Making a connection when buying property – Rob Balanda

The variety of clauses that solicitors, agents and brokers are called upon to prepare for clients wishing to buy and sell properties and businesses is almost endless. 

The landscape of property investment too is changing so fast that even from one decade to another issues arise for investors and buyers of real estate that weren’t even on the horizon less than 10 years ago.

Here is a case on point and a clear example of the moving sands of the property world.

A keen client of our firm consulted us seeking advice about an issue involving the purchase of property that was fundamentally important to him.  He would not proceed with the purchase if this issue could not be dealt with to his satisfaction.

It was essential for his job that he have the fastest possible Internet connection.

For those of us who are into this issue you will understand that there is a massive difference in the speed of an Internet connection that many of us have through our phone line, and the high speed connections.

The standard phone line Internet connection transmits data like a voice call.  The fastest Internet connection still runs through your phone line but it actually runs data separate to your phone line.

The client’s requirement was for the highest speed connection.

The speed of this connection too varies throughout the country depending on how close your property is to an Exchange (most of these are owned by Telstra with a few owned by Optus).

The client therefore wanted to “try and then buy”.

He did not want to take his chances with the ultimate speed that he was delivered up when he connected following settlement of the purchase.  He wanted to apply for an internet connection now and test its speed before settlement.

The solution to these dilemmas nearly always lie with the parties themselves to the transaction.

If you have a willing Seller and a willing Buyer then any issue can be resolved.

And so, the Seller was comfortable therefore in allowing the Contract to be subject to obtaining an Internet connection for the property before settlement and the Buyer being completely satisfied with the speed of that connection.

The importance of the issue too was compounded by the fact that a substantial commitment was required to the Carrier for the connection in that a Contract had to be signed between the Carrier and the Customer for 2 years.  If this Contract was terminated in the first few months a substantial penalty of up to $2,000.00 was payable.[sam id=32 codes=’true’]

Sellers who find themselves in this situation too should be aware that it is of prime importance to them that this indulgence in allowing the Buyer to apply for an Internet connection does not interfere with their Internet connectivity.

Usually dial up connection is lost in these circumstances where the second connection is through the same phone line.

Therefore, it is important to the Seller that the Buyer’s connection be through a separate line so the Seller’s internet connection is not affected.

So here is the clause that the parties ultimately agreed to which was included in the Contract of Sale.

As I said, for those of us who have been involved in property investment for more than 10 years, who would have guessed that this would be a topical issue in 2010 in the property investment world:

Internet Connectivity

a. This Contract is conditional upon the Buyer obtaining, from a company of its choice, an internet connection to the property by settlement date on terms and at a cost satisfactory to the Buyer and without limitation the speed of such internet connection being to the Buyer’s satisfaction, failing which the Buyer may terminate this Contract of Sale, the matter will then be at an end and the deposit refunded to the Buyer.
b. The Seller consents to the Buyer’s application for such internet connection and will sign all papers and take all steps necessary to assist the Buyer in making such application provided that all costs of doing so will be met by the Buyer.
c. If requested by the Seller, the Buyer must ensure that its application for internet connection includes application for an additional telephone line so that the Buyer’s internet service operates through another telephone line separate to the one currently utilised by the Seller for its dial up internet connection.
d. The Buyer will pay for the costs of such installation including all equipment associated with the connection to the internet and the installation of any additional telephone line requested by the Seller.
e. The Seller consents to the application being made in the name of the Buyer prior to settlement.
f. The Buyer agrees that if for any reason settlement of the sale does not occur and the Seller desires to retain the benefit of the internet connection, the Buyer will take all reasonable steps to transfer the benefit of any such connection / service and new telephone line to the property to the Seller on the basis that the Seller pays for the ongoing cost of such line and service / connection.




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Rob Balanda


Rob is a partner in the Gold Coast based law firm MBA Lawyers. He is a highly regarded educator of property investors and estate agents and the author of the "Made Simple" series of books and CD's.

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