure on the land.

General condition 22.2(a) under the Updated LIV Contract no longer defines the class of persons that must provide the pest report, but does require the report from the pest inspector, to be ‘prepared in accordance with the relevant Australian Standard approved on behalf of the Council of Standards Australia’.

Recommendations

If the Updated LIV Contract is used and the sale is subject to a pest report, solicitors should advise their client (and confirm in writing):

• that the pest report produced by the pest inspector must be ‘prepared in accordance with the relevant Australian Standard approved on behalf of the Council of Standards Australia’,
• what kind of infestation may permit a purchaser to terminate the contract of sale of land in accordance with general condition 22, and
• that the purchaser must strictly comply with all of the requirements under general condition 22.

Strict compliance with general condition 22 of the Updated LIV Contract is important, as a failure to comply may impact the purchaser’s termination rights, even if a current major infestation affects the structure of a building on the land.

General conditions dealing with the specific apportionment and treatment of the vendor’s land tax as part of the adjustments at settlement, have been removed from the Updated LIV Contract.

In addition, a new general condition 23.4 has been inserted to ensure contractual compliance with section 10G of the Sale of Land Act that prohibits the vendor recovering any amounts for land tax or commercial and industrial property tax (CIPT) from the purchaser, where the ‘sale price’ is less than the ‘threshold amount’ (as defined under section 10I of the Sale of Land Act).

Recommendations

Solicitors should note:

• As at 1 January 2025, the ‘threshold amount’ is $10,400,000 (subject to CPI adjustment in accordance with section 10I of the Sale of Land Act), and
• The ‘sale price’ is inclusive of GST, and section 10G(3) of the Sale of Land Act, states the:

‘sale price, in relation to a contract, means the price of the land that is specified in the contract, however expressed and including any amount of GST payable on the supply constituted by the sale of the land, less any discount or rebate that is specified in the contract, whether or not the discount or rebate is contingent’.

Where the ‘sale price’ is equal to or more than the ‘threshold amount’, special conditions may be required to deal with the adjustment of land tax and CIPT at settlement.

For further information on the ‘threshold amount’ please refer to the link below:

Conveyancing and contracts for sellers - Consumer Affairs Victoria

A new general condition 28.4 has been inserted to ensure the contractual basis for dealing with notices between the day of sale and settlement (which could include vendor land tax liabilities or windfall gains tax (WGT) liabilities) complies with sections 10G and 10H, respectively, of the Sale of Land Act.

Recommendations

If a WGT liability exists before the contract of sale of land is signed, solicitors should advise their vendor client (and confirm in writing) that the vendor cannot recover the WGT liability from the purchaser. Alternatively, if a WGT assessment is likely to issue after the contract date, solicitors should consider whether a special condition dealing with any future WGT liability, should form part of the contract of sale of land.

The Old LIV Contract contained a contractual mechanism to withhold up to $5,000 of the sale price, to deal with minor damage to the property that occurred between the day of sale and settlement. This withholding mechanism has now been removed from the Updated LIV Contract.

General condition 33 has been amended to remove the further 2 percentage points of interest in addition to the going rate of penalty interest under the Penalty Interest Rates Act 1983 (Vic).

In the Updated LIV Contract, general condition 35.4 has been amended so that the vendor’s post contract termination rights also apply where the vendor accepts the purchaser’s repudiation of the contract of sale of land.

Recommendations

Solicitors should be aware of the fundamental differences between rescission and repudiation of a contract of sale of land. For further information, solicitors can refer to textbook commentary by David P Lloyd and William F Rimmer, Victorian Land Contracts (published by Thomson Reuters).

Solicitors should:

• thoroughly review the Updated LIV Contract and note the changes,
• review their precedent documents, and ensure that advice letters and special conditions are appropriate and accord with the version of the LIV Contract that is being used, and
• adjust their advice to clients, depending on which version of the LIV Contract is being used.