NEW YEAR – NEW REIQ CONTRACTS!
On 20 January 2022 the Real Estate Institute of Queensland (REIQ) in conjunction with the Queensland Law Society released new standard form Contracts which include a number of significant changes. So what’s new?!
Extension of Settlement Date
One of the biggest changes to the Contract is the inclusion of new Clause 6.2. This clause gives either party the right to extend Settlement by up to 5 business days by issuing an Extension Notice by 4:00pm on the due date for Settlement.
This change brings Queensland Contracts into line with other states and acknowledges that delays are often caused by lenders and not the parties themselves. The clause can only be used to extend the Settlement Date, and written notice is required and must comply with the Contract.
More than one extension notice can be given but the total time nominated cannot exceed 5 business days.
Seller Disclosure and Warranties
The Seller warranties in Clause 7.4 have been amended and some significant changes have occurred.
The Buyer will now have a right to terminate if a show cause or enforcement issue remains unsatisfied at the Contract Date.
A new warranty has been included in clause 7.4.2 – the Seller warrants that they have not received any communication from the local government or other competent authority about work to be done on the property as at the Contract Date.
The Seller disclosure obligations are also expanded by the inclusion of new clause 7.5 and 7.6.
Clause 7.5 creates a contractual right of termination for Buyers if infrastructure unrelated to delivery of services (gas, electricity, water, sewerage) to the Land pass through the Land and are not protected by a registered easement BMS or statutory authority and not disclosed to the Buyer.
Clause 7.6 changes the responsibility for notices to do work. A seller is required to comply with notices to do work issued prior to the Contract unless the notice is disclosed to the Buyer in the Contract or in writing prior to signing. If the Seller does not comply with the notice before Settlement the Buyer may be entitled to claim the costs of complying with the notice from the Seller as a debt after Settlement.
A Buyer is required to comply with notices to do work issued after the Contract Date unless the notice requires compliance before Settlement however the Seller may be entitled to claim the costs of complying with the notice from the Buyer as an adjustment at Settlement.
Breaches to the Seller disclosure and warranties may lead to a right to termination rights so it is essential you seek advice before signing a Contract whether you are buying or selling!
Other changes in the new Contracts include:
- Smoke Alarms – Clause 7.8 – the Seller must install smoke alarms in accordance with the Smoke Alarm Requirements Provision requiring interconnected alarms in all bedrooms wired in or long life battery by the Settlement Date. Failure to comply may result in the Buyer being entitled to an adjustment equal to 0.15% of the purchase price.
- Deposit by direct deposit – changes to Clause 2 – the contract contains new provisions to allow the deposit to be paid by direct deposit and provides guidance on how to manage delays caused by bank transfers and the circumstances in which a Buyer will be in default under the Contract.
- Pool Compliance – changes to Clause 1 and new clause 5.3 – the Seller is now required to provide a Pool Compliance Certificate on Settlement unless the Buyer was provided the Buyer with a notice of No Pool Safety Certificate before the Contract is signed.
Our dedicated property team is up to date on the new Contract requirements obligations! If you are considering buying or selling please call us for an estimate to get expert advice, ensure the correct version of the contract and the process is handled professionally.
Our team of dedicated Solicitors are here to help you through every stage of your transaction.
Did you know: when you buy or sell a property it can affect your estate planning needs? At the same time as your conveyancing transaction we recommend and can assist you with preparing or updating your Will and if necessary, preparing an Enduring Power of Attorney to protect your rights now and into the future.
McLaughlins Lawyers have been helping people buy and sell properties in Queensland for over 60 years. We understand how the Queensland property system works. Call or email Pip Davis and Teresa Kearney on (07) 5591 5099 and [email protected] for help.
McLaughlins Lawyers are your experienced and trusted Gold Coast lawyers.
Author: Pip Davis
Directors: Ian Kennedy and Sophie Pearson
Date: 2 February 2022