What is the Joint Form of General Conditions?

If you’re buying or selling a property in Perth, or indeed anywhere in WA, you’ve probably focused most of your attention on the Offer and Acceptance (O&A) contract. That’s understandable - it sets out the specific price, settlement date, and conditions related to your transaction. But behind the O&A there’s another document quietly doing most of the heavy lifting. It’s called the Joint Form of General Conditions (JFGC).

Whether you’re buying in Joondalup, selling in Hillarys, or upsizing locally around Kallaroo, understanding the JFGC is essential. It sets out the detailed terms that apply to your contract.

So what is the Joint Form of General Conditions in WA? And why does it matter so much? Let me break it down for you in plain English.

What is the Joint Form of General Conditions?

The Joint Form of General Conditions (JFGC) is a standard set of contractual terms used in most property transactions in Western Australia. It was developed by REIWA, and there are various iterations, with the most current being the 2022 version.

It works alongside your Offer and Acceptance. While the O&A sets out the deal-specific details, the JFGC lays out the nitty-gritty details, including what happens:

• If the deposit isn’t paid

• If settlement is delayed

• If the property is damaged

• If one party defaults

• How and when final inspections occur

• When possession is given

In short: it’s the rulebook. But no, you don’t need to read it word-for-word when you sign the contract. Let’s look at some of the more commonly important sections and what they mean…

Section 1. Deposit

When you sign an O&A to buy a property in WA, usually, as part of this, you’ll agree to pay a deposit (by a specified date). Under the JFGC, if the buyer fails to pay the deposit on time, the seller can issue a written notice requiring payment within a specified period. If the buyer still does not pay, the seller may be entitled to terminate the contract.

(JFGC reference: Clause 1)

Section 3. Settlement

Settlement is the day ownership legally changes hands, and the buyer pays the seller the balance of the purchase price. The JFGC sets out what must occur before settlement can proceed, including document exchange, where and when settlement is to take place (if not mentioned in the contract).

One key requirement that falls under this section relates to the ATO Clearance Certificate. Under the JFGC:

• The seller must provide a valid ATO Clearance Certificate at least 2 business days before settlement.

• If not provided, the buyer is legally required to withhold 15% of the purchase price and remit it to the ATO.

This applies to all sale prices (previously, it was only for properties valued at over $750,000). Failure to provide the certificate on time can cost sellers a lot of money! For buyers, this is something your settlement agent monitors closely.

Section 3 also allows for electronic conveyancing. In WA, most settlements are completed electronically, so the JFGC lays down the ground rules as to how that works and what happens if the settlement can no longer be completed electronically.

(JFGC reference: Clause 3.7, 3.12)

Section 4. Delay in Settlement

Settlement doesn’t always occur smoothly. Banks can run late, documents can be delayed, and unexpected issues arise. Section 4 of the Joint Form sets out what happens in the event of a delay. It is also where the concept of the ‘three day grace period’ comes from. Specifically, it:

• Creates a three business day grace period in which either party can settle without penalty after the scheduled settlement date.

• Specifies how interest is calculated and accrues if either party is unable to settle on the due date

• States the Prescribed Rate for penalty interest of 9% per annum, calculated daily.

Importantly: A ‘Ready, Willing and Able’ Notice can only be issued once a party becomes ready to settle. This can done before the scheduled settlement date. After the due date, failure to settle may constitute default.

(JFGC reference: Clause 4)

Section 5. Inspection

Buyers are often entitled to conduct a final inspection. The Joint Form documents things like the timeframe for the inspection (within the five business days before settlement), what happens if issues are found at the inspection (right to reinspect) and that the buyer is entitled to be accompanied by two people.

If the parties cannot agree on a suitable time for inspection, the JFGC provides that the buyer may nominate a time within the parameters specified.

(JFGC reference: Clause 5)

Section 6. Possession and Rent

One of the most misunderstood parts of the JFGC relates to possession. If the seller lives in the property, they are legally entitled to remain in occupation until 12pm the day after settlement. This is known as “limited occupation”, and this right is created under the JFGC

This is still considered vacant possession under WA practice.

As for keys, the seller must provide the “access device” to the property. If the contract does not specifically list multiple keys, the obligation may only extend to providing whatever access device they have.

If the property is sold subject to a tenancy, the JFGC sets out the requirement for the seller to provide information such as a copy of the lease, rent statement, Property Condition Report, bond lodgement confirmation and other such documents to the buyer on settlement.

(JFGC reference: Clause 6.3, 6.5, 6.10)

Section 8. Risk

What happens if a storm damages the roof between contract signing and settlement? Under the JFGC:

The property remains at the seller’s risk until settlement, or when the buyer takes possession.

If the property is destroyed or partially damaged before settlement, and is made substantially uninhabitable, either party may have the right to terminate, subject to the provisions within the Joint Form.

This is why sellers must maintain insurance up until settlement, and buyers should consider arranging insurance from the settlement date.

(Clause reference: Clause 8)

Section 9. Seller Representation & Warranty

The JFGC includes a whole variety of warranties from the seller that:

• They have the right to sell the property

• They do not know of any demands, orders or requisitions relating to the property

• The property is not subject to any road widening proposals

• The structures on the property do not encroach on neighbouring property

• The property is not subject to undisclosed encumbrances

• The property will be in the sale state and condition as it was at the time the contract was entered into

These warranties protect buyers from hidden legal issues.

(JFGC reference: Clause 9)

Section 11. Electricity / Underground Power

In some areas of Perth, underground power installation can be required after contract signing. The JFGC provides that if underground power is required and the payment for such has already been determined by the local authority, the seller is generally responsible for payment, unless the contract states otherwise.

This is particularly relevant in older suburbs undergoing infrastructure upgrades.

(JFGC reference: Clause 11.6)

Section 24. Default

If either party defaults (doesn’t comply with the terms of the contract, like settling on the due date) under the JFGC, the innocent party may have rights including:

• Termination of the contract

• Claiming damages

• Forfeiture of the deposit (if buyer defaults)

• Seeking specific performance

Further, if the buyer defaults, and the seller resells the property within 12 months for less than the original purchase price, the buyer may be liable to pay the seller the difference.

(JFGC reference: Clause 24)

FAQ: Joint Form of General Conditions WA

What is the Joint Form of General Conditions in WA?

It is the standard contract terms that govern most residential property sales in Western Australia.

Is the JFGC legally binding?

Yes. Once your Offer and Acceptance is signed, the JFGC becomes part of your contract.

What happens if settlement is delayed?

There is a three business day grace period, with penalty interest at 9% p.a. calculated daily.

What if the seller doesn’t provide an ATO Clearance Certificate?

The buyer must withhold 15% of the purchase price and remit it to the ATO.

Can I move in on settlement day?

Only if the property is vacant. If the seller lives there, they may remain until 12pm the day after settlement.

Understanding the Joint Form

The Joint Form of General Conditions isn’t just fine print gobbledygook. Instead, it’s the legal backbone of your property transaction. While you’re not expected to read it cover to cover, it’s an incredibly useful reference document for things like understanding how the deposit works, what happens if settlement is delayed, who bears risk, and what default means.

As your conveyancer, it’s my job to know the JFGC back to front, so if you’re buying or selling in Perth and want to understand how the JFGC applies to your contract, I’m happy to share advice with you before you sign (and of course, after as well).

North Shore Conveyancing supports buyers and sellers across Perth with clear contract reviews and practical guidance from negotiation through to settlement. If you’d like your contract reviewed before you commit, contact Katelyn for straightforward advice and peace of mind.