Nomination or Date Change: Check the Seller's Legal Fee

You want to nominate another buyer or change the settlement date, and a fee payable to the seller's legal practitioner (lawyer) or conveyancer appears in the paperwork. Before accepting the figure, check what event is said to trigger it, who must pay it and which document creates the obligation.

The short answer: Section 42(3) of the Property Law Act 1958 restricts a Victorian land sale contract from requiring the purchaser to pay the vendor's costs and expenses to the vendor or the vendor's legal practitioner or conveyancer, except in listed circumstances. Costs caused by purchaser default are treated differently from an ordinary request for a nomination or different settlement date. The actual clause, payer, recipient and sequence of events need to be checked before the charge is accepted or disputed.

Start with the event that supposedly triggers the fee

The label on the charge is not enough. A 'nomination fee', 'administration fee', 'legal fee' or 'rebooking fee' may describe the payment, but the legal question starts with the wording that says when it becomes payable.

The vendor is the seller. The purchaser is the buyer named in the contract. A nominee is the person or entity proposed to receive the transfer. Those roles matter because section 42(3) is framed around payment by the purchaser to the vendor or the vendor's legal practitioner or conveyancer.

Read the document to identify whether the claimed charge is tied to making a request, completing a nomination, agreeing to a replacement settlement date, failing to settle on the date that applies, or work said to have been required because a contractual obligation was not performed.

A request for a different settlement date is not, by itself, proof of purchaser default. Default means a failure to observe or perform a contractual term or condition. A variation is a change to the contract. The original contract, any agreed variation and the actual sequence of events need to be read together.

Section 42(3) has specific exceptions

Section 42(3) does not create a general right for a seller to pass transaction costs to a purchaser. It restricts a sale contract clause requiring the purchaser to pay the vendor, or the vendor's legal practitioner or conveyancer, costs and expenses outside the listed exceptions. Section 43 says section 42 applies only in favour of a purchaser for money or money's worth, meaning a purchase in exchange for money or something of value.

For an ordinary residential transaction, the exception most likely to need close attention is for costs and expenses incurred by the vendor because of purchaser default in observing or performing the contract. That exception does not establish a fee entitlement or amount by itself. The contract, the alleged default, the connection between that default and the claimed costs, and the costs themselves still need review.

Another exception concerns certain costs payable under conditions for general-law land, including conditions adopted under section 46 of the Property Law Act 1958 or conditions to like effect. General-law land is land outside the Transfer of Land Act registration system.

The remaining exception covers specified costs of perusal, execution and registration where the conveyance, transfer or other assurance concerns only part of the land that is the subject of the contract. Perusal means reading or reviewing the transfer document; execution means signing or formally completing it.

Those are specific statutory categories. They should not be treated as a general permission to charge for every nomination or agreed date change. Equally, the fact that a fee appears in a special condition does not by itself answer whether the statutory restriction or an exception applies.

Check whether the purchaser or nominee is the payer

The payer can change the analysis, so read the sale contract and any later nomination document separately. Section 42(3) expressly addresses payment by the purchaser. It should not be treated as a complete answer to every obligation imposed on a nominee or contained in a later document.

A deed is a formal legal document. If a nomination deed or other document says the nominee must pay a contribution, send the whole document to your conveyancer together with the original contract. Do not assume the contribution is valid just because the named payer is different. Do not assume the purchaser-cost restriction automatically decides every nominee obligation either.

Three points need to line up: who promises to pay, who receives the money and which document is relied on as the source of the obligation. A payment to the seller's representative is also different from a fee charged by your own conveyancer under your engagement with them.

Agreement on a new date does not automatically settle the fee issue

A settlement date is recorded in the contract and can be negotiated, but a request for a new date is not the same thing as an agreed variation. Once a new date is accepted, the written record should make clear what date replaces the original one.

The legal-fee contribution is a separate check. A message agreeing to the new settlement date may say nothing about a fee, or later correspondence may introduce one. If a later variation proposes a new contribution, that document needs to be reviewed alongside the original contract rather than assumed to resolve the issue.

Record the agreed replacement date, the fee position and any conditions attached to the change before it is implemented. A disagreement about the charge should not be treated as permission to miss the settlement obligation that actually applies. If default is alleged, provide your conveyancer with the relevant notice and correspondence promptly.

Compare each demand with the actual documents

Suppose a buyer asks to bring settlement forward and the seller agrees in writing to the new date. A later settlement statement includes a date-change fee, while separate nomination paperwork also requires a payment to the seller's representative.

Those are two claimed charges linked to different events and potentially different documents and payers. The example does not establish that either amount is payable. The contract, accepted date variation, nomination document and any explanation of the claimed costs need to be compared.

For each demand, identify:

the clause or later agreement being relied on;
the event said to trigger it;
the person required to pay and the recipient;
the amount claimed and whether it applies once or for each event; and
any invoice or explanation showing what work or cost the demand concerns.

That exercise separates a routine transaction charge from a claim for costs said to arise because an obligation was not performed. It also gives your conveyancer a specific documentary question to answer before figures are approved.

About the Pearson Chambers Conveyancing team

Pearson Chambers Conveyancing assists with Victorian residential purchases, sales and title transfers. Our residential conveyancing services include contract and Section 32 review and managing the documents and settlement steps for a purchase. We can review a nomination or date-change fee against the actual transaction paperwork.

Sources we consulted

Have the fee checked with the proposed change

Contact Pearson Chambers Conveyancing on 03 9969 2405 or email contact@pearsonchambers.com.au. Before signing, ask about our complimentary contract and Section 32 review. If you have already signed, send the contract, nomination or date-change documents, fee demand and approaching deadline so we can discuss the conveyancing steps.

General information only, current as at the date of publication. Victorian conveyancing rules and legislation change frequently. Please contact the Pearson Chambers Conveyancing team for advice on your specific contract.