Mortgagee sales generally have different terms and conditions to non-mortgagee sales, which you should clearly explain to potential buyers. Often in mortgagee sales:
- the property is not accessible for viewing beforehand and is often sold based on kerbside viewing
- the property is not offered for sale with vacant possession
- the chattels are not included in the sale and the property is sold in an ‘as is’ condition
- there are no warranties to the new owners on the condition of the property and the mortgagee is not liable for any damage made to the property
- the property may not be insured by the mortgagee after signing the sale and purchase agreement
- the mortgagee is not required to supply property inspection reports or disclose unapproved construction work, provide information about building consents or code compliance certificates or provide clarity around boundaries relating to the property.
Sometimes, successful buyers may also be liable for any outstanding rates, body corporate fees or other payments. You should refer to the sale and purchase agreement for sale conditions to find out whether there are any outstanding payments and encourage potential buyers to do their research on the property, including seeking legal advice.
Full details of sale conditions are usually found in the sale and purchase agreement and associated documentation, for example, auction particulars and conditions of sale or tender documents. Licensees should ensure they are familiar with the terms and conditions of the sale.
These terms and conditions are often outside of the buyer’s control. We recommend you clearly explain them to potential buyers and encourage them to speak to a lawyer before bidding at auction or signing a sale and purchase agreement. It’s a good idea to also put this in writing once you have done this.
Read guidance for buyers about mortgagee sales(external link)