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Beware of solicitor approval clauses
July 10, 2024

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Property
Beware of solicitor approval clauses
There are risks in relying on solicitor approval clauses, it is essential to get legal advice early.

A “solicitor’s approval” clause has become common place in property contracts, but the actual nature of the clause is not widely understood. It’s not an “escape” clause.

An approval clause typically has restrictions on what aspects of the contract can be reviewed. It does not give lawyers broad powers to change any terms that aren’t appropriate for the client’s situation unless the wording of the clause specifically allows for this.

A lawyer may not be able to withhold approval even if there is a concern the contract isn’t appropriate for the client. For example, if the contract is missing important conditions for a first home buyer or it doesn’t transfer EQC claims, changes to make this more suitable aren’t guaranteed. The risk to buyers and sellers is they are bound by the terms (and the penalties) of the contract they have signed, potentially without an option to validly cancel. Changes would have to be negotiated but there’s no guarantee other parties will agree to changes. This could be a very expensive and stressful mistake.

A contract is binding once it is fully signed. The safest way to protect yourself is to send any contract to your lawyer to review before you sign it. Our team is experienced with residential and commercial conveyancing and can advise on all manner of contracts, ensuring what you are signing is suitable and specific to you, and that you are fully aware of your contractual obligations before it is too late.

Author

Astrid Harrison