Simple Finance Clause

The Buyers need to obtain approval for a loan of at least $ _ _ _ _ _ _ _ _ _ by ___/___/___. If by 5.00pm on that date the Buyers do not have an unconditional written finance approval then the Buyers may give notice to the Sellers cancelling this Contract.

(NOTES: Some non-standard contracts don’t have finance conditions. The draft clause here is very short, and very simple.  It is not very strict on Buyers - for example, it doesn't demand that the Buyer product evidence of reasonable efforts to obtain finance prior to cancelling the contract.)

Seller Finance with second mortgage

The Sellers to loan the sum of $_ _ _ _ _ _ _ _ _ _ _ _  to the Buyers at settlement, at an annual interest rate of _ _ _ _ _ _ _ _ _ % (percent), to be secured by a second registered mortgage in favour of the Sellers. The Sellers will prepare all documents reasonably necessary for the loan and the second mortgage, on commercial terms and using the usual forms. The Sellers will prepare these documents as soon as practicable and deliver them to the Buyers, who will execute them and deliver them to the Sellers at least 1 working day prior to Settlement. The Buyers shall be responsible for paying stamp duty, registration fees, legal fees and other outlays on the loan and second mortgage. The Sellers may withdraw these costs, outlays and fees from the loan proceeds at Settlement.

(NOTES: A “perfect” vendor finance clause would have attached to the contract the actual loan agreement and actual mortgage.  Anything less than this is a compromise, and increases the risk to settlement - and may even make the contract uncertain.  The clause here is compromised because of this ... and if the opportunity allows a solicitor should draw the loan agreement and mortgage and these should be attached to the contract).

Instalment contract

(a) The deposit is the sum of $_ _ _ _ _ _ _ _ _ _ _ _  and is payable as follows:

(i) $_ _ _ _ _ _ _ _ _ _ _ _  to the Stakeholder, immediately on execution of this Contract, to be released to the Sellers immediately same is paid, and

(ii) by 26 weekly instalments of $_ _ _ _ _ _ _ _ _ _ _ _ .

(b) Each of the 26 weekly instalments are to be paid by 5.00pm on Monday of each week directly to the Sellers, or as the Sellers otherwise direct in writing.

(c) The Buyers agree that all part payments of the deposit are immediately released to the Sellers and will belong to the Sellers absolutely, and under no circumstances whatsoever will those monies be repayable to the Buyers, the Stakeholder, or any other person.

(d) From the Contract Date the Buyers may occupy the Property, but not to the exclusion of the Sellers.

(e) The provisions of the ‘REIQ Terms of Contract’ relating to insurance, maintenance, default etc, shall apply to the occupation by the Buyers and in addition, the Buyers will:

(i) carry out all maintenance reasonably required for the upkeep of the Property, whether that maintenance be of a structural XE "structural"  nature, or any other nature whatsoever; and

(ii) mow or cause the lawns to be mown at least once each week.

(f) The Buyers indemnify the Sellers against any claims made arising out of the occupation by the Buyers of the Property.

(g) Should this Contract not proceed to Settlement for any reason whatsoever the Sellers will not be required to pay to the Buyers any monies as compensation or otherwise for any improvements to the Property made by the Buyers.

(h) The Buyers will not create a nuisance to adjoining occupiers or neighbours.

(i) If prior to Settlement the Buyers leave the Property or otherwise end the Buyers' occupancy of the Property, the Buyers agree that the Buyers will pay to the Sellers on demand the reasonable costs of fixing the Property to restore it to the same condition it was at the Contract Date.

The ‘REIQ Terms of Contract’ are varied accordingly.

(NOTES: Instalment contracts are always very dangerous.  It is unlikely that this clause will satisfy a request for an instalment contract.  A specific clause will most likely be needed, to tailer to the situation.  This clause is included by way of example, only.  It would be very dangerous to use this clause or to attempt to create an instalment contract between Buyers and Sellers ... without both sides first receiving thorough legal advice.)