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January 2022 contract changes to purchase property in Queensland
There have been lots of headlines popping up in recent months outlining major failings in Queensland residential contracts. In several instances, young first home buyers have ended up losing their entire house deposit due to bank delays preventing them from meeting their settlement deadline. As a result, the sellers not only terminated the contracts, but also kept the buyers’ deposits.
While this may sound illegal, Queensland sellers were (until recently) within their rights to do this. Although most other Australian states grant a two-week grace period if your settlement goes under, this was not the case in Queensland.
Changes to standard contract terms
Thankfully due to the blistering speed in which the Queensland property industry is now moving, as well as the public backlash against these recent failings, the Queensland Law Society (QLS) together with the Real Estate Institute of Queensland’s (REIQ) has introduced changes to their residential contracts. These changes will bring Queensland more in line with New South Wales and Victoria and will alleviate circumstances where buyers are unfairly affected by delays outside of their control.
Extensions to settlement dates
Both seller and buyers can now obtain a short extension to a settlement if they are unable to settle due to the inaction or delay of a financier (such as a bank) or for any other reason. This extension must be no more than five (5) business days from the originally scheduled settlement date. The relevant party must give notice to the other party before 4pm on the scheduled settlement date and nominate a new settlement date.
Other significant changes to residential contracts
- Sellers are now contractually obligated to install smoke alarms in compliance with the new smoke alarm laws by the settlement date.
- Buyers can provide payment of the deposit via direct debit and are afforded a grace period to address payment when paying electronically.
- Sellers must give a warranty that they have not received a communication from an authority that may lead to the issue of a show cause or enforcement notice, or a notice to do work.
- The responsibility for notices to do work is now dependant on: when the notice is issued (either prior to, or after the contract is entered into), when compliance with the notice is required (either before, or after settlement) and whether the notice is disclosed by the seller to the buyer prior to the contract being entered into.
Looking to purchase property in Queensland?
To learn more about the recent changes to REIQ residential contracts and how this will affect you, get in touch with Avis & Funk Law today. With a range of comprehensive property and conveyancing services, our skilled lawyers can offer tailored, transparent guidance to assist you with your property purchase.
